Why Malls are Popular in the Philippines

Supermalls in the Philippines are the product of Henry Sy when he built SM North Edsa in the 1980’s. Back then, malls took the form of department stores such as Isettan in Cubao.

Sy’s innovation was to add an airconditioned environment to the usual area of retail shops. This made shopping cool, clean, and convenient, which is a major improvement in polluted urban centers.

The trend of rising power rates arising from the evil privatization of electricity and water made malls even more appealing. Instead of spending for electric fans or aircon at home, they could spend their time in malls and do their busness there.

SM was not the only one to do this. There were other malls such as Ever, Uniwide, Manuela (Starmall), Makro, and Ayala (Glorietta, Alabang Town Center).

However, SM outdoes the rest by emphasizing size and economies of scale. This is proven by SM Megamall, North EDSA, and Mall of Asia. This allows SM to use contractualization to cut prices to drive away competition.

After the other malls fail and close down, then SM raises prices. People will then have no choice but to buy from it.

So far, only the Chinese mall owners such as Robinsons and Puregold seem to be able to keep up with SM.