What Makes Delhi’s Retail Market Tick?
Knowledge Partner
JULY 2015
Delhi Retail Summit 2015 - Background PaperCBRE INDIA RESEARCH
Contents1 ExecutiveSummary
2 RetailOverview–Delhi
3 What’sCookinginDelhi’sShoppingCauldron?
4 EmpoweringBrandsandShoppersThroughTechnology
5 Footnotes
6 AboutCBRE
7 AboutCII
Executive Summary
RetailEvolutioninDelhi
FrombeingalargelyunorganizedmarketwithmostretailactivityconcentratedacrosshighstreetstobeingthetopcityinIndiaintermsofglobalretaileractivity,Delhi’sretailmarkethascomealongway.Thepastdecadehasbeeninstrumentalinshapingretaildynamicsinthecity;fromjustoneshoppingmallin1999,Delhicurrentlyhousesalmost57malldevelopmentsspreadovermorethan11millionsq.ft.Factorssuchasalargepopulationbase,highpropensitytospend,mallsbeingconsideredas“lifestyledestinations”,aswellasarelativelymoredevelopedintra-citytransportnetworkhavecontributedsignificantlytotheevolutionofretailinthecity.Thebrandmixhasalsoevolvedconsiderably—frombrandssuchasBata,Raymond’sandsomehome-growndepartmentchainstoglobalbrandssuchasGap,Zara,Mango,TomFord,LouisVuitton,Burberry,amongstothers.TherisingprominenceofIndia’scapitalasanattractiveretaildestinationcanbegaugedfromthefactthatmorethan118globalretailershaveeitherenteredorexpandedinthecitysince2012.Theluxurysectorhasalsobeenexpandingitswingsinthecity,withalmost12luxurybrandssuchasBvlgari,RobertoCavalli,ChristianLouboutinhavingenteredthecitysince2012.
RetailSpreadandDynamics
TheretailmarketinDelhiissplitacrossfourzones:East,West,NorthandSouth.SouthDelhihasthehighestconcentrationofmallsinthecityaccountingforapproximately38%ofthetotalorganizedretailstock.Themicro-marketnotonlyhasthehighestorganizedstock,butalsothehighestpercentageofprimeinvestmentgrademalls(73%),therebyjustifyingitspopularityamongretailersandconsumersalike.Mostoftheseprimedevelopmentsfollowtheleaseonlyoperationmodelandemploystrategiessuchefficientmallmanagement,supportfacilitiesaswellasflexibleleaseagreementsthatallowthemtooperateinaproficientmanner.Otherstrategiessuchasseasonalthemes,pop-upstores,innovativetechniquestolaunchproductsandcustomerengagementviasocialmediaarealsobeingfollowedtoensurebettervisibilityandhigherfootfalls.Thisleavesalottobelearntforalargemajorityofotherretailmalldevelopmentsinrestofthecitythathavebeenoperatingonthestrata-salemodelandarenotproactivelyundertakingtenantprofilingandzoning.ThereportdiscussesastowhatmakesleadingmallsinDelhitickandwhatstrategiescanbeadoptedbymallstoremainrelevantinaneverchangingretailmarket.
TheF&BNucleus–Delhi
TheFoodandBeverage(F&B)sceneintheCapitalhasalwaysbeenvivacious,howeverthepastfivetosixyearshaveseenasignificantchangeinthewayDelhi’srestaurantslookandserve.Innovativeconceptshavemushroomedalloverthecitywitheachnewrestauranttryingtoexperimentandoutshineotheroperators.Customersarenolongersatisfiedwithjustgoodfoodbutalsodemandotherelementssuchasambience,entertainmenttobeintegratedwithintheirF&B“experience”.Finedining,internationalconfectionaryandbars,whichusedtoberestrictedtofivestarhotelsalone,havetodayspilledontohigh-streetsandshoppingcenters,whicharelinedwithstandalonecasualdinerestaurants,pubs,sportbars,lounges,nichebakeries,cafes,etc.AslucrativeastheDelhiF&Bmarketis,ithowevercomeswithitsshareofcomplexitiesandchallenges.Operatorsareposedwithquestionssuchashowmanyoutletstolaunch,whichmicro-markettooperatein,whichexpansionstrategytoadopt,whethertobelocatedonahighstreetorinamall,amongothers.Theyarealsodevisingwaystocircumventchallengessuchaslackofinvestmentgradespace,F&Bcompatiblespace,tailoringtheirmenuasperIndiapalates,amongstothers.Despitethesechallenges,theDelhifoodmarketprovidessignificantgrowthopportunitiesandoperatorsarewillingtotakeonthesechallengestoleveragetheopportunities.
