Numbers up for fifth straight year; intense rivalry cited as reason.

Mon, Feb 02, 2009
The Straits Times

By Chua Hian Hou

Sim Lim Square 'horror stories'?
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COMPLAINTS against Sim Lim Square retailers rose 30 per cent to 244 last year, increasing for the fifth consecutive year.

The Consumers Association of Singapore (Case) received 188 complaints about retailers in the mall in 2007, and 119 in 2006. There were 103 complaints in 2005, up from 69 in 2004.

Notable incidents last year included a Filipino tourist who filed a police report against one shop, alleging that its salesmen had assaulted him.

A Hong Kong tourist also complained in November that a shop refused to honour an earlier agreement to exchange a digital camera. The shop changed the camera only after the Singapore Tourism Board (STB) intervened.

One reason for the mall's bad reputation is the intense level of competition, said Mr Nicholas Mak, property consultancy Knight Frank's director of research and consultancy.

While its tech-haunt status is a draw, it has brought about intense competition between retailers peddling essentially identical items at razor-thin margins, said Mr Mak, who has personally experienced 'sales tactics that don't leave buyers with a good impression'.

Another major reason is the mall's ownership structure.

Sim Lim Square is a strata-titled building - the shop units are owned by individuals, just like home owners at a private condominium. As such, each landlord is likely to look out for his own interest - rental income - over that of the collective, said Mr Mak.

So even if a tenant is evicted by one landlord for unethical business practices, he can simply rent another unit. The new landlord may also not be aware of the tenant's history, he added.

The Straits Times understands that shop units are rarely unoccupied for more than a week.

Landlords can also run a business, and if it brings disrepute to the mall, there is little that can be done because the individual owns the unit and cannot be evicted.

In short, said Mr Mak, nobody can 'kick them out, and keep them out', unlike in single-owner malls that may be able to police their tenants more effectively.

According to Sim Lim Square's building manager, Mr Chan Yew Tin, there are about 300 separate landlords for the complex's 500 units, with a few running their own shops.

He said he was aware of the rise in complaints, and added that most of them were related to just 'six or seven' shops. But he declined to name these shops.

While he notifies the landlord and tenant involved about each complaint, there is not much else that can be done due to the ownership structure, he said.

Mr Mak believes the number of complaints could rise this year.

This is because the income of sales staff is traditionally commission-driven.

One retailer, who did not want his shop named, told The Straits Times that some sales staff's incomes were wholly commission-based.

Such staff are likely to become more aggressive in order to maintain their income in the face of lower consumer spending, and to avoid getting fired.

Case executive director Seah Seng Choon suggested that the mall's 'management should aggressively promote the good retailers among them to the consumers of the mall'.

The mall has a programme, called STARetailer, which recognises honest merchants, requiring them to maintain a zero complaint rate.

Mr Chan estimates that 60 per cent are in the programme and have maintained a zero complaint rate.

Mr Chia Hung King, manager of Sim Lim Square computer retailer Cybermind, had a more radical suggestion: blacklist the disreputable retailers.

The STB, he said, should consider making its currently online-only retail blacklist more prominent, perhaps even making it compulsory for malls to display this list at their entrances.

Mr Chia, whose shop is on the STARetailer list, said he would not make purchases from some of the 'notorious' shops in the complex, although he is there practically every day.

But despite these issues at Sim Lim, Mr Chia, who also has an outlet at Funan DigitaLife Mall, will not be giving up his shop there any time soon.

Sim Lim's reputation as the place for affordable electronics has been 'built up through the years...it's not easy for another mall to take its place, and at this moment, Sim Lim Square can't be replaced', he said.

chuahh@sph.com.sg

This story was first published in The Straits Times on 31 January 2009.


For more The Straits Times stories, click here.

 

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