News and Views

The Exchange TRX: A New Era of Retail in Klang Valley

June 1, 2024

The opening of The Exchange TRX in Klang Valley on November 29, 2023, has generated considerable excitement, achieving an impressive 100 percent occupancy rate from day one. With a vast net lettable area of 1.3 million square feet and housing 400 retail outlets, the mall's design emphasises placemaking and provides immersive entertainment, cultural, and leisure experiences.

Despite this exciting development, The Exchange TRX introduces heightened competition within Klang Valley's retail landscape. Concerns are emerging about the potential cannibalisation of mall visitorship from established malls such as Pavilion Kuala Lumpur and Berjaya Times Square.

To assess the potential impact, we will conduct a detailed analysis on these malls as case studies, exploring how The Exchange TRX may influence mall traffic and consumer behaviour at these longstanding shopping centres, reflecting broader retail trends in the region.

Case Study: Pavilion Kuala Lumpur and Berjaya Times Square

According to DataSense Malls Analytics, 44.9% of the available outlets in Pavilion Kuala Lumpur are dedicated to Apparel & Accessories, while Restaurants account for another 20.66% of the retail mix. The large number of Apparel & Accessories stores highlights Pavilion Kuala Lumpur's focus on the fashion-forward demographics of the Klang Valley, while the substantial number of restaurants reflects the region’s consumer behaviour and preferences for varied dining experiences in shopping malls. 

In contrast, Berjaya Times Square boasts over 1,000 stores where approximately 35.8% of these stores are focused on Apparel & Accessories, with Beauty and Wellness comprising the second largest segment at 24.27%. Additionally, Berjaya Times Square offers more car park lots (4,300) compared to Pavilion Kuala Lumpur (2,626), potentially influencing mall visitorship and traffic since many consumers prefer driving. 

With the retail mix for Pavilion Kuala Lumpur and Berjaya Times Square established, how did both malls fare with the launch of The Exchange TRX?

Mall Visitor Traffic Analysis

Examining mall traffic trends at Pavilion Kuala Lumpur and Berjaya Times Square, as shown in Figures 1 and 2, we observed a slight dip in traffic during the first two weeks of December following the opening of The Exchange TRX. However, mall visitorship numbers rebounded eventually, indicating a temporary impact on these established malls.

Source: DataSense by PropertyGuru For Business

Source: DataSense by PropertyGuru For Business

Based on location pings, our retail analytics suggest the opening of The Exchange TRX had a temporary impact on visitorship at the subject malls, Pavilion Kuala Lumpur and Berjaya Times Square. While the initial attraction of the new mall caused a short-term dip in visitors, we observed a subsequent rebound in traffic for both malls.

Although the launch of The Exchange TRX could momentarily divert visitors, there are other factors that influence long-term visitor displacement. For instance, Berjaya Times Square benefits from its higher proportion of Beauty and Wellness stores, a segment known for attracting repeat customers. This loyalty contrasts with other retail segments, where customers are more prone to switch their shopping destinations. 

Ultimately, this highlights a broader pattern in consumer behaviour and retail trends in the area, showing how shoppers exhibit a preference for establishments with specialised services and wellness options. Consequently, malls like Berjaya Times Square are able to effectively capitalise on these preferences to sustain mall visitorship and engagement despite the allure of new competitors like The Exchange TRX.

Which Mall is More Resilient to New Openings?

Visitor Traffic Distribution and Resilience Analysis

Analysing the traffic distribution of visitors, Berjaya Times Square appears to be more resilient to the opening of new malls. Approximately 23% of Berjaya Times Square's visitorship exclusively patronise this mall, compared to only 13% for Pavilion Kuala Lumpur.

One possible explanation is Pavilion Kuala Lumpur's location at Bukit Bintang Station, which serves as a transit point for visitors travelling to other nearby malls, such as Lot 10 and Fahrenheit 88. Data shows that about 11% of Pavilion Mall visitors also visited Fahrenheit 88, and 9% frequented Lot 10. Conversely, approximately 12% of Berjaya Times Square visitors also visited Pavilion Kuala Lumpur.

Another factor contributing to Berjaya Times Square's resilience is its appeal to a proportionally older demographic (aged 55 and above), compared to Pavilion Kuala Lumpur (refer to Figure 3). This demographic is often more consistent and loyal, further reinforcing Berjaya Times Square's stability in the competitive retail landscape.

Source: DataSense by PropertyGuru For Business 

Conclusion: The Role of Placemaking in Mall Traffic and Resilience

Our analysis, supported by comprehensive retail analytics, indicates that existing malls in the Klang Valley, including Berjaya Times Square and Pavilion Kuala Lumpur, are not significantly impacted by the opening of new developments like The Exchange TRX. 

The overarching trend of increased domestic consumption and visitor arrivals effectively offsets any potential cannibalisation of mall traffic. To maintain their competitive advantage, malls must leverage not only their connectivity but also the principles of placemaking. By creating engaging and immersive environments, malls can ensure sustained visitor engagement and loyalty.

Stay Informed of Retail Trends and Mall Visitorship with PropertyGuru For Business

Unlock the full potential of mall analytics with PropertyGuru For Business, your gateway to premier property market intelligence. Our real estate data platform, DataSense, is designed to empower stakeholders with the most up-to-date insights into retail trends and mall visitorship. Dive deep into the world of retail data and leverage our precise analytics to forecast trends, manage risks, and seize opportunities today.

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