The Rise of the Mall Class: a commentary on the Filipino middle class

I accidentally stumbled into this weekend’s mall wide sale in the Ayala Center. I just hit the gym and decided to buy some stuff in the Japanese grocery, and bang! Mall wide sale.

(stock photo from the-protagonist)

I had a quick look around. I have what I call this Tower/Power run which brings me to the following places in this order: Power Books Glorietta, Tower Records Glorietta, Fully Booked Glorietta, Power Books Greenbelt and finally Music One Greenbelt. By the end of that run, I usually get to buy everything I need (or don’t need). And by the end of that run, I manage to cover Ayala Center from end to end (I start at either Slimmer’s World or the Glorietta 4 theaters).

I observed that it took me longer to do the run today because of the sheer number of people around. I often take forty minutes to an hour for the run (including browsing and the occasional coffee stop), but I clocked in at two hours today. Simply, there are just more people on a Sunday, but even more on a Sale Day. Well, okay. I also took my time.

But this isn’t just a musing about numbers and crowds. I asked myself a question as I walked around, “Where did all these people come from?” This is my answer.

What we are looking at is what I call the “mall class” which is to some degree equivalent to what we have in the standard lexicon, the middle class. Economically, they are the people with enough disposable income to spare in a Sunday afternoon. Socially, these are the people with vast social networks (ie. they meet up with friends in the mall). And politically, these are the people who are smart enough to think about the government — that they don’t need it but the don’t have any choice but to accept them either, for now. (This is the conclusion I get from eavesdropping — accidentally or otherwise — in queues, counters or restaurants.) After all, the government does not tell them which brand of jeans to buy, or which food they should have for lunch — it’s all their own choice.

As I passed a sporting goods store, I opined that the mall class are people without ‘crutches’. They are self-deterministic. They can choose their hobbies. They can choose their careers. They can choose their lifestyle. They can choose which movie to watch; they can choose what time to watch. They can choose which coffee house to frequent; which yearly planner to win.

And in the span of one afternoon walking through the mall, they’re offered credit cards, housing loans, printers, car loans, pets, cereals, dibidis, steaks, TVs, coupons — everything they can choose to need or want is at their disposal. It all depends really on the size of their job, the size of their family, ergo, the size of their wallet. We live in a world where everything is supersized, low caloried, multi-tasked, bonus featured, and director’s cut — everything waiting to be consumed by a hungry mall class.

The mall class epitomizes the people in the Philippines with the power of choice. The mall class doesn’t have to depend on politicos or other sponsors for their sustenance. If they can spend enough money while malling on the weekends, they’re good for the rest of the week.

But of course, this all depends on which mall you go to and I’ve been almost everywhere.

My high school friends and I frequented Ever Gotesco Commonwealth back in the day, but we never stayed there. It was just our halfway point to a friend’s house where we had more to do (such as school projects) and better tasting food to enjoy.

The most provincial and localized mall I’ve ever been to was the NE mall when I visited Cabanatuan City a year and a half ago. (NE stands for Nueva Ecija.) It was rather sparse and had this ‘mom and pop’ feel, but I got all I needed — a hefty dinner and a battery for my car’s alarm controller that just gave up on me. It was cool that they had a Kodak store.

I used to frequent this comic store in Robinson’s Manila, until a closer and cheaper store opened up in Magallanes (Druid’s Keep). The last time I’ve been there was about four years ago when some college classmates and I cut a seminar in the PICC. We didn’t have anything to eat there but Robinson’s had a food court. And an arcade.

And just this morning, my family and I were at Market! Market! after having breakfast at The Fort. (Seated at the table right across us was JV Ejercito. I was busy reading “The Audacity of Hope” by Barack Obama. Figure out the irony there.)

(stock photo from the-protagonist)

I find Market! Market! an interesting mall since, for me, it represents what malls in the Philippines should be. Located in the general area of Taguig, the mall caters to the lower to mid income brackets of society. Most Ayala and Ortigas malls alienate most of the masses, while those large but no name malls farther away from Manila hold no allure to the high end crowd.

