The Indian retail sector is seeing a lot of action as new malls across the country become ready for possession, even as the first-generation malls get ready with their report cards. With big brands in apparel, multiplex movie theatres, hypermarket and restaurants, becoming an integral part of malls, these New Age bazaar hubs have revolutionized retailing and led to a significant increase in consumption and spending.
Developers are coming up with new projects in Tier II and Tier III cities like Raheja Developers’ Raheja Mall on Sohna Road and Raheja Highway Arcade in Dharuhera, SVP Group’s Opulent in Ghaziabad, Supertech’s Pentagon at State Infrastructure & Industrial Development Corporation of Uttarakhand Ltd (Sidcul), Haridwar, and Metropolis in Rudrapur, and malls by Amrapali, Unitech and DLF in new areas, will completely overshadow the previous hotspots.
In Delhi and the NCR, malls serve up culture curry and have become big players on the cultural scene. Malls like Great India Place in Noida, Cross River Mall in Karkardooma, V3S in Laxmi Nagar (East Delhi), EDM and Pacific Mall in Ghaziabad, SRS Mall in Faridabad and DT City Centre in Gurgaon, among several others, promote fresh brands and celebrate a host of Indian festivals.
Anil Sharma, the chairman and managing director of Amrapali Group, says: “India has been rated as the most attractive emerging retail market in the world for the third time in succession. The unique business models of retail giants are offering innovative features like heavy discounts and abundant supply under one roof. Malls are becoming attractive to traditional retailers as well, who do not want to miss the bus. Several malls in a locality would offer fierce competition to each other before they can galvanize the volumes, which are sufficient for everyone. Mumbai, Delhi, Bangalore and Pune are leading the way for the Indian retail growth.”
Lalit Agarwal, the managing director of V Mart Retail Ltd, says: “Intrinsically, malls have an advantage where they cannot fall into commoditization, as they have unique brand image, identity and location. So, they stand a better chance of surviving the challenge of attracting footfalls, solely on their marketing mix.”
Size of malls
Vijay Jindal, the managing director of SVP Group, says: “The size of a mall should be relevant to the size of the catchments area and the purchasing capacity of the customers there. The location of a mall is the primary concern for a developer and so, several property developers end up focusing on and getting clustered around a few roads or corridors in a city. This is due to the catchment of the key residential areas; in addition to that, each successive project tends to cash in on the footfalls of the already established malls in the area.” Amit Chillar, director of Landmark Group, says: “Mall developers have created bigger malls at locations where a smaller structure would have been more appropriate. If the size of the mall is very big, the developer has to persuade an equally large number of retailers to rent or buy retail space. This requires greater marketing effort, and hence amounts to higher investment and risk without a guarantee of returns.”
Clustering of malls
Navin M Raheja, the managing director of Raheja Group, says: “In Gurgaon, clustering of a large number of malls can be seen in a relatively small geographical area - on the Mehrauli Gurgaon road - to make matters worse, over 20 new malls are operational, which have to squeeze the limited catchment of customers, putting the viability of these malls into question. So, the best bet in such a situation is that a developer must focus on the USP of the mall. Lack of differentiating features in a project can lead to loss of business, low customer interest and low percentage of sales.”
Brand and builder — Demand-supply gap
R K Arora, the chairman and managing director of Supertech, says: “The number of large-scale organized retailers do not match the exponential growth of malls, clearly showing the demand and supply gap. This means that if a retailer is not doing well, a developer cannot replace it with a better one. The choice of anchor retailers in the country is limited, which includes hypermarkets like Big Bazaar, Giant, Food Bazaar; department stores like Shoppers’ Stop, Pantaloon, Westside, Ebony, Lifestyle, multiplex players like Fame, Inox, Adlabs, PVR, IMAX, Wave Cinemas, and E-City Entertainment, etc.
Rakesh Yadav, the managing director of Antriksh Builder, says: “Even though malls and other retail formats take time to evolve into profit making centres, the role of developers after the delivery seems to fade away. That is because the developer’s qualitative contribution towards the growth of business on the shop floors becomes minimal and tends to subordinate into offering facilities and property management services apart from occasional promotions. But with role of marketing and malls evolving as brands, real estate and retail are becoming inextricable. In this scenario, it is worthwhile for any developer to look at malls as ‘revenue generating models’ for his clients and tenants, and as brands with a unique equity.”
Sumit Bansal, the joint managing director of Innovative Infra Developers, says: “One should keep the neighbouring infrastructure in mind while coming up with large projects. When the consumers are moving from their traditional shopping for the
comfort levels of shopping in a mall, these infrastructural hurdles bring negative experience to the consumers.”
It has been observed that developers overlook infrastructure constraints. Some of the most important things like public transportation, electricity and water supply capacity depending on the FSI, parking capacity, etc, are more often than not ignored. Some examples are malls in Saket, a place with narrow lanes and not ready to take that extra burden of mall traffic.
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