© CBRE Ltd. 20151 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
TechnologyandRetail–IncreasingLinkages
From200millioninternetusersin2013toover500millioninternetusersby2017—including314millionmobileinternetusers—thegrowthstoryofinternetusageinIndiaisontheupsurge*.Asaresult,e-retailhasgainedmomentumwiththewidespreaduseoftechnologyacrossageandincomegroups,impactingconsumer–retailerdynamics.OnlineshoppinghasgainedsteamclearlyelucidatedbyCBRE’sconsumersurvey,‘How We Like to Shop – 2015’where78%oftherespondentsadmittedtoshoppingonlineatleastonceamonth.Withalargemajorityoftherespondentspreferringtouseonlineplatformsmoreofteninthecomingyears,ithasbecomeclearthattechnologyispoisedtoplayalargerroleinshapingretaildynamicsinIndia.
Onlineplayershavebeentryingtoleveragetheadventoftechnologytotheiradvantage.Theyhavebeeninvestingheavilyindevelopingapplicationsfortheirwebsitesinexpectationofgeneratingmostoftheirsalesthroughmobileplatforms.Asalmost76%oftheconsumersinoursurveyadmittedtousingsocialmediatoupdatethemselvesonschemesatshoppingcenters,socialmediaisbeingusedasakeycustomer-engagementtool.
Whileonlineretailersarereliantontheuseoftechnologyfortheirbusinessestogrow,evenbrick&mortarstoresareadoptingtechnologytobeanintegralpartoftheirbusinessmodel.Theyear2014alonesawatleast18globalbrands(alreadyestablishedwithbrick&mortarstores)movingonline,includingbrandssuchasMango,Aldo,Superdry,Nautica,TommyHilfiger,NineWestandSteveMadden.Playersarealsoadoptingthe‘Omni-channel’withservicessuchasbuyonlineandcollectin-store,acceptcustomerreturnsandrefundsforproductsboughtonline,storekioskforbrowsingandpaymentforproducts.OtherinnovationssuchasmobilewalletsandQRcodesarebeingusedtomaketheshoppingexperienceseamless.Someglobalinnovationssuchasuseofsocialmediaresponsetoin-storeproductstodrivesales,enrichingtheproduct-trialexperience,customercrowdsourcingandusingdataanalyticstopersonalizecustomerexperiencearetechniquesthatarelikelytopavewayforgreateruseoftechnologyintheretailindustryasawhole.Thepapertouchesuponthesetopicsindetailanddiscussesthewayforward.
* Internet and Mobile Association of India (IAMAI)
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 2
Retail Overview – Delhi
EvolutionoftheNationalCapitalfromjustaPoliticalPowerhousetoaShoppingDestination
Overthepasttwentyyears,Delhihasevolvedfrombeingthechiefpoliticalcentertoamajorhubforretailandotherservicesindustries.Tillthe1990s,theIndianretailmarketwasprimarilyunorganizedanddominatedbytraditional,neighborhoodretailersor'kirana'(Mom&Pop)stores.Mostoftheretailstoresinthecountryweresmall,family-runbusinesses,predominantlyrelyingonhouseholdlabour.Organizedretailwasvirtuallynon-existent;andtheonlyorganizedretailthatexistedwerefashionapparelstoressuchasRaymondsandNalli’s,allofwhichoperatedthroughtheirexclusivebrandoutlets(EBOs)orfranchiseeoutlets.Itwasonlyduringthe1990sthatthewaveofliberalizationandprivatizationusheredinnewretailformats,pavingthewayfororganizedretailerssuchasShoppersStop(1991)andPantaloons(1997),amongothers.Movingawayfromthetypicallandscapeofstand-alonestores,agradualimprovementwaswitnessedwiththeintroductionofthesedepartmentstores.Whiledepartmentstoresdidprovideabetter“onestopshop”experience,bulkofthecity’sshoppingactivitywaslimitedtothehighstreetssuchasConnaughtPlace,LajpatNagarandSouthExtension,clearlyhighlightingthelackoforganizedshoppingcenters,comparedtootherdevelopedmarketsacrosstheglobe.
