Retail Mall Mgmt

8/12/2019 Retail Mall Mgmt

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I. The Overview

1. Introduction

2. Impact of Industrialization and Innovation to Life

3. The rise of Retail

4. Spontaneous Case Study

5. Role of traditional6. Traditional R formats

7. The foot fall story

8. New age Retail formats

9. Understanding stand alone

10. The Franchise Models

II. The Present Day Scenario

11. R-mall The 20/ 21 century phenomena

12. The existing models

13. Mall layouts and Dynamics

14. Adv of R malls

15. Leisure shopping entertainment

16. Amusement partying , lounging

17. Roles of FDI in Indian Context

III. Disciplines in Retail and RMM

18. Store Layout and Location

19. CRM

20. SCM

21. Merchandise Management

22. Customer Service23. Understanding the Life Time Value of a Customer

IV. The Socio-Cultural-Economic impact

24. Employment generation

25. Demographic Shifts

26. Fueling Growth of infrastructure

27. Creating support and Ancillary inds

28. Shift in business district

29. Fuelling Inflation

30. Consumerism

V. The Work Life Environment

31. The social cultural impact

32. The future careers

33. Rise of the self employed and free lancers

34. Choking of cities

35. Difficulty and high cost of travel


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36. Malls as viable Biz info entertainment leisure hubs

VI. Planning the Business of Malls

37. The viability studies

38. Why some have failed

39. The Biz plan40. The marketing Plan

41. The Brand plan

42. The Progression

43. Refurbishment And Revival

44. Life Ahead- Workplaces Retreats Residences malls

VII. The Future of Retail - Possibilities

45. The future business

46. Malls to parks

47. Parks to townships

48. The life around the mall Hubs


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Retail in India - The Past, Present and Future

Before the decade of eighties, India with hundreds of towns and cities was a nation striving for

development. The evolution was being witnessed at various levels and the people of India were

learning to play different roles as businessmen and consumers.

Retail-which literally means to put on the market, is a very important aspect of every city.

Without a well organized retail industry we would not have our necessities and luxuries fulfilled.

Be it our daily groceries or fashion accessories and everything in between, retail industry brings

us the blissful experience of shopping. Though organized retailing industry began much earlier

in the developed nations, India had not actively participated. However with its vast expanse and

young population, India in the 21st century emerges as a highly potential retail market. The

journey of retailing in India has been riveting and the future promises further growth. Here is a

complete picture deciphering the past, present and future trends of Indian Retail Market.

Retail in India - PastBefore the decade of eighties, India with hundreds of towns and cities was a nation striving for

development. The evolution was being witnessed at various levels and the people of the nation

were learning to play different roles as businessmen and consumers. The foundation for a

strong economy were being laid, youth were beckoning new awareness in all spheres. And this

brought in an opportunity for retail industry to flourish. First in the metros and major cities later to

impact sub urban and rural market as well.

Retailing in India at this stage was completely unorganized and it thrived as separate entities

operated by small and medium entrepreneurs in their own territories. There was lack of

international exposure and only a few Indian companies explored the retail platform on a larger

scale. From overseas only companies like Levi's, Pepe, Marks and Spencer etc. had enteredtargeting upper middle and rich classes of Indians. However as more than 50 % population was

formed by lower and lower middle class people, the market was not completely captured. This

was later realized by brands like Big Bazaar and Pantaloons who made their products and

services accessible to all classes of people and today the success of these brands proves the

potential of Indian retail market.

A great shift that ushered in the Indian Retail Revolution was the eruption of Malls across all

regional markets. Now at its peak, the mall culture actually brought in the organized format for

Retailing in India which was absent earlier. Though malls were also initially planned for the

higher strata, they successfully adapted to cater to the larger population of India. And it nowonder, today Malls are changing the way common Indians have their shopping experience.

However there is still great scope for enhancing Indian mall culture as other than ambience and

branding many other aspects of Retail Service remains to be developed on international

standards.


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To your surprise there was not a single mall in India a decade before and just a few years ago

only a handful of them were striving, today there are more than 50 malls across different cities

and 2 years from now around 500 malls are predicted to come up.

Indeed this shows a very promising trend ahead, however before taking a leap into the future of

Retail in India, let's see what the Indian retail Industry is currently occupied with.

Retail in India - Present

At present the Retail industry in India is accelerating. Though India is still not at an equal pace

with other Asian counterparts, Indian is geared to become a major player in the Retail Market.

The fact that most of the developed nations are saturated and the developing ones still not

prepared, India secures a great position in the international market. Also with a highly diverse

demography, India provides immense scope for companies brining in different products

targeting different consumers.

According to the Global Retail Development Index, India is positioned as the foremost

destination for Retail investment and business development. The factor that is presently playinga significant role here is the fact that a large section of Indian population is in the age group of

20-34 with a considerably high purchasing power; this has caused the increase in the demand

in the urban market resulting in consistent growth in the Retail business.

And though the metros and other tier 1 cities continue to sustain Retail growth, the buzz has

now shifted from these great cities to lesser known ones. As the spending power is no longer

limited to metros, every tier 2 city in the country has good market for almost every product or

service. Due to this, tier 2 cities like Chandigarh, Coimbatore, Pune, Kolkatta, Ahmedabad,

Baroda, Hyderabad, Cochin, Nagpur, Indore, Trivandrum etc. provide a good platform for a

brand to enter Indian market.

However there are a few precautions for every brand that explores Indian market. As Indian

consumers are very curious and have a broad perspective, they respond well to a new product

or concept and there are very fair chances of a brand surviving well, but every Indian consumer

be it an urbanite or a small town dweller needs a feeling of value for money. Although labeled as

tight fisted, Indian consumers are great spenders once they realize that they are getting value

for their money. Also new product /service concepts from the western world are better adopted

first by the urban Indians, the smaller markets respond well to the need based retailing rather

than luxury concepts. As the Indian retailing is getting more and more organized various retail

formats are emerging to capture the potential of the market.

Mega Malls

Multiplexes

Large and small supermarkets

Hypermarkets

Departmental stores are a few formats which flourishing in the both big and small

regional markets


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As the major cities have made the present retail scenario pleasant, the future of the Indian

Retailing industry lies in the rural regions. Catering to these consumers will bring tremendous

business to brands from every sector. However as the market expands companies entering

India will have to be more cautious with their strategic plans. To tap into the psyche of

consumers with different likes and dislikes and differing budgets a company has to be well

prepared and highly flexible with their product and services. In this regard focusing ondeveloping each market separately can save a brand from many troubles.

Retail in India - The Future

According to a study the size of the Indian Retail market is currently estimated at Rs. 704 crores

which accounts for a meager 3 % of the total retail market. As the market becomes more and

more organized the Indian retail industry will gain greater worth. The Retail sector in the small

towns and cities will increase by 50 to 60 % pertaining to easy and inexpensive availability of

land and demand among consumers.

Growth in India Real estate sector is also complementing the Retail sector and thus it becomes

a strong feature for the future trend. Over a period of next 4 years there will be a retail space

demand of 40 million sq. ft. However with growing real estate sector space constraint will not be

there to meet this demand. The growth in the retail sector is also caused by the development of

retail specific properties like malls and multiplexes.

According to a report, from the year 2003 to 2008 the retail sales are growing at a rate of 8.3%

per annum. With this the organized retail which currently has only 3% of the total market share

will acquire 15-20 % of the market share by the year 2010.

Factors that are playing a role in fuelling the bright future of the Indian Retail are as follows:

The income of an average Indian is increasing and thus there is a proportional increase

in the purchasing power.

The infrastructure is improving greatly in all regions is benefiting the market.

Indian economy and its policies are also becoming more and more liberal making way

for a wide range of companies to enter Indian market.

Indian population has learnt to become a good consumer and all national and

international brands are benefiting with this new awareness.

Another great factor is the internet revolution, which is allowing foreign brands to

understand Indian consumers and influence them before entering the market. Due to the

reach of media in the remotest of the markets, consumers are now aware of the global

products and it helps brands to build themselves faster in a new region

However despite these factors contributing to the growth of Indian retail Industry, there are a

few challenges that the industry faces which need to be dealt with in order to realize the

complete scope of growth in Indian market.


