How has the sector evolved over the last few years and what role has Real Plaza played in the sector?
The retail sector has been growing at a greater rate than the overall economy. We have been active in going to different regions in Peru outside of Lima. The first shopping mall we opened outside of Lima was in Chiclayo. We have worked in cities of 200,000 people or more, such as Trujillo, Arequipa, and even cities where there was no formal retail at all. The question there was how people would buy and use modern retail when they had been used to just going to traditional markets. We perceived a latent demand there, and we decided it was a good move. We did not just start with a big shopping mall in Juliaca (Puno Region), but rather we did it in phases. We had a complete master plan and grew through a process, which has proved successful. We started with supermarkets and have added entertainment, fashion, and other phases as demand develops and business grows. We were the first to sell cappuccinos in the region when we opened a Starbucks in Huancayo. People were open to it, they responded to it, and it all worked out well. It is younger consumers who responded best to the changes that we brought.
What sort of innovations are you bringing to the sector with the high standard of shopping malls that you are introducing throughout Peru?
We have introduced the first escalators in some cities. We brought cappuccinos and Starbucks to places that never before had that. We have modern malls offering modern experiences to people who were only used to shopping in traditional markets. Automation, tellers, and technologies—all of these come with our shopping malls. Therefore, there is a great deal of innovation touching these people's everyday lives throughout the country. In Huancayo in the Central Andes, there are many people and a lot of traffic; however, it is still an undeveloped place. We opened a mall and a supermarket there, and there were huge lines of people trying to get in. The supermarket did great, but we then saw some decline, which we thought was normal. However, a study that we conducted through our marketing and research department showed that the standard throughout the city had changed, as had the standard in the traditional market. The old market was cleaner, more organized, and generally better; therefore, our entry changed standards throughout the city. In line with that, people started demanding better services as well. We have had a positive effect on these places, and people now expect international standards in their daily lives; we are proud to be a part of this change.
What would you say are Peru's advantages to international investors looking to invest in the retail sector?
Peru has been growing by leaps and bounds over the last 10 years. Few countries have grown as rapidly as Peru; therefore, it is an ideal place to invest. The country is huge, the population is large, and the potential is massive. We are in constant contact with all of our malls and with our partners and clients around the world. We are members of the International Council of Shopping Centers (ICSC), which has a major network and holds seminars around the world. We organize events and we bring brands here to let them see the potential that there is in Peru. We are not so interested in luxury brands, but rather in more horizontal brands. We pick our brands carefully, and we target brands that can grow with us around the country.
What is your strategy for expansion and growth in Peru?
We work fast and we go to regions where there is potential to grow or where there is demand for a modern shopping experience as well as modern entertainment, modern cinemas, and so on. We are present in 12 cities outside of Lima, and we were the first shopping mall in 10 of them. We have been proactive and aggressive in that sense, and we have been ready to take risks when and where we believed we would be successful, which is a strategy that has worked well for us. Lima, of course, is a much more difficult market to penetrate, with more competition, more players, expensive real estate, and a generally saturated market. Shopping malls require a lot of space, which is hard to find in Lima; therefore, we focused instead on the other regions, and we are looking to consolidate and then expand these malls.
Shopping malls have generated 32,000 new jobs in Peru and changed retail and shopping habits throughout the country. How has Real Plaza contributed in this sense?
When we open a shopping mall we usually create about 2,500-3,000 new jobs, which counts only the stores and does not take into consideration the mall staff. This is usually how many people work in a shopping mall; it like a small town, meaning the contribution is huge. Our presence in the regions of Peru tends to formalize the market. Everyone who was working in the informal economy is brought into the formal economy, and they are treated and paid well, which also translates into more taxes for the country. Hence, the impact has been positive in this sense. Those people who work there get a better standard of living, their children go to better schools, and they eat and live better.