Henry Sy knows the Filipino mind and he knew it early enough in his life. That is the secret of his success in building 42 shopping malls that cover a floor area of 5 million square meters or 500 hectares scattered all over the country.

Hans Sy, son of Henry and president of SM Prime Holdings, speaking for his father during a special exclusive interview with Malaya Business Insight, said that Henry came to the country from Xiamen (then called Amoy) at the age of 13.

Hans said that his father knew early enough that the Filipino mind is aspirational. There are simple things in life that the Filipino wants but his government or the business community cannot provide, or maybe fail to see.

According to the younger Sy, the Filipino loves to relax in parks but there are very few of them.

He also wants to buy many things with little money but there is no place where he could relax by himself or with his family and by design or impulse lay his hands on a few items.

That gave Henry Sy the idea of constructing a mall in North EDSA, which opened in 1985. Henry Sy says his son thought he correctly read the Filipino mind. It turned out that 60 percent of the sales of stall holders or tenants in all the malls shop is on impulse.

Henry Sy was intelligent enough to know that there has to be a place where the Filipino can give vent to the impulse. Malls are the venue.

According to Hans, his father also knew that the Filipino must find everything he wants or needs under one roof. Malls are the answer. Everything is available in the malls – from fresh meat and fish, to physicians, to garden and other tools, to food, to everything.

But the Filipino, in the mind of Henry Sy, also needs better service and some fun. That is why nearly – if not indeed all – of the malls have entertainment areas where live bands play regularly on Sundays and holidays, the traditional family day of the Filipino.

He also knew that the elderly need more help. There is a section in every mall where senior citizens and overseas Filipinos, whose dollar remittances fuel demand for consumption goods, can have free snacks and limited overseas telephone calls.

None of these conveniences would be possible if the malls had not attracted tenants who, in many cases, according to Hans, discovered there are items they could make and sell by having a space in the malls.

The malls, in a manner of speaking, became mothers of some inventions.

Henry is a most observant businessman. Long before he got into building malls, he noticed that people, particularly those who are working, have only one day – Sunday – to take a stroll and shop.

He opened his department stores on Sundays long after the Blue Sunday Law was lifted. His supermarket made additional revenues. The Filipino is happy he could shop on the only day he could.

Today, the 42 malls have 16,000 tenants, many of whom are operating in several malls.

According to Hans Sy, his father, who has become one of several Filipino billionaires and probably one of two (the other is Lucio Tan) who started from the bottom in a department store along Rizal avenue, insists on investing for expansion all the profits the operations make.

For the current year, as it was last year, SM Prime, which owns and controls the malls, has set aside P8 billion in capital expenditures for expansion.

Hans Sy pointed out that his father modernized retailing by providing the conveniences to the impulsive buying Filipino. Before the malls came up, the Filipino had to ‘wander around’ if he had a shopping list.

He went to the grocery or fresh food market for fish and meat. He moved to the department store for some clothes or a pair of shoes. He took time to go to the hardware shop for nails, hammer and other home necessities.

The malls made all of these goods available under one roof.

Sales of 60 per cent of the tenants are hooked to a central computer system. They pay a small percentage of sales to the owners of the malls. About 40 per cent of the tenants – mostly those selling computers, jewelry and optical shops pay rent on a per square meter computation.

According to Hans Sy, his father makes sure that around 30 per cent of the spaces in the malls are left unoccupied. He reserves them for other ideas of other people. In many times, Henry came up with ideas of his own.