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Apr, 01 2005

MALLS REDEFINED

IN a short span of five years, developing initially from New Delhi and Gurgaon to other metros, mini metros and cities, the mall concept in India has taken off at a brisk pace. Though the US is largely responsible for the development of mall culture, the

IN a short span of five years, developing initially from New Delhi and Gurgaon to other metros, mini metros and cities, the mall concept in India has taken off at a brisk pace. Though the US is largely responsible for the development of mall culture, the concept has spread and has been objectively received globally, with India also adapting to this idea.

Retailing in India is witness to the boom in terms of modern retailing formats, shopping malls, etc. The future of retailing for any product across the country, will definitely be in malls where the consumer can get variety, quality and ambience.

Indians are basically family-oriented, thus this biggest shopping segment must ensure that they attract their consumer base and retain them effectively by understanding their psychology. Although people have accepted shopping malls in our country, yet the feasibility of a mall and making them more consumer-friendly will depend upon its catchment area, footfalls, anchor tenants and the right type of entertainment and entertainment options. Also, what will matter is converting the footfalls thereby helping in the recovery of investment.

With an estimated 230 malls in an area of 400 lakh sq.ft. coming up by the year 2006, the concept of malls are now growing into specialised categories. The year 2005-06 could well be called the ‘Era of Mall Revolution’ in India when the malls are estimated to grow ten-fold.

Concept Malls and its variations

In India, shopping at malls has become quite acceptable. In order to make shopping more targeted, developers and builders are diversifying into concept or speciality malls that caters to one category of retail product or services for the needs of the Indian public.

Concept malls that display only one product through a number of its retail outlets within its premises in one particular area will give rise to some of the following factors:

  • There will be competition among the various retail brands.
  • World class practices will help lower costs.
  • Consumers will have the advantage of choice within the location without having to travel around markets.
  • Retailers will shift to revenue sharing pacts.
  • Rentals will crash due to over supply.

A concept mall will connect to the customer predominantly through the value proposition. These malls will also tend to score over general content malls in terms of catchment area. As the catchment for general malls will be just about 5 km, for the speciality malls it will be well beyond 10 km. These malls don’t just save time for the consumer with various brands positioned under one roof but also reinforce competition, which will finally benefit the consumer. Concept malls are expected to usher in a more organised environment by clearly demarcating products and service offerings, and making shopping a more pleasant experience for the consumer.

With competition building up, mall developers may have to reposition themselves as speciality malls, local malls, regional malls or discount malls. In this article we shall discuss about some of the speciality malls in the categories of jewellery, wedding, automobiles, electronic, mother, interior and exterior, NRI and discount.

Jewellery Mall

Jewellery shopping, today, is seen more as a tedious task rather than a pleasurable shopping experience. Lack of basic facilities, parking problems, moving from one showroom to another for more variety, unhygienic conditions and no decent restaurants to take a break, are just some of the problems that are faced by consumers today.

Gurgaon-located Gold Souk is India’s first speciality mall in this category. The concept of Gold Souk was conceived with the objective of bringing a revolution in this highly fragmented industry. Promoted by Aerens Group, Gold Souk was launched in October, 2004, and will be followed by nine similar souks across the country as per Mr Surinder Gupta, chairman, Gold Souk.

The shell-shaped, four-storeyed mall is being developed in over 1.8 lakh sq.ft. area at the cost of Rs 40 crore. By bringing the jewellers under one roof, the souk aims to encourage the Indian consumers, NRIs and foreign tourist to spend more on jewellery. Designed to look like a pearl emerging out of an oyster, the souk has all facilities in place for the gold shoppers. “On weekdays we get an average of 1,000 consumers, and on weekends around 1,500 to 2,000 with an average conversion rate of about 50 per cent,” says Mr Gupta.

The mall has a full floor devoted to branded jewellery. Food court, children’s play area, executive lounge, florist, beauty salon are some of the facilities available at the state-of-the-art mall.

Talking about the response from the retailers on leasing out of the mall space, Mr Gupta says, “Most of the jewellers prefer purchasing the outlet, but some of the progressive ones have leased it out. The trend to lease property rather than buying is definitely catching on. Our sales and marketing strategy is that of concept selling rather than space selling. For the retailer it means increased business opportunity in terms of client base, more impulse purchase due to the choice available and value addition to the clients.”