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Foreign direct investment is not allowed in retail sector, which can be a concern for many

brands. But Franchise agreements circumvent this problem. Along with this regulations and

local laws and real estate purchase restrictions bring up challenges. Other than this lack of

integrated supply chain and management and lack of trained workforce and flux of the market in

terms of price and product choice also need to be eliminated.

Despite these challenges many international brands are thriving in the Indian market by finding

solutions around these challenges. A company that plans to enter Indian market at this time can

definitely look forward to great business if it analyzes and puts efforts on all parameters.

And with Good Planning, Timely Implementation and a media campaign that touches Indian

consumers any brand can go far ahead in the Indian Retail Revolution.

Is India's love affair with shopping malls over?If 120 new malls have come up in the last two years, 40 have downed shutters. Some

lessons from the experiences of dying malls

It was supposed to be a fancy sea-facingmallboasting high-endbrandsand an unmatched shopping experience. Itturned into a nightmare for the owner, Bhumiraj Group, when brands started pulling out of Full Stop Mall on Palm

Beach Road, the Marine Drive of Navi Mumbai

A similar fate awaited Gold City Mall in Navi Mumbai's premier Vashi area; it is now an office complex teeming withpeople who bear no resemblance to the inveterate mall hopper

In Delhi, Star City Mall in Mayur Vihar had hoped to capitalise on the rush of people who would walk in and out of thebustling metro station nearby. That was not to be and the management decided to lease the place out to corporates

to set up their offices and to some banquet hall owners to rent it out for weddings and other functions

These are just a few examples of malls that have either shut shop or tweaked their original glitzy plans

faced with poor footfalls, low brand pull and sheer mismanagement. Numbers tell the extent of trouble.

Roughly 250-300 malls came up in the country over the last two years but 70-80 per cent of the spaces in

these malls lie vacant. Around the same time, as many as 40 malls have shut shop, according to Square

feet Advisory, amall managementcompany.

The economic slowdown has landed especially heavily on the old-line department stores that anchor

many malls. As their sales and profits have tanked, they've been pulling out of malls, much to the distress

of the smaller merchants who depend on the larger stores to feed them traffic. These trends are hitting

the market capitalisations of most of the largest owners of retailreal estate.Of course, the slowdown was

the catalyst, but competition from online retailers has been the continued driver.

Cushman and Wakefield estimates only 50 per cent of the scheduled malls came up in the top eight cities

of India in 2012. And only 250 new ones are being planned in the next two years, while there is space for

at least 2,000 malls. A clear marker for shopping centre distress.
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To start on the right foot

Fail-proof the business plan:Focus on the development of retail brands and not solely on quick returns on

investment; The primary responsibility should be that of catering to theconsumercatchment and driving footfalls f

the retail occupants. The other requirements follow from this simple premise

Do a thorough recce of the catchment: Ask questions like can the catchment support the development in terms consumer footfall and spending? Is there a connect between the needs of the immediate catchment and the

occupants of the mall? Are there too many malls in the catchment area?

Offer good occupant mix:You cannot have mall occupants who have little relevance for the target consumer. Yo

cannot have the same type of retailer; this would cannibalise rather than provide a healthy mix

Ensure good access:Accessibility and connectivity to get the traffic smoothly in and out of the mall is a must;

ensure there is adequate parking space

Avoid under sizing:Most malls should be spread over 80,000 sq ft space or more. A small-sized is a straight

handicap because it will lack variety, which is de rigueur in the business, and you run the risk of getting dwarfed

by the next big mall that throws its hat into the ring

Focus on design:This involves making the mall brands visible, ensuring appropriate zoning in terms of

entertainment, multiplexes, kids areas, food courts etc. This will result in better customer flow management

DEVANGSHU DUTT

Chief executive, Third Eyesig

Is India's love affair with the mall over? Experts say this is not the end of the road but a time for

introspection. Most malls go through cycles just like the economy: New malls get popular, then traffic

begins to die down, then the mall enters a lull phase where anchor stores are leaving/being replaced or

the mall simply closes altogether. Also, for many Indians, especially people under 20, the mall is their firstexperience with organised commercial activity, their first brush with fashion and entertainment, the first

place they get their concept of style.

In short, this would be the time to draw lessons from the experiences of mall owners who have been

forced to change the script.

Study the catchment area

The first generation malls in India were flagged off in the mid-nineties without much research or

understanding of the market, say analysts. As crowds began to throng to these places, many others

simply replicated the idea without a clear view of what works in the business and what doesn't. The slice-

and-sell-AC-shops-within-a-big-box approach didn't work simply because it lacked planning and

management and made no provision for demands emerging in the future.

It may come as a surprise but "this is an industry driven by real estate, not retailing", says a consultant.

The experience in India, in fact, has been similar to the US market in the early years of mall development

as documented by Paco Underhill in his 2004 book The Call of the Mall: A Walking Tour through the

Crossroads of Our Shopping Culture. As he points out, the industrial appearance of the mall and its box-

like stores do not express the attempts of retailers to attract customers, but the efforts of developers to

squeeze the maximum profit from a construction project. While some of the smarter developers quickly
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altered the recipe and came back from the brink of disaster, there were others that became a case study

of sorts on how not to run the business.

Against this background, the biggest lesson, so to speak, has been that the mall business is like any

other business. And like any other business, a thorough understanding of the consumer is the first and

the most basic requirement for the business. Says Rajat Wahi, partner, KPMG India, "It is very important

to look at the consumer and shopper profiles of the catchment areas before renting space to brands."

This was a lesson that Delhi's Select City Walk, one of the most successful malls in the country, kept in

mind while starting out. Spread over 1.3 million sq ft, which also include landscaped open spaces, the

mall was designed keeping in mind the affluent female consumer used to shopping in premier South Delhi

markets. The product mix was designed to offer quintessential Indian boutique brands such as Good

Earth, Fab India etc alongside international labels such as Zara, Mango, Tommy hilfiger.

Mind you, it is as much about the brands as it is about the ambience in the mall. "You want to have a mall

where the shopping experience is enhanced and people want to keep coming back," says Wahi. Some

new mall owners are creating "zones" (read, multiplexes, food courts, kids' play area) to meet the

changing needs of the shoppers and upgrading services like access, parking (in terms of even lanesleading up to the malls), security, providing prams for children etc, going as far as to organise regular

events around celebrity visits, shopping festivals, flea market fiestas etc to ensure footfalls and consumer

involvement. The amenities draw the consumer in for reasons other than to just purchase items.

Here's how Crossroads, which was acquired by retail czar Kishore Biyani from the Piramal Group of

Industries for a staggering $66 million, made the transition. The Mumbai-based mall started floundering

when the building's poor design - which allowed consumers to have a dekko at the mall's signature brand

Pyramid but didn't allow them to notice other brands that were housed there too - made things difficult for

a majority of the brands housed therein.

Given the high tenant turnover, customer loyalty began dwindling.

Rechristened Sobo Central, not only was the mall's floor layout changed to offer all brands better visibility,

there was also been more emphasis on putting together the right mix of food, fun and shopping

experience.

Speaking of design, at Delhi's Select City Walk, the layout is such that at a quick glance, the consumer

can easily read the labels/logos of 12-15 brands.

Be open to change

The shift to a revenue share model has also proved to be a win-win for brands and mall owners. Take

DLF, which moved to a revenue sharing model when many of its branded malls started faltering. The

group initially gave out space on a first-come-first-serve basis besides offering shops to those whopromised higher rentals.

This essentially meant there was no thought given to the brand mix. What made it worse was that DLF

allowed many investors to buy the shops and rent them out later. The result: no sense of ownership and

low overall accountability from brands. This proved a thorny issue at the time of discussions regarding

renovation or even during promotional activities.


