Fashion
The runaway success of augmented reality game Pokemon Go can be a potential game changer in the local retail scene.
UOBKayHian said in a report that the game could also be seen as a revenue booster for retail real estate investment trusts (REITs) and modestly positive for food and beverage (F&B)/convenience store retailers and cellular companies.
“Pokemon Go creates higher footfall in malls. Although turnover revenue accounts for less than 10% of retail REITs’ revenue, sustained higher footfall leads to better rental reversion.
The research house said Sunway REIT has reportedly experienced a double-digit hike in average footfall at its malls.
“Car count has increased by 10%. Similarly, Suria KLCC and Pavilion have also garnered attraction from Pokemon Go ‘hunters’.
UOBKayHian said F&B retailers like Starbucks, OldTown and other F&B retail chains surveyed saw minimal impact with sales being consistent before and after Pokemon Go’s launch.
“Nevertheless the higher footfall in the malls and shoplots could eventually translate into higher sales for the F&B retailers.”
As for convenience stores, the research house said KK Supermart, which operates a chain of 223 convenience stores in shoplots, had reportedly seen a surge in footfall, with the sales of some store shooting up by up to 20%.
“Approximately one-third of both 7-Eleven and Bison’s stores are located in the malls. The higher footfall in the malls may translate into higher sales for these convenience stores.
“However, we note from these companies that at this juncture, impact on earnings is minimal.”
UOBKayHian said it was “potentially marginally positive” on the telecommunications sector on higher data usage and pre-paid reloads.
It pointed out that Pokemon Go had hastened the adoption of smart phones, currently accounting for around 30% of global mobile phones.
“The game could hasten global conversion to smart phones, which benefits Malaysian electrical and electronics component suppliers like Inari. Among the potential beneficiaries, our top pick is Sunway REIT.”
The research house noted that public response to Pokemon Go, which was released on Aug 6, has been overwhelming in Malaysia.
Pokemon Go, which is by far the highest revenue grossing game in history, can provide at least a short-term lift to various Malaysian companies.
“Although widely seen as a fad, this game’s shelf life could well exceed common expectations; 90% of players who downloaded the app continue to play after its launch,” according to a media report.