ThedevelopmentoforganizedretailinDelhibeganwiththecommencementofAnsalPlazaonKhelGaonMargin1999.TheDelhiDevelopmentAuthorityauctionedlandparcelsfordevelopmentofdistrictcentersinthecity,suchasSaket,VasantKunj,NetajiSubhashPlaceandShivajiPlace;eventuallyleasingtoaspurtinorganizedretaildevelopmentoverthenextdecadeandtheriseof‘mallclusters’—aphenomenonparticularlyprevalentinthecity.Oncetheinitialsetofmallsbeganattractingconsumerfootfallsandretailerinterest,developersstartedapplyingdifferentiationtechniquestoensureenhancedfootfallsandbiggercatchments.TodayDelhihasemergedasthetopchoiceformostglobalretailersplanningtoenterthecounty.ItboastsofawidespectrumofbrandsrangingfromaSplashtoaZaraandaBurberry.DiningchoicestoohavebecomesophisticatedwithoptionsrangingfromMcDonaldsandStarbuckstoChilli’sandRobertoCavalliCafé.
WhyDelhi?
StrongPopulationBase:Withapopulationof17.2millionin2013-141,Delhihousesoneofthelargestpopulationbasesinthecountry,faraheadofevenleadingcitiessuchasMumbai(12.5million)2andBangalore(9.5million)3.Retailersinthecityhaveeasyaccesstoanexistinglargecatchment,besidesaninfluxoftouristsandexpatriates.ThecityalsoservesasabasetoexploreNorthIndia,besideshavingestablishedcommercialhubsandpremiumeducationalinstitutions(thatpromotetheinfluxofstudentpopulation).
HighPropensitytoSpend:Thecity,despitehavingsimilarlevelsofanaveragehouseholdincomeofaboutINR1millionp.a.ascomparedtoMumbai(INR1.2millionp.a.)andBangalore(INR1.1millionp.a.),hadthehighestannualhouseholdexpenditureofabout21.6%in2013-14onfood,clothingandfootwearascomparedtoothermetropolitancitiesofMumbai(17.7%)andBangalore(12.9%)4.
1. Indicus Analytics, 2013-142. Indicus Analytics, 2013-143. Indicus Analytics, 2013-144. Indicus Analytics, 2013-14
© CBRE Ltd. 20153 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
Mallsarea‘LifestyleDestination’:TherehasbeenanemergingtrendintheNationalCapitalRegion(NCR)ofmallsbeingperceivedasentertainmentdestinationsratherthanjustshoppingcenters,leadingtorisingfootfalls.Thebrandmixofsuccessfulmallshasthusgonebeyondthetraditionalcombinationofsegmentssuchasapparel,accessoriesorfootwear;andhasevolvedintoincludingexperientialsegmentssuchasgyms,spas,salons,andgamingcentersaswell.
FavorableGeographicalLocation:LocatedinproximitytoprominentcitiesofPunjabandHaryana,suchasLudhiana,AmritsarandChandigarh,allowsretailerstocatertoawiderpopulationfromastoreinDelhi.Leadingapparelbrandsandmorespecificallyluxurybrandsareabletoleveragethisfactortotheiradvantageduetothenoveltyfactorwhileenteringthecountry.
ConnectivityandTransitSystems:Excellentconnectivitywithinthecityviatheroadandmetrorailnetworkhasaccentuatedtheeaseofshoppingacrossretaildestinations,attractingmassesfromthesuburbanlocationsofGurgaonandNoida.Connectionofmostshoppingdestinationswiththemetrosysteminparticular—regardedasoneofthesafestmodesofpublictransportinthecapitalcity—hascontributedtohigherfootfalls,attractingcrowdsofcollegiateacrosstheNationalCapitalRegion.