Aerens Group’s next project is in Ludhiana, the commercial capital of Punjab, where it is strategically located on the main GT Road towards Jalandhar, 15 minutes from the city centre. Gold Souk will showcase the best of Indian and international jewellery, watches and high value lifestyle accessories. “We have already signed-up with a number of leading jewellers,” confides Mr Gupta. The mall will be open to the public in 2007.

Another similar mall set to add to Mumbai’s glitter by 2006, is the Gold County being developed in Santacruz by Mumbai-based Neelkanth Group. Spread over 1.4 lakh sq.ft. and built at a cost of Rs 40 crore, Gold County will have five levels for shops and two levels for parking. The smallest shop will be of 200 sq.ft. Neelkanth plans to sell as well as lease out the retail spaces.

The Andhra Pradesh government is setting up Gems Park in Hyderabad, through a joint-venture between Andhra Pradesh State Trading Corporation Ltd. and IOI Corporation Berhad, the leading property developers of Malaysia. Built in an area of 2.5 lakh sq.ft. the park is located on Road number 10, Banjara Hills, five minutes drive from all 5 star hotels, and 10 minutes from the airport. The park will have 150 outlets, including that of banks, food courts, entertainment, children’s play area, health club, and exhibition area, and is proposed to have SEZ (Special Economic Zone) facility. The proposed duty free and export zone is targeted to enhance the gems and jewellery exports from AP. The Atrium design is a creation of modern architecture inspired by the splendour of Indian traditions and the exquisite grandeur of the Nizam Jewels, in particular, the Imperial Jacob Diamond and The Peacock Throne Jewel, two of India's most notable jewellery icons.

Wedding Mall

Any festival in India has it’s own share of maddening enthusiasm and passions attached, particularly, if it is a wedding. A one-stop destination for marriage-related shopping and services, where one can splurge without any tension, is certainly welcomed. The wedding mall concept is designed to reduce the hassles of repeated visits to the market.

In order to fill in this category, Omaxe Construction Ltd., a multi-million real estate major, is setting up the first mega mall called Wedding Mall dedicated exclusively to marriage-related shopping. The mall, spread over an area of 1.65 lakh sq.ft. with an investment of Rs 70 crore, has been designed to include spacious showroom spaces.

The mall, expected to be completed within a period of two-and-a-half years, will provide to its customers a complete shopping-cum-entertainment experience with services that are related to pre and post marriage.

“We are also launching the Wedding Mall in Patiala,” informs Mr Rohtas Goel, chairman and managing director, Omaxe, “and its tenant mix will be a judicious assortment of leading international and Indian brands and wedding-related service providers.” A 40 luxury room hotel, food court, speciality restaurants, and a multi-screen cinema surrounded by the Baradari Park and Lake is also featured. Spread over 2.75 lakh sq.ft. and with an investment of Rs 140 crore, the wedding mall is likely to be completed in two-and-a-half years time. Mr Goel adds, “the mall has been so designed that marriages can be arranged, along with all purchases, at a cost of Rs 3 lakh, which is very much within the reach of an average family.”

On the same concept, Aerens Group has also launched Wedding Souk in Ludhiana, on the main G.T. Road. According to Mr Surinder Gupta, “The Wedding Souk will showcase everything that a couple needs.” The souk will also house service providers such as caterers, pundits, florists, mehndi artists, travel agencies etc that are required for a wedding.

Shagun, the wedding mall at 10A Shakespeare Sarani, Kolkata, built in an area of 20,000 sq.ft. on four levels, offers wedding-related products, comfort and an array of choices. A 600 sq.ft. of space is entirely devoted to men’s wedding clothes. “The entire place has been made up and run by us, and each customer is attended to by our own representative individually. We have our own designing team and suppliers to match the taste of the customers,” says Mr Rajiv Kr. Kanodia, director and marketing manager, Elize International Ltd.

The initial investment is pegged at Rs 15 crore, and the promoters are looking at a 5-year pay-back period. Wedding season plays an important role. “The conversion rate goes up to seven out of 10 because most of the customers turn up with preconceived purchase ideas. We do not, at any point of time, compromise on quality and ambience for building up the confidence which actually helps in hiking the conversion ratio,” retorts Mr Kanodia.

Interior and Exterior Mall

The buck does not stop on the wedding themes. If you are looking for a house, enter the home and hearth variety of speciality malls that are being improvised from speciality interior stores.