Market! Market! is able to cater to both. If income brackets can be simplified to five letters — A, B, C, D, E — Market! Market! is at least able to cater to the B, C and D crowd. (Those in the E bracket just don’t have the disposal income to spend.) This mall is a unique model because — if you’ve noticed if you’ve ever visited — the mall has a tiangge (flea market) alongside the boutiques. So while this mall can offer amenities to the three crowds, it also opens up business opportunities to them.

If you wish to put up a business but can’t afford a franchise, then there’s always the tiangge option. And if you’re trying out a new product and you wish to have your own boutiques eventually, start with a tiangge. For better or for worse, our economy is a tiangge economy due to the simple fact that the Cs, Ds and Es far outnumber the As and Bs.

There are two sides to this. The bad news is that thus far, the retailers are not competitive in their products in terms of creativity, function and value. It’s all the same balisong, palda, plantsa and kropek. The good news is that our markets are dynamic and flowing. It is in the Filipino psyche to find good deals, bargains and invest in quality products. (It also helps if you know who’s selling the item to you.) Thus, this is a gold mine which future entrepreneurs, scientists and innovators can potentially mine.

Therefore, I see much opportunity in the mall class.

While I admit that there can be no single, monolithic class — and I am sure I can eventually get to profile the different subclasses of the mall class — they all epitomize the Filipino with the power of choice. In a capitalist society, people also vote with their money. Thus it must be noted that the poorer consumers have less choices compared to those who can be loyal to brands and subject to fads. While their income gap is huge, they meet at one point — with some money to spend, they are all able to seize opportunity, albeit in slightly varying degrees.

These are the insights I arrived at this afternoon.

That this class of people hungry for opportunity is growing. We can see this everywhere of course, but none more apparent than in spending one afternoon in the mall. Call our country as mired by corruption or petty politics, but one thing it cannot be is a country that gets poorer every year. (Doesn’t mean we get more equal though; our population grows with it.)

With this cursory glimpse into what I call the mall class, I arrived at several hypotheses which I will test in the future:

1. People are spending more money but not more people get to earn money or work in the first place. The mall class can help the lowest income earners to their feet by allowing them to participate as entrepreneurs in the market. However, they will need the necessary capital to get them started. In my opinion, microfinance is the answer. Where we get this is up for grabs, though I am eyeing the private sector. Government would be nice, but I won’t expect much at this point.
2. The rise of the mall class is fueled by our exchange with other countries, whether it be in goods and capital and more importantly, people. Exposure to more liberal habits and lifestyles has transformed us into a more consumerist culture, which in turn creates this mall class.
3. Just because the mall class has the ability to seize business opportunities doesn’t mean they will. There is a mismatch between how much people are willing to spend versus how much they are willing to create. What the Philippines still lacks — and badly needs — is a creative class. Stating them in parallel with the mall class, the creative class creates their own opportunity. The creative class includes your scientists, artists (with taste), writers, directors, innovators, entrepreneurs, and change artists. Key to the formation of this creative class is education, first and foremost, and incentive enough for them to create something original.
4. The mall class and the creative class have to be bridged. As I’ve pointed out in this post, there is a mismatch between how much we earn from the services sector versus the amount of jobs we have in it. Therefore, we must push locally made, branded and patented Filipino products but we can only do this if we innovate to be globally competitive. This is where government enters the picture: they must shore up research and development, encourage patents and inventions, and enhance education services. While these pursuits can be pursued by the private sector — albeit disparately, I imagine — it falls on the shoulders of government to lead the country in this direction.

For now, I conclude that we have a mall class with money they’re willing to spend. This presents an opportunity for a new creative class to take advantage of but the problem is they don’t have the incentives and ample means to do so.

Whether the creative class will burgeon together with the mall class can be easily answered by this question actually: Are the Filipino consumers ready to patronize Filipino products?

The answer to that is clear but bears heavier implications on our economics and culture. But, let’s take things step by step. The solution, I believe, is in one of the points I enumerated above. It’s all about value for money really, and value is something we must create.

The rise of the mall class is a testimony to the health of the Philippine economy. However, it is a rise that must be managed by government and paralleled by innovation, research and development. People have observed and commented that we are a country with too many malls. In the end, let it be not just that.