MallClusters:Thecityhas‘mallclusters’asauctionoflandbytheDDAledtoseveralmallscomingupnexttoeachotherinVasantKunj,SaketandRajouriGarden.Thesemallstendtoattracthighfootfallsastheyallowconsumerstoaccessalargersetofbrandsascomparedtovisitingasinglestand-alonedevelopment.Thisalsoallowsretailerstogainbettervisibilityandtargetalargerpopulace,leadingbrandstovieforspaceintheseclusters.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 4
GlobalRetailersThrongtheCity
ThepopularityoftheCapitalasaretaildestinationisdemonstratedbythefactthatmorethan30globalretailers—includingGap,Sephora,Hackett,Crabtree&Evelyn,DunkinDonuts,andBrooksBrothers,amongothers—havingchosenitasanentrypointintothecountryoverthelastthreeyears.Therehasbeenarisingincidenceoffashionbrandsexpandingwithinthecity,withbrandssuchasZara,Mango,Aldo,Promodopeningmorethanonestorewithinthecity.WhileglobalbrandsfromF&Bandfashionapparelsegmentsdominatetheretaillandscape,thecityhaswitnessedasmallbutsustainedflowofglobalretailersfrombeautyandcosmeticstoelectronicsandothersegmentsinrecenttimes.
Expansion New entry
Entry and expansion of global retailers in Delhi
Source: CBRE Research, Q2 2015.
(Figure 1)
05
1015202530354045
2012 2013 2014 2015 YTD
No. of Brands
Segment wise break up of retailer entry/expansion in Delhi (2012-15)
Source: CBRE Research, Q2 2015. Note: 2015 YTD is till July 2015
(Figure 3)
(%) Share
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 YTD
Coffee and Restaurants Homeware and Department Stores Luxury and Business
Specialist Clothing Consumer Electronics
Mid Range Fashion
Others
High Street Shopping Centre
Mode chosen by brands for entry/expansion in Delhi
Source: CBRE Research, Q2 2015.
(Figure 2)
% of brands
0%10%20%30%40%50%60%70%80%90%
100%
Expansion New entry
Delhiservesasabaseforentryandexpansionactivityofglobalretailersinthecountry,withmorethan118brandsentering/expandingacrossthecitysince2012.Shoppingcentersemergeasaclearchoiceforglobalplayerswithmorethan70%choosingthesamefortheirentry/expansionactivities.Mostglobalbrandsenteringthecityprefertolocateinashoppingmallandthenevaluateoptionsacrosshighstreetsforexpansionactivity.Thistrendismoreaccentuatedacrossbrandsinthecoffeeandrestaurantssegment.
© CBRE Ltd. 20155 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
Coffee and Restaurants Homeware and Department Stores Luxury and Business
Specialist Clothing Consumer Electronics
Mid Range Fashion
Others
Segment wise global retailer entry/expansion inDelhi – High Streets
Segment wise global retailer entry/expansion inDelhi – Malls
Source: CBRE Research, Q2 2015.
(Figure 4)
% Share
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 YTD
(Figure 5)
% Share
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 YTD
New Delhi MumbaiSource: CBRE Research, Q2 2015.
(%) Share
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 YTD
Global Retailer Entry/Expansions over the Years
(Figure 6)
Split of Global Retailer Entry/Expansions (2012-15)
(Figure 7)
NEW DELHI
53%MUMBAI
47%
Theshareofcoffeeandrestaurantsasasegmenthasbeenfastrisingfromlessthan30%in2012tomorethan40%in2014andmorethan50%in2015YTD.Morethan45entries/expansionshavebeenwitnessedinthecitysince2012includingoperatorssuchasWendy’s,Starbucks,BurgerKing,Nandosamongstothers.
