With 55 operating malls that cover exactly 7.3 million square meters where 17,192 tenants sell their wares, as of the end of October last year, SM malls sell more than P300 billion yearly, Henry Sy’s malls are definitely the biggest chain of retail outlets. 
 
The annual sales do not include the P190 billion in yearly gross revenues recorded by SM Retail, one of the major business empires built by the country’s top billionaire. 
 
We sent a questionnaire to Teresita Sy-Coson , eldest among the children of the Henry Sy, the Philippines’ richest man.  Mrs. Coson, is known to be the first eldest daughter of Chinese immigrants who has full authority over her younger brothers and sisters although Henry knew enough not to make them compete in the same business. 
 
Following is the full text of my questions to Tessie Coson and her prompt reply sent as early as Dec. 1 last year. It  is unfortunate I had a mild stroke in the wee hours of November 30. Here goes our conversation with Mrs.  Coson,  chairman of Banco de Oro. 
 
1. How many malls has the SM Group built? 
 
As of end October 2015, SM Prime has 54 operating malls in the Philippines. We will end 2015 with 55 operating malls totaling 7.3 million square meters in gross floor area. Our malls are strategically located in key cities in Metro Manila, most of Luzon and key provinces in Visayas and Mindanao. 
 
Later this year, we are opening one of our most important malls in Cebu called SM Seaside Cebu. It is important because it is another catalyst project that is similar to our premier malls in Metro Manila such as Mall of Asia, SM North EDSA and SM Megamall. These malls tend to generate increased economic activity in their host communities and support a wide network of tenants, suppliers, outsourcing companies, and transport providers. They generate thousands of jobs and increase the number of formal retailers that generate new taxes for the local governments. Furthermore, they enhance the value of the surrounding properties and bring in a broad range of customers. SM Seaside is seen to be a catalyst project for the Visayas region which is a new growth corridor for SM as a group. The mall sits on a master planned district that will become a business and entertainment hub in Cebu’s South Reclamation Project (SRP). 
 
2. What does it cost to build one? 
 
The average cost to build a mall structure is around P20,000 per square meter. This excludes the cost of land. 
 
3. How many concessionaires are operating in the malls? 
 
We have a total of 17,192 tenants (concessionaires) in all SM Prime malls which is a combination of domestic and international companies. A large number of our tenants have grown with us organically over the years and we continue to support them even as we develop new tenants to broaden our offerings and customer base. 
 
4. What are their estimated total annual sales?
 
The combined estimated annual sales of our tenants are roughly P350 billion. 
 
5. The malls are one-stop shops. This being so, might there be new products developed by concessionaires and are now sold in the malls? 
 
Our malls are concept- driven because we always look at trends, preferences and consumer aspirations. This makes retail very dynamic. That said, we encourage our tenants to be as dynamic and innovative as we are in coming out with new products or services so they can enhance customer experience. This ensures high foot traffic and customer loyalty as our malls aim to meet the needs and aspirations of the whole family. A classic example is how the Cyberzone emerged as a very important area in all of our malls. Technology is moving so fast that our Cyberzone tenants constantly introduce new gadgets and concepts. 
 
6. Did the malls nearly completely took  over the groceries and department stores? 
 
It is evident the retail business grows faster in the malls. Does this mean the “sari sari’ stores are getting fewer and making shopping or buying essential goods remarkably easier for the consumers? How many people are working in the concessions either as owners or employees? In this sense, the malls help create jobs. 
 
The malls serve a different purpose than retails stores. The malls are like community centers where families, friends, even tourists go to do a mix of activities like shopping, dining, and/or entertainment. Stand-alone stores, on the other hand, are purely for shopping and/or impulse buying. Sari-sari stores also provide unique services in a community such as informal credit and selling in very small packs which they buy in bulk from large supermarkets or hypermarkets. 
 
7. What businesses in the malls are owned by the SM Group? 
 
If they are supermarkets, might we say the SM Group owns and operates the longest string of supermarkets? What are their estimated annual sales? 
 
SM Retail Inc., which is a subsidiary of SM Investments Corp., owns the chain of large format department stores and supermarkets found inside the malls. The malls also house stores that are in partnership with SM Retail like international brands Uniqlo, Forever 21, Watsons and Ace Hardware. Outside of the malls, SM Retail also operates SM Hypermarkets and its mid-size food stores called SaveMore.
Together, they generated P198 billion in total sales in 2014. SM Retail is the country’s leading retail company. 
 
8. How extensive are credit cards used in buying goods and services from the malls?
 
Only 70 percent  to 80 percent of our retail sales are still purchased in cash and the rest through credit cards. This stems from the fact that credit card penetration in the Philippines is still one of the lowest in Asia. 
 
9. What might be the average daily sales of concessionaires in the malls? 
 
It is not possible for us to derive this because of the diverse mix of tenants that we have from shopping, food, entertainment, to services like spas, clinics and even government services. 
 
10. I have long noticed all malls have free entertainment on Sundays mostly for kids. Does this help push sales? 
 
Yes, we do this to drive foot traffic in the malls as a primary goal. Thereafter, it is up to the retail stores to draw the people in and get them to buy or patronize their stores. This is why we focus on concepts, because it is the concepts that excite and draw the customers into the stores or outlets to buy, eat, or experience something new. Service is just as critical because that will determine if the customer will return or not. All these combined drive up the sales numbers. 
 
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