The rise and fall of the ethnic mall experience in Canada

by Dakshana Bascaramurty

They all made boastful, superlative-ridden claims: The Largest South Asian Indoor Shopping Centre in the GTA! The Biggest Chinese Mall in North America! North America’s First Tamil Plaza!

But years after these ambitious projects under the names The Sitara, The Landmark, and T.Junction were announced – all with target opening dates that have since passed – none are open. The projects never got off the ground. Several other new mall developments or expansions of existing ones that would have amounted to millions of square feet of retail space have stalled in construction or been rebranded as mainstream shopping centres.

When 2001 and 2006 census data showed a sharp rise in Chinese and South Asian populations in particular GTA communities, a seed was planted in the minds of developers: ethnic consumers would want megamalls tailored to their community. But a boom in planned development from 2005 to 2010 hasn’t materialized into much, suggesting the ethnic mall bubble of the aughts has essentially burst.

Analysts, academics and even some behind these projects suggest that in a rush to cash in on what was seen as a burgeoning market and to mimic the megamalls of Hong Kong and Mumbai, developers failed to understand the shopping patterns of their target consumers and that the market may have already been saturated.

While Chinese immigrants have flocked to Markham and Richmond Hill and South Asians have created suburban ethnic enclaves in Scarborough, Mississauga and Brampton, the customer bases for these types of Asian megamalls is shrinking, says Shuguang Wang, a Ryerson University geography professor who has studied Chinese commercial activity.

“The younger generation of immigrants are attracted to the mainstream [malls] because of the selection, because of the price, because of the after-sale service,” he said.

The suburban Asian malls proposed in the past eight years are a major departure from traditional ethnic commercial strips of decades before, Dr. Wang explained. In the 1980s, Chinese retail activity was centered at Dundas and Spadina. Then the Chinese migrated east and set up another retail area at Broadview and Gerrard. As immigration from Hong Kong increased in the nineties, they moved to North York and Scarborough and strip malls and restaurants began cropping up. They began settling further north to Richmond Hill and Markham in the late nineties and built the first large, indoor Chinese malls.

A saturated market and poor financing

While Markham’s Pacific Mall, opened in 1997, might have been the go-to destination for electronics a decade ago, now many Chinese-Canadians flock to big-box retailers instead, Dr. Wang said.

“It’s better at the other malls – I don’t like it here,” said Fenny Lin, a 29-year-old Chinese woman who was pushing her four-month-old son in a stroller through Pacific Mall’s maze of tiny shops on a recent weekday afternoon.

Food and doctors’ appointments – she had an appointment that day at Pacific Medical Clinic – are the only things that attract her to Pacific Mall. For clothing and electronics, she goes to mainstream malls: Markville Shopping Centre or Fairview Mall, she said.

For Susan Chen, a 26-year-old who works in retail, a trip to Pacific Mall (on this day to get film developed) is less of a destination and more about convenience – she goes there because she works only 10 minutes away. “We’re already here, so it’s like a one-stop thing,” she said. “I think there’s enough [malls] to meet the demands. I don’t think there needs to be more.”

The trend crosses over to South Asian populations too, says Ezhil Baskaran, a Toronto Geographic Information System analyst.

She tracked the number of South Asian businesses (including clothing stores, grocery stores and restaurants) in the GTA in 2004 and in 2009 and found that in that period, the number of businesses declined in every category except for restaurants (their ranks grew by 28 per cent. She said this is because they attract many non-South Asian customers, too).

South Asians can now find many specialty items from “back home” at mainstream grocers such as Loblaws, which have targeted minority groups. Clothing stores have declined, she theorizes, because many South Asians adapt to a Canadian style of dressing once they land here. Many still travel to India to pick up the saris or salwar kameezes for special occasions rather than buying them in Canada at “exorbitant” prices, she says.

It could be why Taj Centre and The Sitara – two South Asian megamalls proposed in Brampton and Scarborough, respectively – have not been built. But it might also be due to the relative inexperience of the people who proposed them. Taj Centre’s developer was the president of what seems to be a now-defunct marketing agency and The Sitara’s is the president of a seafood importing company.