HighstreetsinDelhiaredominatedbycoffeeandrestaurantswithnopresenceofluxurybrandsonthesame.Infact,allentries/expansionsin2015tillnowhavebeeninthecoffeeandrestaurantssegment.Ontheotherhand,mallsinthecapitalhaveamorediversemixwithbrandsacrosscategoriesestablishingpresenceinkeyshoppingcenters.
GlobalRetailers-DelhiversusMumbai
DelhiandMumbaiareurbanagglomerationshousingthelargestpopulationbasesinthecountry,at17.2millionand12.5millionrespectively.Notonlydothecitieshavehighpopulationbasesbutarealsohometothewell-heeled,whoareexposedtoglobaltrends;resultingingreateracceptanceofproduct/cuisineofferingsbysuchbrands/operators.DelhihasanaveragehouseholdincomeofaboutINR1millionp.a.whileMumbaihasahouseholdincomeINR1.2millionp.a.;bothbeingthetwohighestinthecountry.SinceDelhiisthenationalcapitalwhileMumbaiisthefinancialcapital,bothcitiesattractconsiderableforeigntouristinfluxaswellasdiplomatandexpatriatepopulation.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 6
Source: CBRE Research, Q2 2015.
Category wise Split of Global Entry/Expansion(2012-2015 YTD) - Delhi
(Figure 8)
Category wise Split of Global Entry/Expansion(2012-2015 YTD) - Mumbai
(Figure 9)
44%
13%
13%
13%
2%
Coffee and Restaurants Homeware and Department Stores Luxury and Business
Specialist Clothing Consumer Electronics
Mid Range Fashion
Others
38%
17%15%
15%
15%
13%
1%1%
Source: CBRE Research, Q2 2015.
Source: CBRE Research.
Coffee and Restaurants Europe Americas Asia Pacific EMEAHomeware and DepartmentStores
Luxury and Business
Specialist Clothing
Consumer Electronics
Mid Range FashionOthers
0
5
10
15
20
25
30
35
40
Mumbai New Delhi
Segment wise break up of New Entrants since 2012
(Figure 10)
No of brands
Country of Origin of New Entrants since 2012
(Figure 11)
(%) Share
0%
20%
40%
60%
80%
100%
Mumbai New Delhi
Whenwecomparebothcitiesintermsofglobalretailerfootprint,Delhileadsintermsofglobalretailerexpansion/entriesofnewentrantssince20125,and2014wasaparticularlygoodyearwithmorethan42leadingbrandsentering/expandinginthecity.
WhilecoffeeshopsandrestaurantsareslightlymorepopularinMumbai,mid-rangefashionbrandssuchasZaraandGAParemorepopularinDelhi,withretailersinthesegmentpreferringtoenterthecountrywithastoreinthecapital.
Delhihasattractedaround35newbrandssince2012,includingthelikesofBvlgari,RobertoCavalli,ChristianLouboutin,LaPrairieandBCBGMaxazria.Ithasalsoattractedthehighestnumberofluxuryentrants(12)inthepastthreeyears.
5. Cumulative entries/expansions since 2012 to 2015 YTD
© CBRE Ltd. 20157 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
Source: CBRE Research, Q2 2015. Source: CBRE Research, Q2 2015.
Spatial Spread of Malls
(Figure 12)
Grade-Wise Break up of Malls
(Figure 13)
EAST DELHI
16%
NORTH DELHI
25%
SOUTH DELHI
38%
WEST DELHI
21%
PRIME INVESTMENTGRADE
SEMI INVESTMENTGRADE MALLS
INVESTMENTGRADE MALLS
36%
34%
30%
Source: CBRE Research, Q2 2015. Source: CBRE Research, Q2 2015.
Grade Wise Split of Malls across Micro-Markets
(Figure 14)
Rentals Trends across Key Markets in Delhi
(Figure 15)
0
1,000
2,000
3,000
4,000
5,000
South Delhi North Delhi West Delhi East Delhi
(000,Sq.ft) (INR/sq. ft./month)
Investment Grade MallsSemi-Investment Grade MallsPrime Investment Grade
0
100
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South Delhi West Delhi North Delhi East Delhi
OrganizedRetailinDelhi–SpreadandCharacteristics
TheorganizedretailmarketofDelhiiscurrentlyspreadacrossnearly11.4millionsq.ft.withabout57malls/mixed-useprimeinvestment,investmentandsemi-investmentgrademalls#.PrimeinvestmentgradespaceisconcentratedinSouth(SaketandVasantKunj)andWestDelhi(RajouriGardenandShivajiPark).