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What went wrong

The initial euphoria of developing shopping centres has faded from the time retailers started insisting on revenue

share and minimum guarantee rather than the pure rent model. With the new scenario, retailers ability to pay is

limited by their sales. As a result, they offer rentals that they can afford, and mall developer often begin to evaluate

other asset categories like offices and residential, since offices provide fixed rentals and residential comes with the

inbuilt advantage of up-front cash neither of which are available in the mall format.Such a scenario can lead to a mall closing down as a retail establishment and reinventing itself into another forma

In the case of older centres many of them were created without adequate planning or preparation, were not in t

right location, or did not have the right size or tenant mix. Following are the lessons worth learning:

Ensure that you have the right size, format and tenant mix for a particular catchment

Provide adequate parking

Do not strata sell spaces

Provide professional mall management

Malls must, over a period of time, evolve their tenant mix and offerings so that sales and therefore rentals

continue to grow. In the event that a catchment does not sustain the development or there is too much completion,

retailers will choose the dominant mall.

When a shopping centre is not the preferred one for retailers, value retailers come inwhen even value retailers

cannot sustain, it is usually because of a combination of reasons. These could be: bad location, bad design, lack o

adequate parking, lack of professional mall management (often the result of strata selling spaces) and a malls

inability to find alternate usages of space.

Anuj P

Chairman & country head, Jones Lang LaSalle Ind

An altered revenue share approach, says Pushpa Bector, vice-president, mall head and senior vice-

president, leasing, DLF's Mall of India, has allowed DLF to take a long-term view into mall management

(that includes positioning, zoning, tenant mix, facility and finance management, promotions and

marketing) and genuinely look into - and support - all the brands present in the malls with interesting

promotions that can drive footfalls. The effort has helped: DLF Promenade has a footfall of 1 millioncustomers per month and round-the-clock operations and better management have ensured higher

loyalty among consumers.

Some malls have taken the scope of mall management one step ahead - they track performance of

brands, collecting data on per sq ft sales, the sales of a brand and other parameters. This helps them run

a diagnostics check on the brands under the roof and figure out whether the brand is using space

optimally or there is need for rationalisation. In the bargain, malls have improved yields as new brands

have come in at higher revenue share deals and existing ones have delivered better performance within

smaller spaces.

Looking at the kind of damage poor planning brings in its wake, other malls are making sure the customer

has the right brands and packaging. Inorbit Mall, which began its innings in Mumbai's Malad area in 2004,

carefully took into account the catchment and decided to focus on five anchor tenants (Shoppers Stop,

Lifestyle, Spencers, Fame, and Time Zone). The management routinely studies the performance of retail

brands, engages with customers to gather feedback and proactively looks out for promising brands that

can be a part of the property.

The demand for space in malls like Select City Walk in Delhi or Inorbit Mall or High Street Phoenix in

Mumbai is so high now that it has had to right size the stores of existing brands or relocate some within


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the premises to accommodate new ones. Select City Walk, for instance, has cut down the Levi's store

from 2,700 sq ft to 800 sq ft to accommodate Superdry and Dune Shoes. Next London has shed about

1,000 sq ft of flab, helping the mall welcome Apple.

Will all this be enough to bring the shoppers back to the deserted malls? Mall managers do have a lot on

their plates already. Few new malls are being built, and just too many are being 'repurposed'. Because of

their location, keeping in mind the spiralling real estate costs, malls are not accessible to an increasingly

elderly population; technology products are taking larger bites out of customers' wallets as opposed to the

traditional fare malls have to offer; online shopping has grown by leaps and bounds; and more and more

women have less and less time to shop.

While teenagers and young adults will continue to patronise the mall as an 'affinity centres,' to borrow a

phrase from Underhill, most real estate professionals understand more profound changes are afoot.

FDI in retail to force developers into mallmanagement: expertsMany international brands eyeing India after govt decided to allow FDI in multi-brand

retail last year

Malldeveloperswill now be compelled to hire mall management services, especially when global brands

are looking at India after the government clearedFDIinretail,experts say.

"There is already an increasing competition from the existing and new generation shopping centres. But

today, with the new FDI policy, there will be an increase in demand from the global players for malls that

will meet international standards and norms," Jones Lang LaSalle Chairman and Country Head Anuj Purisaid.

After the government decided to allow FDI inmulti-brandretail last year, many international brands are

eyeing India. According to a recent report by CBRE, as many as 13 international players entered the New

Delhi market last year.

"Till recently, mall management was limited to facility management. However, mall owners are now

realising that their core competence is in building assets and not operations," Pioneer Property Zone

Director Ian Watt said.

"When foreign brands are looking at partnering with mall developers, they will look out for those who will

meet their standards. Therefore, developers will have to adopt speciality services like mall management

to attract the international retailers. The FDI policy will actually be agame changerin the coming years."

Besides, the evolving preference of brands, including domestic as well as international, to partner with the

malls having a good management platform will also compel developers to consider mall management.

"Mall management has become an essential part of business because malls are no longer shopping

destinations but are also evolving as hangout places. So they will force the developers to create an
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atmosphere that will not only be a place to buy things but would also be a hangout destination," L&T

Realty Head- Retail Leasing and Marketing JP Biswas said.

However, the concept of mall management in India at present is at a very nascent stage, Watt said.

Mall management includes positioning, zoning, tenant mix, facility and finance management, promotions

and marketing.

Jones Lang LaSalle, CBRE, Beyond Square feet and Pinoneer Property Zone are some of the

companies, which are in the business of mall management.

Retail Shopping Malls: - FSI can deliver a single shop to a 150000 Square Meters supermall for its customers. Sustainability being the focus along with the Return on Investment, FSI can

design & deliver a service unique to any retail real estate scheme or project. We represent property

owners in the most significant leasing transactions occurring in major commercial markets in and

around India. Our team has specialized expertise in developing and executing customized leasingplans to efficiently and effectively reach client goals. Enriched with local market knowledge, our team

develops property-specific leasing plan designed to maximize benefits and value for clients. Our

professionals make learned recommendations based on existing market conditions, historical trends,

competition and as well as the future evolution of retail markets.

With our rich experience & in-depth expertise, FSI can accommodate single store to multi-store

chains, large-scale projects and varied retail portfolios spread over all of Indian Sub continent. We

work hand in hand with our clients and ensure that our reports deliver all that the client needs in

order to make accurate & efficient decisions in the ever-changing retail market in India.

FSI identifies major competition within selected cities and target zones putting forward trade mix,positioning, and performance analysis for use in planning, strategy and projections. By combining

FSIs themarket knowledge, experience, and extensive consumer, interactions to define current &

future supply & demand, FSI can provide crucial knowledge of the local and regional retail markets

in and across India. FSI will ensure that the customers project rece ives the maximum exposure to

the market.


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Malls must move beyond shopping

to survive in Internet era

(Reuters) - As growing numbers of shoppers move online, European mall owners are looking to pull

in customers by including services that can't be replicated on the Web like hospital care and

government offices.

Malls must become more like full-service community centers to survive in the face of a growing list of

failed retailers like HMV and Blockbuster, property experts at the annual MIPIM trade fair in Cannes,

France, told Reuters.

On the flip side of that retail revolution, the experts see big gains in warehousing as more goods are

sent and returned via post.

"The days of the stand-alone mall are numbered," said David Roberts, the chief executive of

architect Aedas, one of the five largest practices in the world. The company has been involved in city

masterplan projects in Asia, Europe and the Middle East.

"In 20 years time you will find stores that sell books and DVDs replaced by sites that give people a

reason to go the mall ... art galleries, education centers and health and spa treatments."

Florencio Beccar, fund manager of CBRE Global Investors European shopping centre fund, cited the

recent purchase of a mall inGermany,saying the fact it included a large medical centre was "a big

plus".

"I once saw a clinic in a Brazilian mall where you checked in and are buzzed on a device when they

are ready. In the meantime you go shopping," he said. "With the ageing population in Europe you

can see that happening more and more."

CBRE Investors, which has about 14 billion euros ($18.2 billion) of retail property under

management in Europe and 5,000 tenants, also owns a mall in southern Sweden with a library and a

local municipal office, he said.

"More shopping centre developers will have early talks with these sorts of tenants as well as the biganchor retailers," Beccar said.

Mall owners like Land Securities, Intu, Westfield and Klepierre have increased the number of

restaurants and cinemas to persuade shoppers to stay longer, and offer promotions to reward

frequent shoppers who can be tracked via their mobile phones.
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COMMUNITY CENTRES, ADVENTURE PARKS

But these steps don't go far enough, some experts say, in light of a forecast last month that 90

percent of retail sales growth in Britain, France and Germany between 2012 and 2016, or 91.5 billion

euros, is expected to be online, according to the property arm of French insurer AXA, which

manages 43 billion euros of assets.