Yaso Somalingam, the architect behind the Tamil-themed T.Junction plaza that was to open near Eglinton Avenue and Warden Avenue in Scarborough in 2009 (in 2010, the land was sold to another developer), also blames inexperienced developers in part for the failure of the shopping centre.

“I think the main reason they collapsed was because their assumption of getting financing was very wrong. They got some bad advice by the accountants and the financial agents,” he said.

The condo model and wary investors

Gavin Barrett, a partner at the multicultural idea consultancy firm Barrett and Welsh, says the concepts for Chinese malls were born out of Hong Kong models, which are condominium-style, meaning each store unit is sold rather than leased. South Asian mall proposals, on the other hand, drew from the large complexes in Mumbai and Delhi which cater to the upper-middle class and offer a mix of shops and entertainment.

But would-be buyers of space at proposed Chinese and South Asian megamalls have noticed the shift in consumer habits and that’s what stopped projects from moving forward, Dr. Wang theorizes.

“The main reason is demand. If enough buyers to invest to buy a unit, the construction is started. Apparently they could not sell enough units.”

The Landmark, a Chinese mall planned for the corner of Middlefield and Steeles, should have opened its doors in 2008. Those who’d bought units in the mall back in 2005 watched the land sit undeveloped for months. Two years ago, after many failed attempts at getting their money from developers Terry Yiu and Charles Chan, a group of about 30 buyers turned to Ken MacDonald, a Richmond Hill lawyer, for assistance. A few cases were taken to court, but many got their refunds through out-of-court settlements, he said. Just this week he heard from another buyer seeking a refund for the unit he’d purchased in 2005.

Mr. Yiu and Mr. Chan could not be reached for comment.

Court records suggest the two struggled for years to secure financing and last summer their numbered company was in receivership. DeLoitte & Touche, Inc., the receiver, sold the land where the mall was to be built to Mady Development Corporation.

Charles Mady, the chief operating officer of Mady Development, says he plans to turn it into a mainstream mall rather than keeping it Chinese-themed.

That’s the direction the Remington Centre, proposed at Kennedy and Steeles, is headed. It’s one of the lone projects on track, but it’s changed its marketed identity over time. It’s to be built on the site of Market Village – another Chinese mall – which sits beside Pacific Mall.

“We wouldn’t see it as a risky gamble [to open a mall at that location] because we do have the data supporting our project: the population growth, the expansion of the York Region,” said Albert Yong, director of sales and leasing for the Remington Centre.

While it was first promoted as a Chinese-themed mall, Mr. Yong describes it now as a “crossover mainstream mall” – presumably fewer bubble-tea shops and a retailer mix similar to that of the Eaton Centre. It will be connected to Pacific Mall, though Sam Cohen, Pacific’s developer, said it’s too early to discuss the details of the double-mall project.

One of the only projects currently underway is King Square – a million-square-foot Chinese mall at Woodbine and 16th Avenue. Construction began in March, according to a receptionist at the project’s head office, but it’s been a long time coming.

“It had several false starts,” said Dr. Wang. “They had a groundbreaking ceremony a few years ago.”

As well, a robust, pre-existing matrix of businesses targeted at ethnic minorities has made it hard for some businesses to flourish.

This spring, a new jewellery store with outposts in other parts of the GTA opened at Tamil plaza at Markham and Steeles. Its early success has likely sealed the fates of other jewellery stores in the complex, Mr. Somalingam says.

“Gradually what happens with the stores which have already opened is they have no choice but to close it or do something else.”

After 16 years at Pacific Mall, Edwin Wung, the owner of Wing Tai Hong Trade Company Ltd. – a Chinese herbs store – says given the competition and slower traffic at his shop, he can no longer count on Chinese clientele if he wants to stay in business.

“In order to survive you have to look into different customers – not just the Chinese. You have to open to different cultures of people,” he said. courtesy: The Globe and Mail