Inside Asian Gaming

December 2015 inside asian gaming 25 Insights differences with duty free goods, quality assurance differences (think baby products, healthcare and drugs) and daily price variation such as with gold. IAG: How have the new openings of Galaxy phase 2 and Studio City affected retail in Macau? GS: The new openings of retail portfolios offer a wide range of choices to both locals and tourists. Quite a few international brands have entered Macau for the first time. With environmental and political policy changes, Macau is stepping into a “new normal”, which means apart from gaming as the major revenue, non-gaming sectors such as retail and MICE are playing more important roles. The increased diversification is a healthy and positive direction that Macau is heading in. IAG: Are the tastes of the mainland visitor maturing compared to a few years ago? GS: Definitely. The middle class clusters have been growing rapidly with China’s booming economy in the past few years and Chinese people’s brand awareness is growing. More and more shopping malls are opening in China with international brands and Chinese people travel more to Hong Kong, Macau and destinations outside China. Visa requirements for travelling Chinese are relaxing. A few years ago Chinese people might look for brands with big logos that are easily recognizable on the street to show off, but now they are looking for subtle luxury symbols that makes them feel different. Things like luxury designer labels, limited editions and so on. While there is no doubt the overall brand awareness of mainland tourists in Macau is still behind those from Hong Kong and Macau – especially with more and more mainland tourists from second and third tier Chinese cities entering Macau – catching up the gap won’t be too far away given all the rapid changes in China. IAG: There are plenty of high-end offerings in retail for the VIPs, but what about mid- range for the growing mass floor player? GS: Types of retail offerings are all about supply and demand. Usually retail mix positioning and planning is implemented and confirmed before retail professionals approach retail brands to come into the malls. The whole planning, leasing and opening process generally takes around two to four years. Therefore, what you see now reflects the market demand two to four years ago, which explains why there are plenty of high end offerings for VIPs in the current retail mix at most malls. With the “new normal” market, I believe the retail mix will be inclined to become more affordable. However, the retail mix also depends on the whole positioning of the property and its branding. If the property’s “A few years ago Chinese people might look for brands with big logos that are easily recognizable on the street to show off, but now they are looking for subtle luxury symbols that makes them feel different.”