PHNOM PENH -- Five, sometimes six, days a week Mao Sophorn brings her 1-year-old daughter to Aeon Mall 2.
"People come here to hang out, relax and to feel fancy," said Sophorn on a recent Thursday afternoon, as her daughter sat on her knee and her two young nephews, clad in Spiderman t-shirts, played in a trolley.
The kids, she says, demand to come. The mall, Japanese developer Aeon's second in Cambodia, offers more than just its 100-plus shops, restaurants and cafes. Spread over 86,000 sq. meters, its attractions include carnival rides, an aquarium, a TV studio, and an indoor soccer field.
"If the new malls have an interesting set-up like this," Sophorn added, "I'm sure people will come."
And that's the multi-million dollar question: with the Cambodian capital experiencing a shopping mall boom, will shoppers come -- and in large enough numbers -- to support a raft of new projects in the pipeline.
Six years since Japan's Aeon launched what is widely considered the country's first modern mall in 2014, the city of 2.1 million has added more than a dozen malls, retail podiums and shopping centers.
In that time, total retail space has more than doubled to some 340,000 sq. meters of net leasable area across 23 malls, according to real estate consultancy Knight Frank. And several more major projects are slated to open in the coming years.
The main driver of the boom, say experts, is that local developers are responding to Aeon's bullish approach by pursuing their own projects in an attempt to establish their own brands early in the game.
Aeon wants to dominate. Opened two years ago with a price tag of $120 million, Aeon 2 -- officially known as Aeon Sen Sok City -- is the Japanese retail giant's biggest mall in the region. Outside Japan, there is only one larger Aeon complex, in China.
Its third project in Phnom Penh, slated for 2023, will be even bigger. Aeon's aggressive strategy of "capturing overwhelming market share" is laid out in company reports, which detail a regional expansion plan to reduce reliance on domestic sales.
The company aims to increase its operating income from 62 billion yen in 2019 to 100 billion yen by 2025. Of this target, it wants overseas business to comprise 35% -- up from 12% last year.
Cambodia housing developers, meanwhile, have moved to start their own retail projects, often as additions to gated community developments known as "boreys".
Within kilometers of the 170,000 sq. meter site of Aeon 3 -- which will be built by Hyundai Engineering -- Cambodian borey developer Peng Huoth Group is building two malls. In the same area, local construction conglomerate Chip Mong is working on its own "271 Mega Mall," which at some 160,000 square meters, will rival the new Aeon in size.
"We think there's going to be quite a significant oversupply," said Ross Wheble, Country Head for Knight Frank Cambodia. "Occupancy rates will go down, I think landlords are going to start to offer quite big incentives on rent."
By the end of 2022, total retail stock could shoot up to some 830,000 sq. meters, Knight Frank predicts. Of future supply, 84% will be "prime grade" and mostly within major retail malls.
The figures are predicated on all of the projects monitored by the real estate consultancy being finished and open on schedule -- a scenario thrown into some doubt as the coronavirus slams the country's economy.
In its Q1 report, real estate consultancy CBRE Cambodia said overall retail footfall and sales had "plummeted" due to coronavirus concerns. The crisis has impacted stores' expansion plans and seen retail rental rates drop by around 10%.
"[The pandemic] has probably delayed some openings of shops and decisions being made by retailers to expand," said CBRE senior director James Hodge. "We're starting to see signs of market activity picking up, which is good."
In addition to coronavirus woes, another problem will exacerbate the coming glut: the fragility of Cambodia's emerging middle class.
Developers face building projects in an increasingly overcrowded small market where shoppers lack the purchasing power to attract major retail tenants.
Hodge said new openings from international retail brands had been driven 80% by the food and beverage sector. However major fashion retailers, at this stage, remain uninterested in the country.
"Until we see a wider consumer base that's got the resources to purchase fashion items from the likes of Zara, H&M [and] Uniqlo, we won't see people like that come into the market," Hodge said.
"A lot of those brands have entered the Vietnamese market in the last three to five years. Many people would say that Phnom Penh is 10 years behind the Vietnamese market. In fact, I don't think it's that far and we're catching up quite quickly."
After repositioning away from a tenant mix too focused on mid-range to high-end customers -- which had resulted in high tenant turnover -- Aeon saw its operating revenue at its first property increase 19% between 2015 and 2018.
At Aeon 2, meanwhile, customer traffic exceeded 13 million people in its first 12 months.
But with the volume of retail space set to rapidly increase, experts predict the gap between supply and demand to only widen.
"We have a situation where people saw a gap in the market, many developers have started constructing shopping malls, so there's an oversupply and then the demand gap needs to catch up with it," said Wheble.
"So it will at some point, it's just a question of how long, when that will happen and do they have enough capital to be able to subsidize it in the meantime, which I think the big housing developers do."
How long such a lag lasts remains to be seen. Phnom Penh's retail space per capita is already on par with Hanoi and Ho Chi Minh, according to 2018 figures from Knight Frank. However, its GPA per capita is about 40% less.
The real estate consultancy conducted a survey of shoppers, which found 57% of respondents fell into a "low income" category defined as a personal gross salary of $100-$500 per month. Just 8% of those surveyed were considered as middle income status, earning $500-$3,000 per month, and a mere 7% belonged to the upper income bracket.
Average consumer spending per visit was $18, with 77% of those surveyed spending less than $30. The main purpose of their visits was eating out, followed by entertainment.
Such is the case for 30-year-old Hang Piseth, who visits the mall a few times a month, usually for lunch or dinner.
Sitting at The Asian Kitchen, an offshoot of a Singaporean restaurant company on Aeon 2's second level, the dental clinic manager estimated he would usually spend between $20 and $30 on food, groceries or a ticket to see a movie. But for bigger purchases, malls like Aeon 2 were too steep, he said.
"Maybe for high class people with bigger incomes they can buy the good brands," said Piseth. "But there are not so many people like that."