The Merlin Group is building a 1 lakh sq.ft., five storey mall on Elgin Road, Kolkata, which will be ready by 2006. Homeland, as the mall is called, will have 150 retail outlets offering a range of building and interior décor solutions under one roof. The mall is being targeted at the home-office segment as well as young people, by offering the A to Z in homemaking minus the limitations of street shopping.

Also coming up is Ishanya, a Rs 110-crore project spread over 10 acres with a build-up space of 5 lakh sq.ft. and being developed by Deepak Fertilisers and Petrochemicals Corporation Ltd. (DFPCL). To be ready by December this year, India’s first speciality mall for interiors and exteriors, is set to be a one-stop mall for services for the real estate industry, offering over 50 categories of products and services.

In Faridabad, the RJA group is planning to launch Interiorz, a speciality mall for the décor and other requirements of homes and offices. To be built on six acres of land, with a build-up area of over 7 lakh sq.ft., and at an estimated cost of Rs 350 crore, including the land cost, the project is expected to be completed by December 2006. The company also plans to set up a chain of speciality malls all over the country.

To be opened shortly on 30B Orphanage Road, near Taj Bengal, Kolkata, a one-stop interior project called The Team, is set to offer everything from furniture, flooring and wall treatment to accessories like throws, bedcovers, artificial flowers and even paintings. The three-storey mall is spread over 22,000 sq.ft. and is the first of its kind in Kolkata. A joint venture between Mr Amit Kumar Choudhary and Mr Ajit Kumar Jain, The Team’s USP is customised furniture, treatments and accessories, made by in-house craftsmen and designers. The mall would also offer expert advice by designer Mr Ajit Jain, which will come free for The Team’s privilege members.

Electronic Mall

Call it a smart mart. Electronics, electric and white goods will now be available under one roof. To cash in on the large-scale construction activity in the city, Senior Builders have conceptualised an electronic mall by the name of Senior Circuit City on National Highway 8, Gurgaon. This 5-storey mall is coming up on an area of 4 acres adjoining Signature Towers in the South City with an investment of Rs 150 crore. “The Circuit City will retail everything that falls under the product category, from electric fittings to lighting, all white and brown consumer electronics and electrical goods. The mall will boast of 500 shops and showrooms of Indian and international electronics consumer durables, mobile phones, TVs, VCDs, DVDs, music systems and other home appliances” informs Mr Vijay Dixit, chairman and managing director, Senior Builders.

Auto Mall

For prospective car owners, specialised auto malls are being set up across the country. Coming up along National Highway 8 is Auto Mall, the country’s first auto mall which will be a 10 storey building with a roof-top test drive track. Developed by Senior Builders on an area of 4.5 acres and an investment of Rs 240 crore, the mall will provide everything pertaining to cars, from different makes and models, accessories and spare parts, to auto insurance and finance services, test drive facility, and even registration of the vehicle.

While four floors will be kept exclusive for car displays, half of the floor will house 10 to 15 shops dedicated to car accessories retailers. Besides, four to five banks and car finance companies will also be housed in the mall along side car insurance companies. “Auto Mall, which will be ready by March 2006, is being so designed that people can view 190 to 200 cars on display from outside” says Mr Dixit. A 50,000 sq.ft. hall at the ground floor has been kept aside for car launch and exhibition.

Theme-based Mall

With so many different malls coming up, the need to have something different was felt. Station1, India’s first interactive 5-storey theme-based mall, spread over an area of 1.5 lakh sq.ft. in Faridabad, would be built on the concept of a classic steam engine. Explaining the rationale behind the railway theme, Mr Pankaj Bajaj, managing director, Eldeco Infrastructure & Properties said, “The objective is to introduce children to the romance of railways. Not only the exterior elevation, but the interiors of the mall, are also railway-inspired.”

Besides its engine-like shape, the feature would also let out steam and hoot at regular intervals. The interior of the mall would have a dedicated product display area including an innovative hydraulic lift, moving from one platform to the other. The mall would also have frequent events, promotions and shopping festivals, which would ensure attractions throughout the year.