As well as changing what's inside, mall owners will need to borrow ideas from developing markets

like Dubai andChinawhere centers are part of wider mixed-use developments where people live or

include open spaces where they spend leisure time, Roberts said.

"Convenience and Internet shopping has created a breakdown in community structures and there's a

gap there waiting to be filled," he said.

"There is a complete lack of vision among many shopping centre owners," said Joe Valente, a

managing director at JP Morgan Asset Management, who helps manage 7 billion euros of realestate in Europe.

"The big thing that's missing is that unlike almost every other industry they haven't caught on to

building their own brand. Why not have a bluewater.com?" he said, referring to the large mall of the

same name in southeast England.

"Landlords fear cannibalizing sales but in 10 to 15 years they won't have a choice because they will

be cannibalized anyway," he said. In other words, a growing number of shoppers will move online

whatever malls do. "On a mall website you could book a parking space, a restaurant table or your

car to be evaluated. Why do people go to Covent Garden?" he asked of the central London district.

"There's nothing there you won't find anywhere else but I would argue it's a strong brand."

Christian Ulbrich, chief executive for Europe, Middle East and Africa at property consultant Jones

Lang LaSalle, said: "Stores will get bigger and become more like adventure parks that attack all of

your emotions.

"For example, Globetrotter has a climbing wall and cycle track in its Frankfurt store to try out its

products," he said of the German outdoor clothing and equipment retailer.

WAREHOUSING: - While retailers and mall owners struggle to find answers, all agree thatwarehouse property owners are the big beneficiaries of the change in retail habits.

Every additional 1 billion euros of online sales resulted in an average additional warehouse demand

of approximately 72,000 square meters in Britain, Germany and France over the last five years, a

report from warehouse landlord Prologis said last year.
http://www.reuters.com/places/chinahttp://www.reuters.com/places/chinahttp://www.reuters.com/places/chinahttp://www.reuters.com/places/china


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"Logistics is the new retail," said Simon Hope, global head of capital markets at property consultant

Savills, referring to the way changing consumer trends will affect the way investors see property.

"There is a trend of money moving away from all but the best and most regionally dominant malls

into logistics as they are economically shielded," he said.

The fact that the Norwegian and Chinese sovereign wealth funds have recently invested in the

sector, as well as a report that Brookfield, lower Manhattan's largest office landlord, is trying to do

the same, shows serious bets are being made on logistics property, Hope said.

Yields for high quality logistics property can be six or seven percent versus four or five percent for

top shopping centers.

As another example of how retailers may re-think their operations, some are likely to club together to

operate out of smaller logistics sites close to city centers to enable same-day deliveries, a service

increasingly in demand, Ulbrich said.

"The issue they all face is that shopping is no longer enough of a reason to go to shopping centers."

Foreign direct investment(FDI) occurs

when an investor based in one country

(the home country) acquires an asset in

another country ( the host country) with

the intent to manage the asset.

PROS of FDI

It reduces the gap between farm prices and retail prices. Gives best management practices from all over the world.

It makes market intelligent and also provides good understanding and practical

knowledge to be domestic retailers.

To achieve expected growth in India GDP: India is targeting for its GDP to grow

by 8 to10 percent per year. This requires raising the rate of investment as well as

generating demand for the increased goods and services produced.


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Provide an aid to Indian agriculture to become lowest cost source of farm

produce.

To bring trade balance and to increase liquidity by the way of foreign exchange

reserves.

The status of the human resources in a country is also instrumental in attracting

direct investment from overseas.

Countries like China that have taken an active interest in increasing the quality

of their workers and have made compulsory for every Chinese citizen to receive

at least nine ears of education. This has helped in enhancing the standards of

the laborers in China.

If a particular country has plenty of natural resources it always finds investors

willing to put their money in them. A good example would be Saudi Arabia and

other oil rich countries that have had overseas companies investing in them in

order to tap the unlimited oil resources at their disposal.

Infrastructure is very important for FDI. So if a country keens to have overseas

investors they have to focus on infrastructure.

INCREASE INVESTMENT LEVEL AND THEREBY INCOME & EMPLOYMENT

INCREASE TAX REVENUE OF GOVERNMENT

FACILITATES TRANSFER OF TECHNOLOGY

ENCOURAGE MANAGERIAL REVOLUTION THROUGH PROFESSIONAL

MANAGEMENT

INCREASE EXPORTS AND REDUCE IMPORT REQUIREMENTS

INCREASE COMPETITION AND BREAK DOMESTIC MONOPOLIES

IMPROVES QUALITY AND REDUCES COST OF INPUTS.

CONS of FDI

Threats on organized and unorganized retail players.

Replacement of established national brands by the brands of the retail gains.

For e.g. Wal-Mart is committed to buying the best goods at the cheapest prices

to give its customers the best value for money. That is why it sources so heavily

from China. 70% of merchandise in Wal-Mart contains components made in

China. Even though Wal-mart may not continue heavy operations in china but

would continue heavy sourcing from china market to cater to the world markets at

lower prices. Low prices of Chinese products can easily convince Indian price

consciousness mentality. Acceptance towards Chinese brands can create a

direct threat on Indian established brands providing best quality products with

reasonable prices


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While the levels of FDI tend to be resilient during periods of economic

uncertainty, it has the potential of adversely affecting the net capital flow of a

developing economy especially if it does not have a healthy and sustainable FDI

schedule

FDIs may enter the host country for unique strategic reasons but there isultimately the need to achieve returns on investments. For e.g. paying a premium

for the price of labor may improve the consumption power of workers, but it also

has the detrimental ability of disrupting the local employment market. When

prices rise, supply increases while demand falls. Similarly, when the price of

labor increase, wage premiums in this case, this creates a distortion and creates

disequilibrium in the labor market. Job matching stops being efficient and may

even create unemployment.

Flow to high profit areas rather than main concern areas

Through their power and flexibility, MNC can undermine economic autonomy

and control

Sometimes interferes in the national politics

Sometimes engage in unfair and unethical trade practices

Sometimes result in minimizing / eliminating competition and create monopolies

or oligopolistic structures

Conclusion:

On the basis of above research and discussion FDI has both positive and negative

impact on India Economy. Government should promote FDI and in order to lower down

its negative impact it should have redesigned framework for the local players.

Government should encourage FDI on gradual basis depending on products from one

area to other Product category wise clauses should be developed to allow FDI. To keep

pace with growing GDP government should encourage foreign investments. India needs

inflows to drive investment in infrastructure, a lack of which is often cited as restrictingthe countrys economic growth. Investment is also needed to expand capacity and

technology in sectors such as autos and steel, as well as to offset a big current account

deficit. In a nutshell, FDI should be encouraged with strict feasible and mutually

beneficial regulations. Better Investment Climate Need of the Hour.


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FDI IN RETAILTO TAKE INDIAS CONSUMERISM TO A NEWGROWTH TRAJECTORY:

Any process of change is a dialectic process. Change is the only truth which

prevails at the end if it brings well being to the masses. We believe sooner orlater opposition to the FDI in retail will end and new era will begin.

FDI IN RETAIL PRESENT STATUS:

51% FDI in multi brand Retail and 100% in single brand is put hold till the time

consensus is reached between the political parties. There is stiff opposition

being seen within the UPA allies in context of FDI in retail. Also opposition

party is seeing this as an opportunity to get the political mileage.

FINE POINTS OF PROPOSED FDI IN RETAIL:Govt allowed 51% FDI in multi brand retail and increased FDI limit in single

brand retail from 49% to 100%. This is right now put on the back burner due to

opposition from the political parties. Following are some of the points are the

fine points of the FDI in retail.

FDI is not likely under the automatic route implying that FIPB approval on

case by case basis.

Minimum Investmentto be done is $100 million.50% of the investment should be done in improving the back end

infrastructure.

30% of all raw materials have to be procured from the small and medium

enterprises.

Permission to set retail stores only in cities with a minimum population of 10

lakhs.

Govt has the first right to procure material from the farmers.

OPPOSITION PARTY STANDS ON THE FDI IN RETAIL:

Following are the concern regarding the FDI in Retail.

