A Whole New Orchard Road

It was said last November that $40mil would be spent on a “make over” project for our famous shopping street. Then earlier this month, a newspaper report mentioned that Paragon is on the verge of completing its $45mil facelift of its own. And now, the new Ion Orchard that promises to bring about a whole new shopping experience, is ready to be launched, with 80% of its units being already filled up.

One of the worlds most famous shopping street, Orchard Road, seems to be hitting the limelight these days. Singapore Tourism Board has been pumping in endless amount of cash, hoping to attract tourists to Orchard Road, or rather Singapore. I tend to wonder with the current recession, is it worth putting in so much money and effort, with what is already termed as a world renowned street?

I grew up looking at the plot of land opposite Wheelock Place (where Ion Orchard is going to be located), and also occasionally going to the funfairs that were held there. Not sure about the rest of the Singaporeans, but to me that empty plot of land in a way represented Orchard Road. Its been empty for god knows how long, and also acts as an ideal place for funfairs to take place.

But on a serious note, how successful is Ion Orchard going to be? The most recent mall that was opened was probably Vivocity, and maybe Velocity in Novena. I’d say both seems to be doing rather well, as in the landlords are doing ok. Bigger department stores like Best Denki, Cold Storage, etc should survive, but what about the smaller retail outlets? I’ve noticed many boutique shops in Vivo changing hands quite often. Probably unable to survive in this economy with the high rental.

Compared to few years back when Vivocity was opened, the current economy is much worse with more retrenchments and paycuts. People are holding on more tightly to their wallets. Some even don’t trust putting their hard earned savings in banks anymore. According to the article most of the tenants in Ion Orchard are selling luxury items, like Cartier, Dior, Louis Vuitton and Prada. Of course branded shops like these do attract shoppers, but mainly window shoppers being the wrong type.

Square foot to square foot comparison, I’m sure Vivocity’s rental should be much cheaper (being in the outskirts of CBD), as compared to Ion Orchard. Moreover Vivocity boasts one of the biggest cinemas in Asia courtesy of Golden Village. Majority of the shoppers are probably movie-goers as well. If I’m not wrong Ion Orchard doesn’t have any cinema theatres inside. It would probably not be a wise choice to setup a cinema there as well, with Lido, and Cineleisure, and Plaza Singapura just a stone throw’s away.

Vivocity also has more affordable shops. Fashion boutiques, eateries, are usually affordable. To me having one luxury mall along the same street is more than enough. Its not like we see that Paragon’s jam packed with people on weekends, and the shop owners there are doing very well. Whats the point of having a second high-end shopping mall, just 300m away?

Give it three weeks after the opening, when millions of inquisitive Singaporeans have seen and walked by. Then we’ll see what happens. However the test of a shopping centre is NOT by how many people walk through but how many people carry bags. For its novelty, the opening of Ion Orchard would most likely draw ‘people carrying bags’ away from other existing shopping centres and dilute their business. After all the size of the cake (total retail market value) is not getting any bigger in the next year or so. As such, there are now going to be more fighting for a slice of it.

After the entire upgrading is done, I think I’ll miss the old Orchard Road, with peddlers by the side selling the $1 biscuit and ice-cream. Probably we’ll be missing them in the not so far future, with the government already giving warnings to chase them away. I do not see why they are not allowed to stay on Orchard Rd, they are making a decent living and are not begging or making a nuisance of themselves. They are a good relieve for those of us who enjoy good ice-cream without the Orchard Road price tag after shopping along the shopping belt. Shouldn’t the government be more flexible with the rules? They could still offer them a licence, then its up to these hawkers if they want to apply for it.

Like what one of the comments from ST said: “Life is Singapore is becoming too systematic and there will be no more little surprises” Orchard Road will probably start losing its Singapore flavour bit by bit. Before long, it will probably be quite hard to differentiate Singapore’s Orchard Road, and any other shopping district in America.

This entry was posted on Wednesday, February 25th, 2009 at 4:12 pm and is filed under Branding, Business, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.