The interactive shopping mall would also have different segments, namely, kid zone, shopping zone, food court and entertainment section. The kid zone is proposed to have indoor amusement park, cartoon theatre, toy train, play zone, etc. The entertainment section will have features like 3-screen-two level multiplex with exclusive box facility, night clubs, discotheque, etc. The mall proposes to have approximately 250 outlets. “The retailers are confident, and we have already signed up with seven to eight big names and talks are on with more,” informs Mr Bajaj. To cater to the heavy footfalls, the mall would be having two-level basement parking. The mall is expected to be ready for fit-outs within two years. The projected footfalls per day are 7,360 on weekdays and 11,516 on weekends.

Mother Mall

To fulfill the vision of mother, Jai Ganesh Vision has launched a mall called “World of Mother” in an area of 80,000 sq.ft. in a covered industrial shed. The women section in the mall called “Udyogshilp” consists of small units where only women are the unit holders, dealing in cottage industries, artificial goods, kitchen items, tapestry, food products, confectionery, herbal medicines, jewellery designing and crafting, consultancies of all kinds, IT professionals and traditional medicines.

Though anybody can be a customer, but the entrepreneurs are only women. In order to take care of her prime concern, her kids, a creche, kindergarten, play-park and such facilities have been created.

NRI Mall

Omaxe has launched another concept mall project called “The NRI City Centre”, located close to the busy expressway in Greater Noida, offering a shopping experience one usually enjoys in Singapore. “Simply put, we have got the Singapore shopping extravaganza, right here in India,” informs Mr Rohtas Goel, chairman and managing director, Omaxe Construction Ltd. The mega shopping mall aims to duplicate the same experience closer home.

Factory Outlet Mall

Chains, superstores, boutiques and even the lesser-known service providers all are realising good growth today. But the least accounted for segment is the one that caters to most of the middle-class Indian value-seeking consumer’s needs. To fill up this gap is the Discount Mall, which, in Royal Palms, Mumbai, is the first factory outlet mall.

Commenting on the concept, Mr Amir Nansy, chairman, Royal Palms, says, “It is built on the idea of providing brand owners, wholesalers and retailers a much needed common platform to deal with inventory and transactions in huge volumes.” Designed under four distinct segments, the mall allocates three to the brand outlets with each having space designated for food courts, cultural entertainment courts and exhibiting Indian ethnic handicrafts. The fourth segment houses Homemakers, the anchor tenant, which showcases and sells home furnishings from the world over. A factory mall provides the maximum value through the ownership of your own outlet and high footfalls with negligible maintenance cost.

The concept of factory outlet mall came into existence after a through study conducted by Knight Frank Advisory Services India on factory outlets in India. Discount Mall is a perfectly designed package, keeping in mind the sensitive issues of location and overhead costs vital to a factory outlet concept.

The Discount Mall has an antiquity of its own. It is a fairly well establish concept, and basically sells manufacturer closeouts, discounted merchandise, irregulars, surplus stocks and cancelled orders. “We have been receiving a very good response from retailers in terms of number of queries and sound feedback for leasing option. We are receiving on an average of 35 to 45 on weekly basis. The number of footfalls on weekdays ranges from 65 to 70 and on weekends from 100 to 120. The conversion ratio on a weekday is 35 to 45 per cent and 70 to 75 per cent on weekends,” informs Mr Nansy.

Ashok Cosmos2 Mall

Enter the place of the great historic lovers, Shahjahan and Mumtaz. Though not a concept mall, yet, Ashok Cosmos2, still under construction, is important due to its proxomity to the Taj Mahal and the fact that it is the first mall in Agra. This state-of-the-art shopping mall will bring to the affluent travellers and the people of Agra a retail experience of fun and entertainment whilst shopping. "The 100 per cent Vaastu-compliant, 9-storey, twin towers, mall delivers a delightful ambience that binds retail, entertainment, leisure and business," says Dr Ranjana Bansal, managing director, Ashok Group.

With a built-up area of 3.37 lakh sq. ft., the mall has five floors of shopping and four floors for offices, and offers a full view of the Taj Mahal from the fourth floor onwards. Located in the heart of the city at Sanjay Place, the commercial hub of Agra, the mall is projected to have footfalls of 1,200 on weekdays and 1,500 to 2,000 on weekends, informs Ms Bansal.

Annotation

Speciality malls is a success in the west, but their evolution in India is at a very nascent stage. India has been rated as the fifth most attractive emerging market for retailing. Countries that have enjoyed the greatest economic and social progress have been those with a strong and organised retail sector, and India cannot remain outside the league for long.

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