The Jakarta Post
Education institutions, food and beverage outlets and fast fashion retailers are gradually replacing department stores at Jakarta shopping malls as the emerging middle class increasingly looks for experience rather than tangible goods, a recent report suggests.
Property consultancy Jones Lang LaSalle (JLL) Indonesia’s Jakarta Property Market Update 4Q19 issued in January showed that department stores, which were traditionally anchor tenants to attract cross-section visitors, are now being replaced by so-called “mini anchors”.
JLL research and digital markets head James Taylor said education institutions, specifically English schools, were one type of tenant that had taken up mall space—sometimes in locations where department stores have closed.
“Other tenant types that have taken this kind of space are food and beverage outlets, entertainment facilities like cinemas, fast fashion stores and gyms,” he told The Jakarta Post in an email.
English education institutions, such as Wall Street English and English First (EF), have recently been opening new branches in shopping malls. Wall Street English branches in Jakarta are found in shopping malls Kota Kasablanka, Central Park, Mal Kelapa Gading 3, Pacific Place and Gandaria City. Meanwhile, EF has branches in Pejaten Village, ITC Permata Hijau, Mal Pluit and Taman Mini Square, among others.
Kota Kasablanka developer Pakuwon Jati said the learning institutions inside shopping malls were targeted more toward adults, because they offered experiences other than just education.
“The education institutions also have seminars, talk shows and are a good place for networking,” Pakuwon Jati business development director Ivy Wong told the Post over the phone on Wednesday. “Malls are also [easily] accessible, and students can hang out after class.”
Gandaria City is an upscale mall in South Jakarta. (Shutterstock.com/antoni halim)
Dewi Aristyowati, a 51-year-old mother of three, epitomizes the new consumer trend. Her youngest son Fandi takes lessons at Wall Street English in Gandaria City mall and at music education center Yamaha Music School in Pondok Indah Mall, both in South Jakarta.
“We chose the places because they’re close to our house,” she said. “Our family would meet him after music practice on weekends, have dinner, go shopping and go home.”
Since his second year at junior high school, Fandi liked to hang out at the mall with his friends after class, said Dewi. Fandi even tried to synchronize his schedule with his friends, so they could watch a movie together or share a meal, she added.
Fandi, now in his second year of high school, still attends both English and music lessons.
Ivy of Pakuwon Jati said doing more than just shopping had become increasingly common at malls in the last five to 10 years, especially in big cities like Jakarta and Bandung.
“Going to the mall has become a lifestyle, and people seek experiences now,” she said, adding that the trend would continue, especially for locals and domestic tourists, while it was usually foreigners who came to shopping malls to actually do shopping.
Read also: 115 million Indonesians not yet economically secure: World Bank
One reason behind such behavior, Taylor of JLL said, was the growing urban middle class.
“But consumer habits are also a factor,” he said. “Now people are more likely to spend their money on experiences rather than tangible goods.”
A 2018 Euromonitor International survey found that Indonesians’ spending habits were shifting from the purchase of products to services, which entailed experiences like traveling and dining.
The research company noted that two categories – consumer food services and travel – had seen great growth over the last five years, compared to other categories, such as clothing and household goods.
Euromonitor also found three megatrends that would shape Indonesian consumer behavior in the future, one of which is the emphasis on experience.
JLL’s Jakarta Property Market Update for the fourth quarter of last year also found that new malls expected to be completed in 2020 and 2021 would add around 210,000 square meters to retail space supply this year.
Last year, the shopping malls occupancy rate for Jakarta was about 90 percent. It is expected to drop to a still healthy 85 percent this year because of the new supply.