MUMBAI // There is little activity at the Atria Mall in Mumbai. Some of the shops have closed down, much of the retail space lies vacant, and few stores are open.
The mall boasts a Rolls- Royce showroom, and Nike and Levi’s shops, but not even those names are drawing customers on this Friday afternoon.
Shailesh Jain, who manages Joolry, a designer jewellery store in the mall, says that days go by when he does not get a single customer coming into his shop.
“Visitors to the mall are like pin drops,” he says, explaining that he relies on online sales and loyal clientele for business. “It was very happening when it opened a few years ago and it was the only mall in south Mumbai. Slowly all the brands have left the mall. Why would customers come here? There is no movie theatre, no food court.”
A short distance away, another mall, High Street Phoenix, is bustling. Queues are forming outside its multiplex cinema, the restaurants are busy, and shoppers are clutching bags full of merchandise.
India has experienced a boom in mall development over the past decade. And although some are thriving, many languish.
The key, it seems, is design.
“India is going through a learning curve,” says Susil Dungarwal, the founder and chief mall mechanic of Beyond Squarefeet Advisory, which provides mall advisory services in the country.
“The design or the concept element is lacking in most of the malls. Many developers in India don’t understand the mall business.”
Overall, he says, “It’s a mix between some malls being very, very successful, some doing not so well, and some really struggling”.
More precisely, about 15 per cent of malls in India are doing well, while 40 per cent are “doing OK” and the remainder are struggling, with some shutting down completely, he says.
Anuj Puri, the chairman and country head of JLL India, says that to succeed in India, a mall needs to offer more than just shops.
“For Indians, malls are more than just shopping destinations – they are getaways from the humdrum and constraints of their day-to-day life, and mall developers have been catering to this dynamic by creating shopping complexes that offer retail, entertainment and dine-out option under a single roof,” Mr Puri says.
“Experiential retail is the holy mantra of the Indian shopper, and in the years to come, every mall across the country will do everything it can to turn the whole shopping experience into an entertainment experience.”
One mall that seems to be getting it right is Phoenix Marketcity, which opened four years ago in Pune, about 150 kilometres south-east of Mumbai.
The mall has posted 28 per cent growth in terms of visitor spending in the first 10 months of this financial year, which runs to the end of March, compared to the same period in previous years, according to Rajiv Malla, the centre director for the property. It gets 2.5 million visitors a month.
Events such as music and stand-up comedy acts also help to attract visitors to the Phoenix Marketcity, he explains.
“It’s a one-stop shop,” he says. “It’s not only shopping.”
The mall has some 300 retail outlets, plus a multiplex cinema and a range of food and beverage options.
The design emphasises the trendiest shops. Phoenix Marketcity has strategically placed its international brands, which include Marks & Spencer, Zara, Mango, and the British clothing brand Superdry on the ground floor.
“All those other brands, you will see some of them on high streets anyway,” says Mr Malla. “So what would really attract customers to come again and again was these new brands which were not available anywhere else in the city.”
The mall retail supply in India’s top seven cities – namely Mumbai, New Delhi, Bangalore, Chennai, Hyderabad, Kolkata and Pune – is expected to rise from 76 million square feet in 2013 to 95.7 million sq ft in 2015, according to JLL, continuing the rapid development of malls from a low base over the past decade.
There is huge potential in India’s retail space for those malls that get it right.
Retail spending across the top seven cities is expected to more than double over the next five years to 7.65 trillion rupees (Dh452.6 billion), according to a report released on Monday by Knight Frank India and the Retailers Association of India.
“This gives an immense opportunity for the retail sector to adopt a higher growth trajectory,” says Samantak Das, the chief economist and director of research at Knight Frank India. “With the middle class group becoming significantly large, coupled with the exposure of Indian consumers to global retail markets, will together fuel demand for sophisticated products and better customer services. As a consequence, the retail shop formats in India have changed over the years, from non-modern mom and pop stores to modern structures in shopping streets and malls.”
Aditya Sachdeva, the director of retail at Knight Frank India, says there is an additional requirement of 4.3 million sq ft of retail space per year across the top seven cities.
“We need more retail real estate to come up,” Mr Sachdeva said. “Even though e-commerce will excel in the country, retailers will always require additional footprint to increase business turnovers. There still exists a significant number of reputed retailers who believe in the latent strengths of the brick and mortar retailing methods and going forward will continue to invest in this segment.”
The Abu Dhabi-based retail group Lulu has used expertise gained from designing and developing malls in the Middle East to build a popular property in India.
Lulu, headed by the non-resident Indian (NRI) M A Yousuf Ali, in 2013 opened a 16bn rupees mall in Kochi, Kerala, which has been performing well, its management says. (Lulu’s retail ventures in India come under its company registered locally in the country, funded from India, and are therefore not subject to restrictions on foreign investment.)
The Kochi mall, which houses more than 220 brands, a multiplex, and vast food court, was launched with a projected average daily footfall of 35,000, according to Shibu Philips, the business head of the mall.
The mall’s performance, he said, “has far exceeded our expectations with an average non-peak season daily footfall of around 45,000 on weekdays and 70,000 on weekends.
“As far as the sales are concerned, we have been recording steady growth. Last month, we recorded a growth rate of 38 per cent in the total sales done in the mall as compared to the month of December. When we launched, all these features were mainly aimed at the Kerala audience. But over the past two years, we have noticed that several people from the neighbouring states, NRIs and other tourists are visiting us too.”
The Lulu spokesman, V Nandakumar, says the group is “keenly pursuing new projects, both within Kerala and elsewhere”.
Work on a Lulu mall in Kozhi-kode, also in Kerala, has already started, he said.
Lulu in December announced plans to invest 25bn rupees in projects in the southern state of Telangana, including a shopping mall.
Mr Nandakumar said that other Indian cities on the group’s radar include Thiruvananthapuram, Bangalore and Chennai.
Even for malls that have succeeded, the struggle is to keep people coming back week after week as trends change.
“Fortunately for us it has been very positive,” says Mr Malla in Pune. “Of course we have to keep innovating and doing new things to keep attracting the customer back to us.”
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