he truth, but while so much of the attention in the industry is focused on the ostentatious supermalls in Asia’s major downtowns, they are not the only malls that are experimenting and pushing on the frontiers of the shopping centre business model. The malls in the second-tier cities are evolving too.  In these secondary cities, there is often only one mall, it has to be everything to everyone in terms of tenant mix, and it must be firmly mid-market in demographic targeting if it wants to maximise its customer draw. In the megacity, by contrast, there are competing malls that can often tailor themselves to a specific demographic and lifestyle group, and often to tourists. You can easily see this in the main shopping districts of Bangkok, Singapore, Seoul and the other big cities, where some malls are heavily focused on affluent locals and tourists who are shopping for upscale global brands, others are trendy mid-market, still others focus on products unique to that country, and so on.  Central Khonkaen: Mall as mixed-use centre Central’s malls in the secondary locations in Thailand and Vietnam can be thought of as the workhorses of Asian retail. But more than that, they are pushing further and further into additional uses under the one roof.  Take Khon Kaen, in northeastern Thailand for example. Khon Kaen is the country’s eighth-largest city with a population of around 130,000, but it is capital of a province with 1.8 million people. There are very few tourists here, but the local occupational structure is varied, with a mix of manufacturing and services, the latter including the region’s oldest university, dozens of private and public educational institutions, and strong healthcare and banking sectors. The dominant — actually the only — major mall in the city is Central Khonkaen. The five-level mall stands next to Highway 2 at the main entry point to the city from the south. Stop and take a look inside and you can see how regional malls in secondary cities have evolved from their roots as general merchandise shopping destinations into mixed-use centres.  Central Khonkaen has nearly 50,000sqm of net leasable area and 347 tenancies. The mall is 87 per cent occupied, and, after the ‘trophy’ centres of Bangkok 450 kilometres to the southwest, it is deliciously functional and down to earth. It also showcases much of what its owner, Central Retail, is able to do. Central owns and operates the mall, the upscale Tops supermarket that anchors one end, the B2S book and stationery store that anchors the other end on the ground floor, the multilevel Robinson department store that sits on top of that, and another office equipment concept, Office Mate, on the third floor. That’s not all: Central has its own private label brands but it is also holds exclusive retailing rights to a number of high-profile brands (for example, Wrangler and Skechers) and joint venture arrangements with still more (such as Watsons). What Central doesn’t directly operate itself, it collects rent from. (A little over three per cent of company revenues are derived from rent and associated services.)  The ground floor of Central Khonkaen is stuffed with clothing pop-ups and this is one of the three major indicators of the evolution of the regional shopping mall in locations like this: there are only about 25 traditional ‘inline’ fashion shops, including Uniqlo and H&M as mini-anchors, a far cry from the proliferation of apparel specialty shops for which mall retailing was once famous. Now, there is just a core of inline shops and a legion of pop-ups that provide constant freshness, fit lean budgets and make the common area vanish completely. Meanwhile, inline space is freed up for other tenancies. The second indicator of evolution is now taken for granted: it’s that food is almost ubiquitous. The fourth level is all food but the category has a presence everywhere in the mall. In fact there is so much food that the shops are subcategorised in the store directory by type (Japanese, Chinese, dessert, fast food and so on). The third indicator of evolution is the expansion of uses: services, technology and entertainment. There are eight bank branches, the major phone companies, a gym, two language schools, two music schools, a cinema, Family Entertainment Center and even the Provincial Electricity Authority has an office here. So this is not just a few non-retail uses thrown in there as a filler for space vacated by disaffected retailers: it’s a true mixed-use centre. The ‘everything’ company Central Khonkaen, as an ‘everything’ mall, is a reflection of the eclecticism of its operator, Central Retail, which is an ‘everything’ retail company. The company’s recent corporate results have been strengthening across the board, reflecting the nascent post-pandemic retail recovery in Southeast Asia generally.  Fashion remains incredibly important to the company’s bottom line because it is such a high-margin business compared to food and other lines: it accounts for 24 per cent of company sales but 40 per cent of earnings (EBITDA). Central’s profit margin on fashion is 19.6 per cent, compared with 10.8 percent for hard goods and a slender 9 per cent for food. Total revenues for the first half of the year were 113.1 billion baht (US$3.2 billion), up 19 per cent from the first half of 2021. The sales component was up 19 per cent while the rent and services component rose by 17 per cent. Net profit came in at 3.1 billion baht (US$88.6 million). Things are tracking well and Central has big ambitions. It has been busy launching a number of new formats including a home improvement chain, and this month is the launch in Bangkok of a membership wholesale club format called Tops Club which — like Costco and Sam’s Club — is targeting a younger, affluent customer base, with 70 per cent of the merchandise imported from overseas. Meanwhile, despite all the fuss about new formats, Central’s workhorse malls in secondary locations continue to serve their core customers, quietly, understatedly, but just as effectively as ever as they steadily shift away from reliance on inline specialty soft goods and place greater emphasis on food,  services and technology. Still one-stop shops, but and the number of uses is continually being expanded.