Govt does not have any clear stands on the FDI in Retail. They have not done

any survey and cost benefit analysis of this issue.


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As claimed by the Govt that it will create Jobs, opposition does not buy it.

They claim million of retailers have to shut their shops.

As claimed by Govt that it will bring down price, opposition thinks otherwise.

GOVT STAND ON FDI IN RETAIL:

Following are the facts that Govt is giving to support FDI in Retail.

FDI in retail will create 80 lakhs jobs.

It will bring growth and prosperity.

Prices of products will come down. This will tame inflationary pressure in the

economy.

GLOBAL RETAILING SCENARIO:

Retail has played a major role in improving the productivity of the whole

economy at large. The positive impact of organized retailing could be seen in

USA, UK, and Mexico and also in China. Retail is the second largest industry

in US. It is also one of the largest employment generators.

It is also important to understand that Argentina, China, Brazil, Chile,

Indonesia, Malaysia, Russia, Singapore and Thailand have allowed 100% FDI

in multi brand retail. These countries benefited immensely from it. Also small

retailers co-exist. The quality of the services has increased.China permitted FDI in retail in 1992 and has seen huge investment flowing

into the sector. It has not affected the small or domestic retail chains on the

contrary small retailers have increased since 2004 from 1.9 million to over 2.5

million.

Take for example Indonesia where still 90% of the business still remains in the

hand of small traders.

HOW FARMERS TO GET BENEFITED:

Farmers in India get only 10%-12% of the price the consumer pays for theagri-products. Coming of organized retailing will benefit farmers in big way.

Big retailers sell their product at very competitive prices. So, they source it

directly from the farmers. Middle man does not have any place in this format

of retailing. This will not only benefit farmers but also help in checking the food

inflation.


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Also India has very inadequate facilities to store the food grains and

vegetables. As the investment will flow into back end infrastructure, supply

chain will get strengthened. Storage is a major problem area and 20%-25% of

the agri products get wasted due to improper storage.

PRODUCT WASTAGE

TOMATOES 35%

MANGOES 30%

POTATOES 25%

Another area which is also the cause of concern is movement of vegetable

and other perishable agro item from one place to another. Lack of proper

transportation forces the farmer to sell their produce in local market. This

results in the lower realization on the produce.

IMMENSE GROWTH OPPORTUNITY FOR RETAILERS

India is Asias third largest retail market after China and Japan. Organized

retailing is very virgin space in India. It provides immense growth opportunity.

Only 5% of the total sales are being done by organized retailer. Currently

Indian Retail sector have sales of around $500 billion. Retail sector is

expected to have sales of $900 billion by 2014. It still far behind China, whose

retail sales by 2014 is expected to cross $4500 billion mark.

Purchasing power of Indian urban consumer is growing and branded

merchandise in categories like Apparels, Cosmetics, Shoes, Watches,

Beverages, Food and even Jewellery, are slowly becoming lifestyle products

that are widely accepted by the urban Indian consumer.

The Indian retail sector can be broadly classified into:

Food Retailers

Health and beauty Products

Clothing and Footwear

Home Furniture & Household goods

Leisure & Personal Goods

Durable goods


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Of these above segment Food and beverage and clothing segment is

expected to grow exponentially.

GROWTH DRIVERS OF INDIAN RETAIL SECTOR:

Rising Income and increase in convergence of consumer taste andpreferences.

Dual family Income.

Knowledge about different product through different medium like Internet,

Television etc. Also knowledge about the latest trend and fashion.

47% of the Indias population isunder the age of 30. This category is driving

the consumption story.

Emergence of new retailing format.

Availability of Credit Facilities.

FDI COULD BENEFIT STRESSED COMPANIES:

FDI in multi brand will stimulate investment in the sector. There are

companies in the retail sector that are reeling under debt. These companies

could get fresh lease of life.

Company Debt (Rs Crore) Market Cap

Pantaloon 4,200 3, 867Vishal Retail 700 42

Provogue 400 275

Beneficiary of FDI in MultiBrand Retail:

Multi Brand Retail Stores: 51% in multi brand retail.

Pantaloon Retail

Vishal Retail

Shoppers Stop

Koutons

Trent


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Single Brand Retail: 100% FDI in Single Brand Retail.

Archies

Cantabil

VIP Ind Titan

IFB Industries

Real Estate: Especially mall developers. Retailers like Wal-Mart; Tesco

operates in large area of 50,00060,000 sq ft. They generally pay to the

builders certain percentage of the total revenue. Real Estate companies into

retailing space to be benefitted.

Unitech

DLFSobha Developers

FMCG Companies:Big retailers generally sources from the producers,

FMCG companies are going to be benefited.

HUL

GSK

Godrej Consumer Dabur

Marico

SIDE EFFECTS OF THE FDI AND SOLUTION:

Nevertheless much said about good things that FDI in retail will bring but

argument will not be justified if we do not take into account the grey areas.

Some of the grey areas are:

Predatory pricing could strangulate the domestic retailers.It has been seen MNCs retailers uses there big size to kill competitors.

In order to bring goods at lowest possible price for customers they squeeze

the margins of their suppliers. So as claimed by thousand that suppliers will

benefit, it still doubted.

In order to correct these anomalies, India need to have strong regulator for the


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sector. And at the same time strengthen the Competition Commission of India

before these Big Retailers prowls into the Indian Territory.

CONCLUSION:

We wish row over FDI in retail gets over soon and India should embrace newera of retailing. And Govt makes right kind of body to vigil these giants. Indian

consumers are waiting to splurge. Indian consumers balance sheet is still

clean, which provide much of room to consumption related debt.

Mall ManagementA GrowingPhenomenon in Indian Retail Industry

Executive Summary

The Indian retail market is expected to continue its growth trajectory into 2010. Mall management has been identified as a critical factor for the success of malls and the retail

industry across the world. Mall management broadly includes mall positioning, zoning, tenant mix, promotions/ marketing

and facility/finance management.

Currently, the Indian retail market lacks designated mall management firms. Large real estatedevelopers and retail chains either have their own mall management arms operating assubsidiaries or have contractual agreements with international property consultants.

Till recently, mall management was limited to facility management by a majority of developers inIndia, leading to gaps in mall management practices.

Given the high future supply of malls and increasing competitiveness within the Indian retailmarket, developers must correctly address these gaps to ensure success.

IntroductionOrganised retailing in India witnessed a gross turnover of USD 320 billion1 in 2006. Althoughthis figure is low compared with other developed economies, industry experts expect the growth rateof this sector at 35%2 until 2010. At present, about 100 malls are operational at a Pan-India level witha total area of 19 million sq ft. As per the current estimates, about 3003 additional malls are expected tobe constructed across the country by 2010.

In the current market scenario, both consumers and retailers have limited

choice in terms of mall shopping experience.

According to the Jones Lang LaSalleRetailer Sentiment Survey 2006, 95% of the respondentsexpect their gross turnover to improve and have plans for expansion in 2007. About 70% of those whohave expansion plans said they prefer malls over high streets for their expansion, indicating therising demand for malls as the preferred destination of organised retail in India. Moreover, about 65% of

those who preferred malls over high streets also said that mall management is expected to become the

deciding factor for a malls success in the future. However, a sense of concern was expressed over the


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following challenges to the Indian retail market:

Lack of quality locations shortage of trained staff rising rental values mall management

The first three concerns can be classified as external factors, whereas mall management is internal.External factors are common to all players in the Indian retail industry, whereas mall management isspecific to individual malls. We anticipate that the success of Indian malls will not only be achieved byhousing the biggest and the best mix of retailers, but also by setting up new standards and proceduresin mall management that will provide a platform to differentiate its products and services fromcompetitors.

In the current market scenario, both consumers and retailers have limited choice in terms of mallshopping experience. As organised retail grows, we expect the market to be more competitive byproviding more choices to consumers and retailers. At this point, developers will have to work harder tocreate a differentiation for their product. We believe consumers and retailers will be attracted to malls that

are professionally managed, making effective mall management a critical factor behind the success of amall.

