Malls in India
The Retail sector in India is dominated by small and unorganised entrepreneurs consisting of standalone stores, boutiques and local grocery stores, is radically changing its face.
There has been a massive development of new retail formats such as malls, hypermarkets, supermarkets and lifestyle stores. The organized sector represents a mere 2 per cent share of this market. It is very low as compared to other developed economies of the world. However, as the spending power in the economy is growing fast, this development has gained importance not only in the metropolitan cities but also in the Tier II and III towns. These upcoming formats are giving consumers a lot to spend on, especially with existing players such as Pantaloons, Shopper‘s Stop and the Tata and RPG Group Scaling up fast and the new players such as Birla’s and Sunil Mittal investing a lot in the retail market. With this transition taking place, the shopping behavior of consumers is likely to change as these formats were not in existence in the country until recently.
What is a (Shopping) mall?
“A shopping mall (or simply mall), shopping center, or shopping arcade is a building or set of buildings that contain stores, and has interconnecting walkways enabling visitors to easily walk from store to store. The walkways may or may not be enclosed.”
It provides shopping as well as entertainment options to the target consumers. It generally, contains one anchor store, which consumes twenty five percent of its retail space. In addition a mall contains specialty stores for clothes, accessories, home needs, books, as well as food court, multiplexes and entertainment zones.
What is the concept of mall?
The concept of Retail as entertainment came to India with the advent of malls. The mall fever has touched every facet of the Indian society. Whatever is the income stratum of consumers, malls make no distinction in offering the most-revered national and global brands. Malls are incorporated with a whole bank of lifts and escalators for smooth transit of shoppers. They are located in proximity to urban outskirts, and ranges from 60,000 sq. ft. to 70,000 sq. ft. The future of organized retailing is largely in the hands of mall where the shoppers get quality, quantity, aspirational appeal, recreation facilities and ambience. Under one roof, the flashy malls promises just about everything under the sun, from foreign gizmos to the very desi, virtually an airbus full of national and international brands, to say the least. Malls offer a plethora of attractions- high profile shopping, impulse eating establishment, a glitzy and glamorous environment to discerning shoppers of more refined tastes, who are more concerned with quality and fashion and less concerned with budgets. Mall reveals six factors namely comfort diversity, luxury, mall essence, entertainment, and convenience which are a source of cynosure. In India, malls have transformed shopping from a need driven activity to a leisure time entertainment.
Statistics about Indian Malls:
There is a paradigm shift in the mall scenario, from just 3 malls in the year 2000; the country witnessed 220 malls in the year 2006. In most of traditional Indian malls, around 30 percent of space is allocated to apparel retailers while 12-20 percent space is dedicated to Food and Beverages. Indian malls is somewhere between 35,000 sq. ft. to 10, 00,000 sq. ft. The largest malls in Indian metropolitan cities enjoy 25,000 footfalls per day which hikes to an average of 40,000 on weekends. In India, North Zone is having the peak attractiveness with 39 percent while South, East, and West Zone respectively holds 18 percent, 10 percent, 33 percent of total malls pie.
SWOT Analysis of Indian malls.
||Skyscrapers with perfect blend of shopping, eating and entertainment, in short “shoppertainment”
||Mall developers are enacting as mall managers. Retail not accredited as an industry in India
Complicated taxation system
||Developed in contemporary style, these flashy malls promises just about everything under the sun, from foreign gizmos to the very desi brands.
||Lack of adequate infrastructure including supply chain, parking facilities.
||Attractive destinations for civic and official meetings, hang out, reducing stress.
||Unavailability and skyrocketing prices of prime catchment‘s areas.
||Procure goods directly from factories and farmers in case of lifestyle and food/beverages respectively.
||Poor positioning and zoning of malls.
||Bouquet of value propositions like value for time, value for quality, value for experience, value for money.
||Shortage of qualified human personnel in the area of facility management, creative firms, and design houses.
||High quality shopping environment quality assortment at variant shopping format.
||Lack of differentiated offerings i.e. same mix of shopping, foods and films.
||Tier II and Tier III cities are still untapped
||Non availability of adequate finance
||Growing urbanization and increase in purchasing power of consumers
||Undeveloped Supply Chain
||Outsourcing from other developed retail market
||Vigorous competition from unorganized retailers Keeping up brand loyalty
||Progressive growth of apparitional consumer class.
||Disturbance in income strata of consumers greatly influence malls growth
||Believing more in spending than savings , as most of the population is youth (with median age 24 and 35 percent of population below 14 years)
||Threat from online players, (even though internet penetration is low in India.
Types of Malls:
The malls basically are classified on the basis of their Merchandise orientation means types or Goods and Services sold and their size.
- Regional Malls: It is a Shopping Mall which is designed to service a larger area than a conventional Shopping Mall. It is typically larger than 400,000 square feet to 800,000 square feet gross leasable area with at least two anchors and offers a wider selection of stores.
