Q: Why do you call Core Pacific City a "Living Mall"? How is it different from other shopping centers?
A: The Living Mall is based on four strategic concepts, which you could say is a first anywhere in the world. The first is to use entertainment to promote retail sales and to integrate entertainment into retail sales. The second is to provide what I call "time-obstacle-free" 24-hour service for all the various time-disadvantaged groups. The third is to integrate the virtual with the real, so that our services extend worldwide. The fourth is to use entertaining methods so that people naturally learn things when they come to the Living Mall, starting with English and extending to astronomy, geography, math, chemistry. . . . These are the four main directions of the Living Mall.
Of course, we are just getting started, and our "grades" for all four areas remain very low. For example, we get about a 60 for "entertainment-driven retail sales," a 30 or 40 for round-the-clock operations, a score of 20 or 30 for "entertainment-driven education," and only about 10 points for "integration of the virtual and real."
To ensure the realization of these four concepts, the Living Mall has established eight profit centers, which we call "the four big centers, three locations, and one network." The four centers are a shopping center, entertainment center, media center, and integrated services center, with each center being unique.
Q: Is this your own concept, or something learned by referring to experience overseas?
A: What are you talking about, referring to what? Everything has been developed on our own. All of these ideas come from my life, from what I have learned about life since childhood to the present.
For example, as a child I never enjoyed studying very much, but now I'm very knowledgeable, and even three PhD holders put together couldn't outdo me. Why? Because as long as the approach is fun, I can learn very well. Although in society not many people have come to accept learning through entertainment, and there has even been controversy over a kid winning a gold medal in a global computer game competition, this is a very practical problem, and I'm a case in point. There are really very few people in the world who do well with books. Most people don't enjoy studying, and are unable to stand out by studying. For these people, the only way they can achieve their educational goals is through fun. This is simply something you understand from life, and a realization of a dream I've had since I was a kid.
Another example is that I have always been a night owl. It might be the middle of the night, but I really don't want go to sleep, and would rather go out shopping. But there's no place to go, and shops are all closed. Also, the government spends so much money to build so many facilities, and I pay so much in taxes, why is it that I can't enjoy these government facilities? Why are they all closed at night? This is why I emphasize "time-obstacle-free" provision of shopping, leisure, and all kinds of services, and this is also based on something I've hoped for since childhood.
Let's talk about the integration of the virtual and the real. When I was a child I had this fantasy of how great it would be if I had thousand-mile vision. Now the Internet is thousand-mile vision, so how could I not use it in my life's castle?
Therefore, the Living Mall is really the realization of my dreams. Unfortunately the media is very hard-nosed, and only plays up stories about safety inspections and retail turnover, without seeing the real meaning.
Q: How will you realize these four concepts in practice?
A: Let's look at entertainment-driven sales. The most important thing is to create an overall feeling of happiness and comfort in the mall, and to provide a healthy recreational environment. Every day from four until six, and again from seven until nine, there are live bands performing. The sound of music reverberates through the entire space, and customers on every level will stop to listen. The acts have all performed in well-known pubs, and are of very high quality. It's a great feeling to shop to the sound of live music. There are also many very special stores, and the feeling when you go into them is completely different from any other stores in Taiwan.
As for the integrated services center, immediately upon opening, the Living Mall set a record of 500,000 people entering the premises in a single day. Since my media and my shopping area both have the most people coming and going in the entire world, I can make myself into a channel for people to use. Therefore, in the future the Living Mall will help governments and all their subsidiary agencies from around the world, as well as large corporations from around world, with any services they may need. For example, if a government agency wants to issue a new administrative regulation, we can help them get the word out.
As for the integration of the virtual and the real, currently there are some technical limitations. However, we are different from general shopping centers in which people order products online but have to pick them up at the counter. We have already resolved all problems of product flow, cash flow, and information flow. For customers, there's one feeling that comes with shopping in the actual stores, but virtual shopping also has its appeal. We provide the world's largest and most unusual globe-shaped shopping center, and our virtual shopping center is also very advanced. The two of them play different roles.
Of course in theory all products can be purchased over the Net. But in order to maintain some distinctions, in the first phase we are asking that stores only provide part of their top products for sale online. In the second phase, we hope to realize the pan-Living Mall concept, which is to use our brand name to service stores outside of the Living Mall, and even in the future to achieve the function of a brand name for Internet services among consumer-oriented industries. Our "four big centers" are essentially starting off from the actual Living Mall structure, but in the future will expand toward a pan-Living Mall, and even evolve into a transformation of the retail sales and consumer industries.
Q: The capital requirements must be very high. What is your market strategy?
A: The costs for the Living Mall were NT$24 billion, of which NT$12 billion was borrowed from banks, so the capital pressure is extremely heavy. So I'm facing the third financial crisis in my business career. But I estimate that in 2002, which will be the first official year of operations for the Living Mall, we can break even, and that we will gradually begin to turn a profit.
In other words, after doing all the work of preparing for 15 years, we suddenly decided in the worst possible economic circumstances to open it now, so I don't have excessively high expectations for revenue. NT$20 billion in one year will be fine. I've heard people saying that the annual sales target at the new Breeze Center is only NT$5 billion per year, and they ask whether or not we are blowing smoke. In fact we aren't. We believe that the Living Mall will change the way people live, and not merely be another player in the market. Inevitably we will carve out some part of the market, but the main thing is to create something new. Moreover our "four big centers" will all create revenue, whereas Breeze only has shopping, so this is not really a fair comparison.
To put it a different way, all aspects of our strategy are at an international level. We're not here to compete with anyone in Taiwan, but hope to help Taiwan earn a lot of foreign currency. Let me give you an example. Virtually all the tourists who have recently come to Taiwan have specifically stated they want to visit the Living Mall. So our customers are not only the local population, which makes us different from other malls. In particular, there are a lot of individual travelers from mainland China and Hong Kong, and every day we have several business groups coming to have a look. This is something Taiwan can be proud of.
Q: How have revenues been since the opening? What proportion do you expect each of the four major sources of revenue to account for in the future?
A: From our trial opening on November 23rd to the present, it would be fair to say that revenues have been nothing much. The number of visitors has been triple our expectations, but revenues have only been about 60% of expectations. However, I'm sorry but I cannot reveal the exact figures.
Of course, we're just getting started. Large crowds do not necessarily mean high sales, because visitors have not adapted yet to the combination globe-and-L-shaped shopping structure. When they do, they will be able to quickly find the products they need. We are still analyzing the shortcomings, and there is a lot of room for improvement. It's just that right now we are running ourselves ragged to pass the safety and fire inspections, so we don't have the time to think about other things.
You asked about the proportion of revenues from the "four big centers." Of course the shopping center will account for the highest percentage, as much as 90% in the initial phase. However, to tell you the truth, I am least interested in the shopping side. I think that as long as the atmosphere in the shopping area is sound, then people will naturally buy things. I believe that in the future the percentage of revenues from the "integration of the virtual and the real" and from the "integrated services center" will be greater and greater.
The real goal of the Living Mall is not money, but to create an entirely new business model, the first of its kind in the world. We hope one day we will have the chance to restructure and run Western and Japanese malls, so that young people in Taiwan no longer feel that things from other countries are always better, and to let young people see that even old unpolished guys like me can do something that is number one in the world. These young people are all better educated than me, so what excuse have they got to underestimate themselves?
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Sheen Ching-jing, chairman of the Core Pacific Group, who was rebellious as a child, has now built the kingdom of his childhood dreams, the Core Pacific City "Living Mall," which surprises shoppers at every turn. (photo by Hsueh Chi-kuang)