This white paper focuses on the internal factor: effective mall management as a growingphenomenon in the Indian retail industry today. The prime objective of landlords as well as ofinvestors is to attract shoppers and persuade them to purchase goods and services. This will in turn

boost retailers turnover and benefit their bottomline. Efficient mall management can help landlordsachieve this goal.

What is Mall Management?Globally, mall management broadly includes:

Positioning a mall zoningformulating the right tenant mix and its placement in a mall promotions and marketing facility managementinfrastructure, traffic and ambience management finance management

Positioning a MallPositioning a mall refers to defining the category of services offered based on demographics,psychographics, income levels, competition in neighbouring areas and extensive market research ofthe catchment. For example, if the market research indicates that the average number of households

living in a particular area belongs to the upper middle class, then a high-end retail mall would suit thelocation. An example of this practice can be seen in the upcoming malls, Select City Walk in Saket andDLFs Emporio in Vasant Kunj. We believe that theseretail developments are prime examples of goodmall positioning. These malls have been specifically designed after an extensive market research, basedon the catchment area of South Delhi. The malls provide high-end luxury products catering to the eliteclass (socio-economic classification A and B consumers) residing in South Delhi.

Positioning also refers to the location of the shopping mall. A good location defined in terms of factorslike ease of access via roads, good visibility, etc. is considered as one of the prime prerequisites for a


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mall. Although other activities such as trade/tenant mix can be revisited or redefined, the locationremains fixed, making it an imperative factor for a mall.

ZoningFormulating the Right Tenant Mix and Its Placement in a MallTenant mix refers to the combination of retail shops occupying space in a mall. A right tenant mix wouldform an assemblage that produces optimum sales, rents, service to the community and financiability ofthe shopping mall venture.4 Zoning refers to the division of mall space into zones for the placement ofvarious retailers. A mall is dependent on the success of its tenants, which translates to the financialfeasibility of the tenant in the mall. Generally, there are two types of consumers visiting mallsfocusedand impulse buyers. The time spent by focused buyers in malls is relatively lower compared with impulsebuyers who also enjoy window shopping. There is little that retailers can do to attract focused buyers asthey usually know what they require and from where. However, right tenant mix and optimum retailerplacement after a diligent zoning exercise can help retailers attract both types of consumers, especially theimpulse buyers. Formulating the right tenant mix based on zoning not only helps attract and retainshoppers by offering them multiple choices and satisfying multiple needs, but also facilitates the smoothmovement of shoppers within the mall, avoiding clusters and bottlenecks. This helps influence shoppersmall preference and frequency of visits. It also helps in building a distinct image in the minds of shoppers,which is critical considering the robust upcoming supply of malls. The selection of the right anchor tenant

plays a crucial role in establishing a good tenant mix. The anchor tenant is defined as the largest occupierin a mall in terms of square feet. Vanilla retailers5 cluster around the anchor and feed off the shoppingtraffic it generates.The successful execution of the zoning exercise for a mall is carried forward throughlease management on an ongoing basis. Forging good leases with retailers is an essential part of ensuringthepresence of the right retailers in a mall. The Forum Mall in Koramangalam, Bangalore is an exampleof a successful mall led by good zoning and tenant-mix mall management practices.

For e.g. The Forum Mall is designed in a dog bone fashion, an anchor tenant at each end and vanillaretailers in the middle. Landmark and Westside are the anchor tenants of this mall, and the food court ispositioned on the top floor to attract consumers vertically up. Forum Mall was built in 2003 and was thefirst mall in Bangalore City. Since then, six new malls have been constructed in the city and yet the ForumMall continues to command the highest foot traffic, continuing to be one of the most successful malls in

the city in terms of annual revenues. It is also widely believed that one of the driving factors behind thesuccess of this mall is its zoning and superior tenant mix compared to competition.

Promotions and MarketingPromotional activities and events in a mall form an integral part of mall management. Activities likefood festivals, handicraft exhibitions and celebrity visits increase foot traffic and in turn sales volumes.Organising cultural events has time and again proved vital in attracting consumers to a mall. Suchactivities may also act as a differentiator for a mall. Developers can work on drafting marketing strategiesfor individual malls to meet the needs of the local consumer base and the challenges of local, and insome cases, regional competitors. Ansal Plaza, the first mall in Delhi, is an example of a successful mallled by good promotions and marketing mall management practices.

For e.g. Ansal Plaza : -Regular promotional activities at Ansal Plaza, including cultural events haveensured a steady foot traffic in the mall since its inception in 1999. The mall also has an amphitheatrededicated to these promotional activities. This has been one of the driving factors behind the success ofthe mall, despite having a less optimal mall design and tenant mix compared with some recent malls inthe NCR.

Facility ManagementFacility management refers to the integration of people, place, process and technology in a building.


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It also means optimal utilisation of resources to meet organisational needs. It broadly includesinfrastructure, ambience and traffic management.

a. Infrastructure ManagementInfrastructuremanagement refers to the management of facilities provided to the tenants within themall. This includes provision of adequate power supply, safety issues in case of emergency and

miscellaneous issues related to signage, water supply, sanitation, etc. as shown in Figure 1. Theseform an integral part of mall management as they are the basic amenities that any tenant would lookfor in a mall. Infrastructure management also includes risk management issues such as essentialsafety measure asset liability and environmental audits as well as emergency and evacuationtraining.

In favourable, lush green landscaping with seating facilities and the presence of food andbeverage inside or outside the mall can increase foot traffic.

. b. Ambience ManagementThe overall shopping experience provided for consumers becomesan important factor for the success of any mall. Ambience management includes managementof parks, fountains and overall look of the mall. A mall is not just a place for shopping but is alsoa place where people spend their leisure time. In favourable, lush green landscaping with seating

facilities and the presence of food and beverage inside or outside the mall can increase foot traffic.

c. Traffic ManagementTraffic management includes managing foot traffic into the mall and parkingfacilities. Foot traffic management involves crowd management inside the operational area of a mall. Theflow of people is related to the design of the mall and the spatial distribution of its tenants. For example, astar-shaped mall tends to have a problem of crowding in the centre of the mall, as everyone has to passthrough the centre while moving from one side to the other. Circular malls, on the other hand, would nothave this problem. They tend to have better pedestrian flow and less congestion. Managing parkingfacilities includes provision of ample parking and Manoeuvring of cars in the parking lot.Power SafetyInfrastructure Management

Inorbit Mall in Malad, Mumbai is an example of a successful mall led by good facility management

practices.

Finance ManagementProfessional financial management of a mall as a business venture is a must. Mall managementalso covers financial management, which involves monitoring and controlling of various issuessuch as:

Cash receipts and collection of income including rentals, service charges, car park receipts,Electricity and other utility income.

Developing accounting systems to track the ageing of debts, payment delay patterns, bad debtsand payment of all invoices and expenses

Developing standard financial templates so that a detailed annual property budget is prepared

At times, organising resources to deliver an efficient and effective annual external audit

Indian Scenario for Mall ManagementThe partial foreign direct investment (FDI) relaxation in 2006 allowed 51% ownership in jointventures by single-brand companies in the retail market. This triggered high international single brandretailer interest in the Indian retail market. Additionally, large Indian conglomerates such as RelianceIndustries and Aditya Birla Group are commencing their foray into retailing across the country. Thisprompts the Indian retail industry to undoubtedly move on a high growth curve. However, at this juncture,retailing is still faced with one major challenge: systematic mall management. Currently, there are very


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few designated mall management companies in India. However, big retail chains such as Future Groupand some large developers have set up their own mall management divisions that operate as theirsubsidiary companies. Some developers such as DLF have also recently entered into contractualarrangements with international property consultancy firms to manage their malls. Historically,developers were managing their malls in-house, which is expected to change going forward. Earlier in thedecade, mall developers were more inclined towards exiting the project early by selling retail mall units to

investors at the pre-completion and post-completion stages and booked profits. As the ownership ofindividual retail spaces were with different entities, there was no central authority managing the malls.There was no control over the various facets of mall management mentioned earlier in the paper. Eventhough there have been some examples of professionally managed malls in recent years, organised retailin Indian malls have a long way to go to achieve optimum mall management. The current Indian scenariois plagued by various issues, some of which are discussed below.