- Super regional malls: This is a mall which is almost similar to a regional mall, but it is larger in size than a regional mall. It has more anchor stores, a deeper selection of Merchandise and draws from a larger population base. A super regional mall is a Shopping Mall with over 800,000 square feet (74000 2 m ) of gross leasable area and which serves as the dominant Shopping venue for the region in which it is located.
- Outlet malls: An outlet mall or outlet center is a type of shopping mall in which manufacturers sell their products directly to the public through their own stores. The other stores in outlet malls are operated by retailers selling returned goods and discontinued products often at heavily reduced price. In India these outlet stores are not shopping malls, they are called generally called as factory outlet shops because they generally call general products directly offered by the company.
- Vertical Malls: Vertical Malls are the malls typically multistory building. The vertical mall is common due to the high land price in densely populated and the higher yield on retail property.
- Lifestyle Centers: Lifestyle Center is new designated that has a loose definition. Generally, it‘s a center that does not have on anchor tenant in the classic sense that is, department store. Lifestyle centers have a cinema as a major tenant.
- Strip Mall: Strip mall also called Shopping Plaza or Mini mall. It is an open area shopping center where the stores are arranged in a row with a sidewalk in front. Strip malls are typically developed as a unit and have large parking lots in front. They face major traffic arterials and tend to be self-contained with few pedestrian connections to surrounding neighborhoods.
- Luxury Malls: Luxury Mall is mall which only house luxury brands. The mall in India luxury malls have been planned to be built soon, most of the tenants are expected to be the best brands in the world such as France‘s Louis Witton, Greece Dunhill Fendi Mont Benc, Van Clef and Arpels Rolex and Omega.
Mall Management: Five phases of Mall functions
- Mall Ideation– This is the first stage in the mall functions. It is an ideation stage where the retailer‘s builder will select the following real estate (on the basis of a locational analysis and catchment area analysis), the target group mall format mall positioning, branding etc.
- Mall Construction- Mall construction is a very crucial phase in this phase. For this the retailer needs to understand construction then he himself will be able to construct the mall. But by any chance if he is not well versed then he would go for outsourcing. In India these days‘ malls are going for international look and are outsourcing the architecture to international players. The complete mall construction will take two to four years.
- Mall Marketing- Once the mall is constructed and ready for operation, the owner has to aggressively market the mall and search for tenants. For this a separate marketing department is required to be floated for this purpose. At this stage negotiations on rentals/lease periods and contracts or even ownership of the store would be finalized. To popularize the mall there should be publicity drives for this various trade promotions need to be used.
- Mall Operation- The mall is finally ready for the operation and the day it is launched it would be marked as a big event. It would indulge in aggressive public relations activities, marketing activities, events management etc. There also is special events like DJ wars fashion shows, dance and songs shows, etc. This entire activity is conducted to increase footfalls and result in more conversions. High footfalls can be achieved through cross branding with the existing stores/brands in the mall or even brands that do not have a presence in a mall.
- Mall Maintenance- This is also known as housekeeping. It is usually outsourced. It includes cleaning the floors, keeping the washrooms clean, providing drinking water facilities, operating security systems for surveillance. It also includes maintenance of escalators and lifts electrical systems, physical security, the surroundings of the mall and parking facilities.
Effect of Mall culture in India
The mall boom in India began with Cross roads which was constructed in 1991 and was owned by Nichlos Piramal Pharmaceuticals. It is located near Haji Ali, Mumbai and is spread across 1, 50,000 square feet. The mall was a culmination of two offices which were:
- The office of Nicholas Piramal
- The office of a famous MNC pharmaceutical brand
Reasons for growth of malls in India
- Fast growing middle class with higher discretionary income.
- Emergence of youth as an independent shopper with a lot of disposal income.
- Ruggedness of Indian shoppers for a new shopping experience.
- Ability of Mall developers to make shopping an enjoyable experience.
- Presence of factors like cost effectiveness, convenience wide variety of products with the fun element entertainment and good time pass plus shopping on weekends.
- Influence of media and marketing communication resulting in changing aspirations, lifestyle orientation and change in consumer perceptions about shopping.
However with the subsequent revival of the boom period, growth of organized retail and consumption is expected to take a higher trajectory. Consumers presently conditioned into sparing behavior will eventually unleash their pent-up demand for preferred brands. So the present phase can be favorably construed as an opportunity for the retail industry to realign its operational structure, study consumer behavior and build consumer-centric strategies. On a greater platform, a mall leaves an indelible impression on its immediate catchment area and further. Apart from changing the physical skyline, it has a spill-over effect to the human web associated with the mall. Consumers change their consumption patterns, their lifestyle activities and inculcate the mall-culture – which provides further growth opportunities for the fledgling retail industry. Also the importance of the retail industry as a job and wealth creator cannot be undermined. This leads to a process where one generates the other and is simultaneously transformed, paving the way for the socio-economic revolution to gain greater ground in India
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