Ascanbeseenabove,SouthDelhihasthehighestconcentrationofmallsaccountingfor~38%ofthetotalretailstockofDelhi.Themicro-marketnotonlyhasthehighestorganizedstock,butalsothehighestpercentageofprimeinvestmentgrademalls(73%),therebyjustifyingitspopularityamongretailersandconsumersalike.WhileotherlocationsinDelhicatertolocalcatchmentneeds,mallsinSouthDelhiarefrequentedbyresidentsofsuburbanlocationsofGurgaonandNoidaaswell,sincethesemallsserveaslifestyledestinations.
#. Please refer to notes for definitions.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 8
Source: CBRE Research, Q2 2015. Source: CBRE Research, Q2 2015.
Percentage break up of mall space in Delhi
(Figure 16)
Split of mall space as per operation model
(Figure 17)
(%)SALE + LEASE
22%
SALE
27%
LEASE
51%
0%
20%
40%
60%
80%
100%
LEASE SALE SALE + LEASE
Investment Grade MallsSemi-Investment Grade MallsPrime Investment Grade
SuccessFactorsforShoppingCenters
OperationModelsWhilethecityhasthehighestnumberofshoppingdevelopmentsascomparedtoanyothermetropolitancityinthecountry,almost49%oforganizedspaceinthecityconstitutesofdevelopmentsthathaveadoptedstratasold/sale+leasemodel.Morethan5.6millionsq.ft.ofretailspaceinDelhiisstratasold,impactingthetenantprofileandsuccessofashoppingmallasawhole.
Strata-solddevelopmentshavetraditionallywitnessedchaoticplacementofbrands(dependingonwhicheverbrandleasesspaceofanyindividualinvestor),rentalinstability(differentrentalsquotedbyinvestor/developer)andsubsequenthighvacancylevelsandlowerfootfalls.Almosthalfoftheorganizedspaceinthecityfollowasale/sale+leasemodel,andischaracterizedbyanunfavorablebrandmixleadingtohighvacancies.Almost68%ofthesemi-investment/investmentspaceinthecityfallsunderthesale/sale+leasemodel,highlightingtheinefficienciesoffollowingasalemodel.Thelease-onlymodel,ontheotherhand,hasbeenadoptedby84%ofprimedevelopmentsinthecity,whichhasbeenoneoftheleadingfactorsinthesuccessofthesedevelopments.
FlexibleLeaseAgreementsThenatureofleasetermsbetweentheretailerandlandlordhasevolvedtobemuchmorethanalegalbindingcontractinrecenttimes.Thedaysofleasingspaceforalumpsomeamounthavelonggone,havingbeenreplacedbyadirectlinkbetweenrevenuesgeneratedandrentpaidbytenants.Themostpopularformsof‘revenuesharing’includepayinga‘minimumguarantee’and/ordisbursingapre-decidedpercentageshareofrevenuestothedeveloperonamonthlybasis.Insomecases,developerschargestaggeredrentalswherenewentrantsaresometimesoffereddiscountsintheinitialyear,tobeeventuallymadeupoveracertainperiodoftime.Withthejointinterestoftheretaileranddeveloperinthetenant’srevenues,suchleasetermshavegonealongwayincontributingtothesuccessofmallsovertheyears.
ProvisionofSupportFunctionsProficienthandlingofsupportmalloperationshasalsobecomeincreasinglyimperativeinrecenttimes.PrimemallsofferingservicessuchasanATM,valetservices,feedingroomsandincertaincasesfreeWi-Fi,taxiandpharmacyservices.Consumershavethusbeguntoinevitablyviewvisitingsuchmallsasaformofentertainment,easilyspendingaugmentedtimeinthemall,ultimatelyleadingtoincreasingrevenuesonthebackof‘impulse’purchases.
