SM Investments Corp. (SMIC) will launch six new malls in China in the next three to four years, which will bring to 10 the total number of its malls in that country.

SMIC Chief Financial Officer Jose Sio said in an interview with reporters that in three to four years time, six SM malls will be built in China that will bring the company’s total to 10 malls.

At present, SMIC has four malls in China, which posted a substantial 30-percent increase in revenue to P1.3 billion in the first half and contributed 9 percent to the company’s consolidated revenues. For this year alone, SM will be launching another mall in China, he added.

“It’s actually just easy to open malls, the hardest parts are the manpower, the merchandising, etc.,” said Sio.

He also said that in 2014, SM will be launching the biggest SM mall in China, which will have a total gross floor area (GFA) of 550,000 square meters. It would be larger than the Mall of Asia, the largest mall in the Philippines, which has a GFA of 390,193 square meters.

“Our relationship with China has been very well and was not even affected by the Scarborough shoal issue that started several months ago,” Sio said. 

“In fact, when we are just developing our malls there, we are not the one who looked for location; it’s actually some of the China government agencies who did it,” he said.

Sio added that even if their businesses are not affected by the issue, he still believes that “China and RP need to sit down and talk about the issue.”

On the situation of the retail sector in the Philippines, Sio said that they are not worried about the consumer behavior in the country.

“Retail in the Philippines has been continuously growing despite financial crisis, global crisis, etc.,” he said. 

“Philippine economy is very positive and the satisfactory growth in the retail is high,” Sio added.

He also said that even though Europe is experiencing problems in its retail sector, retail in the Philippines remains to be bullish.

“What is important in the retail is volume—the more volume you sell, the lower the cost will be,” Sio added.

SMIC five-year retail program

On SMIC’s retail segment—covering both groceries and department stores, and food and non-food—Sio said that the company has prepared a five-year retail program.

He said that they are just trying to accelerate the program but as of now, in terms of the outlets, they are targeting to build 30 stores a year, which will also be applied for the next five years.

Regarding the expansion, Sio added that they are in talks with small groups and are looking at provincial areas mostly in Visayas and Mindanao.

“Five each in a small city, area or province will be fine,” said Sio when asked how they will allocate the 30 stores.

In 2011, the SMIC retail group opened 34 new stores, which brought the total to 169 stores and a store network of 41 department stores, 33 supermarkets, 65 SaveMore branches and 30 hypermarkets.