Inorbit MallFor. E.g. In orbit Mall in Mumbai by K Raheja Corp is a good example of facility management in a mall. Ithas two anchor stores placed at the two corners of the mall. There are three entry points, one each fromthe two anchor stores and another entry directly to the mall atrium. With three entry points, trafficmanagement within the mall is better organised. The mall also provides ample parking space and

superior infrastructure management. The In orbit Mall commands higher rental values of INR 175 per sq ftper month compared with other malls in the north-western suburbs of Mumbai with average rental valuesof INR 135 per sq ft per month in 4Q06, indicating itssuccess story. The low vacancy rates at Inorbit Mallare about 2% compared with an average of 1015% in other north-western suburban malls during thesame period. This indicates the popularity of this mall over its competitors. Transforming a RetailCentre into a Brand through Professional Mall ManagementSouthgate Mall in Sydney AustraliaA Case StudyFor e.g. The Southgate Mall is an excellent example of how professional mall management cantransform, refurbish and reposition a retail centre into a popular and profitable venture. The SouthgateMall was built in 1983 and is located in the Sutherland Shire close to south of Sydney CBD, Australia.This retail property has a total built-up area of 250,000 sq ft. It comprises 58 specialty stores and isanchored by major local department store such as Coles Supermarket, Kmart and Woolworths. During19992000, Southgate embarked on a bold refurbishment and repositioning programme worth AUD 13

million, aimed at increasing mall traffic, sales and rental value. The refurbishment programme, led by aprofessional mall management company, was a complete makeover of the premises. The mallmanagement firm advised and implemented the change in management including repositioning oftenants, addition of a food court, correction of poor sight lines and access, addition of fresh supermarket,new shop fit-outs for all tenants, refurbishment of common areas and ceilings and revaluation andredirection of the marketing function. In 2006, an additional 20,000 sq ft of retail space was added to theshopping centre. The mall management firm provided the leasing support to place tenantsin the mall. This led to an additional income of AUD 620,000 per annum for the property and potentialadditional sales of AUD 20 million. The mall management firm also initiated a strategic marketingplan aimed at further strengthening the Southgate brand and reinforcing the malls retail mix, with strong emphasis on fresh food offer. As part of the plan, it launched Fresh world, which helped increasecustomer traffic per week by 11.4% compared with the same week a year ago and by 17.7% on theprevious week. The increase in foot traffic due to the addition of this store exceeded all expectations, withsignificant growth being experienced across individual specialty stores. The total centre average unitspend rose 5.4% and reported a moving annual turnover (MAT) increase of 2.8%. In conjunction with thisdevelopment, the mall management firm implemented a sustainability initiative to reduce waterconsumption across the property. After adopting this measure, savings of AUD 12,000 per annum wasgenerated, reducing overall property outgoings. After these successful implementations, the mallmanagement firm extended its services to advice on the master planning of the mall. Further acting onthe mall management firms advice, the adjoining building of about 19,500 sq ft was acquired, with theobjective of further expanding Southgates retail mix and enhancingthe malls food court.Since the completion of the original development, Southgate has witnessed high levels of occupancy,ensuring continued growth in income revenue. This portrays how a professional mall management


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company can deliver continued growth and performance through quality management services.

Issues Related to Mall Management in the IndianRetail Market

a. Lack of Feasibility/Market Research Prior to the Development of a MallIn the past,some malls were constructed without carrying out a rigorous due diligence exercise on

their feasibility. The market scene is gradually changing wherein more and moredevelopers are approaching property consultancy firms to conduct feasibility andpositioning studies for their projects.

b. ZoningLandlords/developers tend to lease out retail space on a first-come-first-servedbasis. This creates a sub-optimal tenant mix like a food and beverage outlet next to adesigner apparel shop instead of an accessories or a footwear shop.

c. Design IssuesAt present, most of the popular malls have long queues and congestionoutside their main entry points during weekends and festive seasons. Having only oneentry and exit points also leads to overcrowding. Similarly, the visibility of retail unitsfrom all vantage points is poor in many malls.

d. Few Promotional ActivitiesThere are very few promotional activities organised in themajority of malls at present. Developers perceive that these events only help increase foottraffic and not revenues.

e. Facility ManagementGood infrastructure/facility management of common areasbecomes a problem in malls where retail outlets are sold as strata title.

f. ParkingMany malls in India do not have adequate parking. Since most malls are beingbuilt in the city, developers typically provide basement parking facilities. However, theseparking spaces are inefficient due to low ceiling heights, bad lighting and single entry andexit points.

.

.

The Way AheadUntil very recently, mall management was synonymous with facility management in the mind of mostIndian developers. The realisation that they are different and that professional mall management willaffect the long-term viability and success of a mall is sinking in gradually and is being accepted acrossdevelopers, landlords and retailers. The shortcomings pertaining to issues of mall management in Indiahave been discussed in the previous section. To overcome these shortcomings, developers must conductprofessional mall management practices starting from rigorous feasibility exercise or market research tofacilities, ambience and finance management of a mall.

In most of the developed markets, mall management is an established independent service line. The retailsector in these developed economies is mature in terms of end-consumer demand, number of retailersand experienced developers. In India, retail is an emerging market having immense potential in termsof opportunities. A common practice in developed markets such as the United States and Europe is theuse of the revenue share model in determining rent. Under this arrangement, the tenant will either pay afixed monthly base rent as minimum guarantee and/or a percentage of sales rent, whichever is higher.This is beneficial for both landlords and retailers as landlords are encouraged to organise promotionalactivities that would increase retailers revenuesbecause they may have a percentage share in it. Themodel works successfully in bullish and bearish market conditions. When the market is weak,


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retailers are protected from rising rental costs. This unique approach is being adopted by Select CityWalk, Delhi. The use of the revenue share model is expected to gain momentum in the future as moreand more Indian developers become corporatized. To ensure that a mall attracts retailers andconsumers, professional mall management is a necessity. The mall market is an extremelycompetitive one, having a high degree of internal and external competition, the latter being fromestablished high-street locations across all cities. To lure retailers and consumers to its mall, a developer

has to ensure that their property follows the best practices in the market especially in terms of mallmanagement.

In India, retail is an emerging market having immense potential in terms ofopportunities.

RETAIL MALLS: NEW MANTRA FOR SUCCESS

SAMRIDHI TANWARDR. NEERAJ KAUSHIK DR. V.K. KAUSHIK

AbstractIndia- the nation of shopkeepers gets a makeover with the advent of organised retail. Inthe Global Retail Development Index of 30 developing countries (drawn up by AT Kearney) IndianRetail strongly stood at second position. Organised retail which currently constitutes around 6percent of overall retail sales is projected to grow at 25-30 percent p.a., and touch the mark of $23bn

by 2010 and $64bn by 2015. The concept of Retail as entertainment came to India with the arrivalof malls. Mall- a one stop destination, is a set of homogenous and heterogeneous shops adjoining apedestrian, or an exclusive pedestrian street, that makes it easy for shopper to walk from store tostore without interference from vehicular traffic. The count of existing and upcoming malls in

National Capital Region (NCR) is more than any other Indian city. Thats why this region is

popularly known as Mall Region. In the present paper, the authors have endeavored to criticallyanalyse the established players in NCR. The challenges bestowed upon the Indian retail sector and

their possible solutions have also been discussed.

Keywords: Indian Retail, Malls, NCR

Indian Retail Sector India, with more than 11 million retail outlets is known as Nation ofshopkeepers [1]. The magic wand of 1991- LPG has revolutionised every facet of Indian economy.Organised retail also got its share of refinement with the establishment of organised players likeShoppers Stop, Pantaloons and Crosswords etc. But its only after 2002 organised retail took off

with an unparallel brisk pace [2]. Flourishing with an exponential rate, Indian Retail Sector is ratedas the fifth most attractive retail destination in the world map. In the Global Retail DevelopmentIndex of 30 developing countries (drawn up by AT Kearney) Indian Retail strongly stood at secondposition. Statistically the total volume of retail trade in India was $330bn in 2007 which is expectedto touch the milestone of $427bn in 2010, $500bn in 2011 and $637bn in 2015 [3]. The pie ofmodern retail in total retail industry is set to touch 22 percent by 2010 [4] from present 5 percentshare [5] thus creating room for additional 3-3.5 million employment opportunities [6]. Presentlyretail sector is bestowing 10 percent to Indian GDP, and provides a living to 7 percent of the nationalworkforce. The makeover of retail sector is reflected in the rapid rise of retail sales. Euro MonitorInternational figured that retail sales during 2003-08 was raised more than the growth of consumerexpenditure. There was a growth rate of 8.3 percent per year in retail sales as compared to 7.1 percentgrowth of consumer expenditure during the respective period [7].