© CBRE Ltd. 20159 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
EfficientMallManagementDiligentmallmanagementandastrategicbrandmixhaskeptmallshighontheradaroftopglobalretailers,severalchoosingtocommenceoperationsinthecountrybyopeninganoutletinthesedevelopments,particularlySouthDelhimalls(inSaketandVasantKunj),whicharetoutedassomeofthebestmallsinthecountry.Mallmanagementteamsatthesemallsdecideonthetenantmix,placementofretailstores,revenuetargetstodecidecontinuationofleaseagreements,andpromotions.Alotofthoughtalsogoesindecidingthebrandmixofthefoodcourt-akeydrawforfamilies.Forinstance,MySquare,thenewlyrenovatedfoodcourtatSelectCityWalkmallhasatouchscreenattachedtoeachtableforordering,keepingatrackoftheorderstatusetc.andhasbeenpositionedasapremiumfoodcourt;therebylikelytoresultingreaterfootfallsforthemall.
StrategiestoRemainRelevantinanEverChangingRetailEnvironment
InDelhi,thesustainedsuccessofdevelopmentsfollowinganoptimizedoperationsstrategyisquitenoteworthy.Moreprecisely,oneshouldcloselylookatthedynamicstrategiesadoptedbythemostsuccessfulshoppingcenterstosustainandfurtherincreasefootfalls.Effectivelyimplementingsimilarconceptscouldcontributetorevenuegrowthofthelesserperformingmallsandprovideashiftinperceptionofthese‘nonpopular’mallsinthemindoftheconsumer.
ExtensiveMarketResearch:Itisimperativethatamallisabletodefinethekindofcatchmentitislikelytocatertoanddecideonitspositioning—mass,affordableluxuryorluxury.Therehastobesynchronizationbetweencatchmentandoccupiermixaswellascleardefinitiononthetypeofmallanditstargetcustomers.Developersneedtobecertainwhetheritwillbeanentertainmentmall,suchasGreatIndiaPlace,Noida,afashionandlifestyledrivenmallsuchasSelectCitywalk,oradestinationmall.Mostmallsareunabletoattractcrowdsbecauseoftheinabilitytodefinethemalltype,lackofinformationonclienttypeandselectionofwrongpartners.IfamallplacesaZarawhilethecatchmentdemandsWestsideorviceversa,themallwillfailtoattractfootfalls.
Seasonal/ThemedEvents:Anemergingtrendofseasonalorthemedeventsheldatmallshasprovedtobeadefiniteattractionforcrowdstopourinduringsuchevents.TheseeventsincludethosecelebratingtraditionalfestivalssuchasDiwali,HoliorChristmas,whereinthecustomerinterestarisesfromretailersnotonlystockingappropriateproducts,butelaboratedecorationsacrossthedevelopmentwhichfeedintoanattractiveenvironment,addingtothefestivemoodofthebuyers.
InnovativeProductLaunches:Sucheventsgenerallyrevolvearoundaparticulartheme,suchastargetingaselectaudience(womenorchildreninparticular)forproductlaunches.Forinstance,eventssuchasthe‘TreasuryofTrousseau’atDLFEmporiowillallowcoutureweddingcollectionsofleadingdesignersattheevent.Selectmallsalsohostseveral‘foodfestivals’orbooklaunchesattheirdevelopments.Theshortintervaloftheseeventsgenerallycontributestoitsnovelty,increasinglyensuingmallvisitsbeingviewedas‘cultural’events.
PopupStores:Implementingtheconceptof‘pop-upstores’oratemporaryshophasalsocontributedtospurtsinrevenuegrowth.Forinstance,DLFPromenadeallowsforpop-upstoresbyonlinefashionretailers,amongstothers.Productsofsuchstoresserveasawelcomedigressionintheregularmerchandiseofadevelopment.Theopportunityforoutletstooperateforashortdurationinprimemallsalsogreatlybenefitsonlineretailersorsmallscaleentrepreneursinexposingnicheproductstoanextensiverangeofshoppers.Furthermore,thesuccessofsuchstoreswidensadeveloper’sexperienceingaugingconsumersentiments,providingabaseforevolvinganimprovedbrandmix.