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Organised retailing in India is currently in the second phase of the evolution cycle of retail [8]. ATKearney elaborates that the Chinese retail market has entered the diminishing stage while itsneighbor Indian retail market has entered the growth stage [9].

Organised retail : - Currently constitutes around 6 percent of overall retail sales. It is projected togrow at 25-30 percent per annum, and touch the mark of $23bn by 2010 and $64bn by 2015 [10].KPMG outlined that in the next five years growth rate of Indian organised retail will be higherthan the GDP growth rate [11]. The revenues generated from the organized retail sector areanticipated to grow triple i.e. US$24 billion by 2010 from the current US$7.7 billion [12]. Retailtycoons are projected to explode with a compounded growth rate of 50 percent every year till2011 [13]. To enhance its share further, the organised retail business has decided to target the300 million middle class consumers, including those in the rural areas, who form a consumermarket worth more than $100bn [14]. Hitherto, large cities were the drivers of retail boom inIndia, but the scenario has switched as organised retailing in large cities is growing at thediminishing rate of 35-40 percent while growth rate of 50-60 percent is registered in small cities[15].

Concept of MallsThe concept of Retail as entertainmentcameto India with the advent of malls. Mall fever hastouched every facet of Indian society. Whatever is the income stratum of consumers, malls make nodistinction in proffering most-revered national and global brands [16] Shopping Mall refers to a setof homogenous and heterogeneous shops adjoining a pedestrian, or an exclusive pedestrian street,that make it easygoing for shopper to walk from store to store without interference from vehiculartraffic [17]. Malls are incorporated with a whole bank of lifts and escalators for smooth transit ofshoppers. Malls are located in proximity to urban outskirts, and ranges from 60,000 sq ft to 70,000 sqft and above. The future of organised retailing is largely in the hands of mall where the shoppers getquality, quantity, aspirational appeal, recreation facilities and ambience [18]. 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 [19]. Malls offer aplethora of attractions- high profile shopping, impulse eating establishment, a glitzy and glamorousenvironment to discerning shoppers of more refined tastes, who are more concerned with qualityand fashion and less concerned with budgets [20]. Mall reveals six factors namely comfort, diversity,luxury, mall essence, entertainment, and convenience which are a source of cynosure [21].In India, malls have transformed shopping from a need driven activity to a leisure time entertainment[22]. The quality mall space which was just one million square feet in 2002 has accomplished newmilestones of 40 million square feet and 60 million square feet in 2007 and 2008 respectively [23].There is a paradigm shift in the mall scenario, from just 3 malls in the year 2000; the countrywitnessed 220 malls in the year 2006. Exhibiting signs of further enlargement India is likely to have

more than 600 in 2010 and 715 malls in 2015, with an estimated cumulative retail space of 100million sq. ft. [24]. Shopping malls in India are reckoned to worth Rs.38,447 crore by the year ending2010. Real estate corporations like DLF and Unitech are coming forth with the plans catering theever-escalating demand of shopping malls. In the next four to five years Rs 65,000 is budgeted to beinvested in retail real estate development [25]. In most of traditional Indian malls, around 30 percentof space is allocated to apparel retailers while 12-20 percent space is dedicated to Food & Beverages.Indian malls vary between 35,000 sq ft to 10,00,000 sq ft while U.S. version is 4,00,000 sq ft to onemillion sq ft. [26]. The largest malls in Indian metropolitan cities enjoy 25,000 footfalls per daywhich hikes to an average of 40,000 on weekends [27]. Due to radical revival of shopping and


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consumerism shopping mall syndrome has hit India in all earnest. Even though the malls aremushrooming from metros and mini metros to tier III cities, the spread of malls is highlyconcentrated in India. North Zone is having the peak attractiveness with 39% while South, East, andWest Zone respectively holds 18%, 10%, 33% of total malls pie [28]. Creating artificial productscarcity, cheap imitation, and taking customer for granted are the talks of yesteryears, thanks to themall culture [29]. Further, shopping mall is the paradise where various shopping motives like peergroup association, impulse shopping, hedonic, status consciousness, market mavens, economicmotive, utilitarian motive etc. can be fulfilled in one shot [30].

Malls in National Capital RegionNCR comprises of Delhi, Gurgaon, Noida, Faridabad and part of Ghaziabad towns. With aconsumption expenditure of Rs.9511 crores, Delhi is considered as the retailers paradise [31]. Thatswhy NCR is popularly known as Mall Region. Underneath are some of the established NCRplayers:

Shipra Mall

Developed in contemporary style, this mall sprawl in 4.5 lakh sq. ft. offering a truly uniqueshopping experience [32].

The Shipra Mall is the first and the only International Standard Retail cum Entertainment Mallwhich is inspired by classical Roman style architecture- a project worth Rs. 90 crores.

This landmark comprises Three Generation of Cinemas, 17000 sq ft of Kids Zone, 15000 sq ft ofFood Court, and parking for 1000 cars [33]. The beauty of the parking is that its on the same groundlevel as that of mall [34].

The leisure and entertainment hub is situated on National Highway 24, and boasted three state-of-the-art Screen Multiplex, Just about Movies (JAM) with one of the largest screens in India[35].

Ansal Plaza Delhis shopping paradise- dispersed in an area of 35 acres [36], has an amphitheatre with acentre stage and 45-feet high atrium. The atrium is made of French glass curtain wall that filters theultraviolet and other harmful radiation of the sun.

This new age shopping destination is having twin-level basement car parking area which canaccommodate 700 cars with 300 cars simultaneously parked on the ground level [37].

Climate controlled environment, ample infrastructural facilities like water cascades andfountains; passages and lobbies flooring made of granite and marble combination makes it adestination for shopping connoisseurs [38]. Popularly known as EDM, this mall is built on 3 lakh square feet and is located just opposite toInter State Bus Terminus, Anand Vihar.

This retail ambience is having three screen multiplex, an amusement area for children, and fine

dining restaurants with multi-cuisine options which gives it a cutting edge infrastructure. With the use of earth tones and a variety of textures like glass, stone, concrete and paintedmetals, the architect has been successful in providing a relax and inviting environment.

A red sandstone-building facade, a 60-meter illuminated spire, and an atrium with theamphitheatre style are the catchy highlights of the mall [39].


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Mgf Metropolitan Mall The most popular entertainment spot, spread in an area of over 2,50,000 square feet andincorporates more than 150 stores along a 7-screen Multiplex [40].

Tailor made mall- has a huge parking area spread on three levels can accommodate more than2000 cars at a time [41].

Exotic looks; bouquet full of international brands is taking good care of its resources andcustomers, by managing people who cross roads to get to the malls on the other side [42].

Metro Walk Mall The mall is a conjoint of three factors namely exemplar design, world-class amusement park,and a man-made lake.

The USP of the mall isAdventure Islanda world class amusement park, which isdeveloped by International Amusement Parks [43].

A total entertainment package worth more than 160 crores, with the park spread in an area ofover 62 acres and highlighting 20 different rides.

The park also follows the highest globally accepted safety standards of DIN-Deutshes InstituteFur Normung (European Safety Standards). A well-equipped first-aid centre provides facilities likean ambulance with a team of 24-hour in-house medical experts [44].

With its very spacious over ground parking space the mall can easily handle 1800 four wheelersat a point of time [45].

Swot Analysis of Indian Malls

STRENGTH

Skyscrapers with perfect blend of shopping,eating and entertainment, in shortshoppertainmentDeveloped in contemporary style, these flashymalls promises just about everything under thesun, from foreign gizmos to the very desibrands.Attractive destinations for civic and officialmeetings, hang out, reducing stress.Procure goods directly from factories andfarmers in case of lifestyle and food/beveragesrespectivelyBouquet of value propositi

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Retail Mall Mgmt

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