LeveragingSocialMedia:Anotherdistinguishingfactorofprimemallsistherigorousmarketingandpromotionalstrategiesadoptedbythesedevelopments.Suchmallsrapidlyrecognizedtheimportanceofremainingactiveviasocialmediaforums,therebyprovidingeasyaccesstoanyinformation(events,sales,storelaunches,etc.).Aninteractive,detailedandupdatedwebsite,forexample,easesplannedpurchasingorfrequentingaparticularrestaurantoverhighstreet/stand-aloneplacesonseveraloccasions.Moreover,suchastrategyenhancesthepositioningofadevelopmentasadestinationforothernewretailersduetothemall’sincreasingpopularity.
RegularCustomerFeedback:Mallsneedtocollectfeedbacksfromvisitorstoberelevantinallseasons.Theoperatormustdoextensivemarketresearchandknowthetargetcustomersandbrands.Leadingmallshavemaintainedtheirrelevancethroughsoftservicesandlaunchingnewbrandstokeepcustomerscomingback.Forinstance,primemallsinthecityareabletomaintaintherightbrandmixthatitkeepschurningtostayrelevanttoitstargetcustomers.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 10
HIGH STREETS
1. KAROL BAGH | MAJOR BRANDS: MCDONALDS, SUBWAY, KFC ETC2. RAJOURI GARDEN | MAJOR BRANDS: DUNKIN DONUTS, KFC, SUBWAY ETC3. CONNAUGHT PLACE | MAJOR BRANDS: STARBUCKS, NANDO’S, DUNKIN DONUTS, BURGER KING, ETC4. KHAN MARKET, PANDARA ROAD | MAJOR BRANDS: BARCELOS, HARRY’S, VERO MODA ETC5. BASANT LOK | MAJOR BRANDS: GLORIA JEAN'S COFFEES, LE MARCHE-SUGAR AND SPICE, BARISTA ETC6. SOUTH EXTENSION | MAJOR BRANDS: LACOSTE, TOMMY HILFIGER, MCDONALDS ETC7. M BLOCK GREATER KAILASH | MAJOR BRANDS: ESPIRIT, BENETTON, COFFEE BEAN AND TEA ETC8. HAUZ KHAS | MAJOR BRANDS: SOCIAL, MIA BELLA, THE BEER CAFE9. NEHRU PLACE | MAJOR BRANDS: BURGER KING, STARBUCKS, DUNKIN DONUTS
ORGANIZED RETAIL
1. DISTRICT CENTRES AT SHIVAJI PLACE: RAJOURI GARDEN, SUBHASH NAGAR MALLS: CITY SQUARE MALL, TDI MALL, WEST GATE MALL, PACIFIC MALL | MAJOR BRANDS: ZARA, JACK AND JONES, VERO MODA ETC2. ROHINI AND PITHAMPURA: MALLS: METRO WALK MALL, M2K MALL, D MALL | MAJOR BRANDS: PANTALOONS, REEBOK, NIKE, ETC3. NETAJI SUBHASH PLACE DISTRICT CENTRE: MALLS: PEARLS OMAXE MALL, NORTH SQUARE MALL, D MALL MAJOR BRANDS: HALDIRAM, NIRULAS, KALPANA, ETC4. DISTRICT CENTRE AT VASANT KUNJ: MALLS: DLF PROMENADE, DLF EMPORIO, AMBIENCE MALL, BRANDS PRESENT: LOUIS VUITTON, BULGARI, ZARA ETC5. DISTRICT CENTRE AT SAKET: MALLS: SELECT CITY WALK, DLF PLACE, MGF METROPOLITAN MALL MAJOR BRANDS: ZARA, GAP, ALDO, GUESS, CHARLES & KEITH, ETC6. EAST DELHI: MALLS | CROSS RIVER MALL, V3S EAST CENTRE | MAJOR BRANDS: PANTALOONS, HALDIRAM, FUN CINEMAS, ETC
NORTHEAST DELHI
EASTDELHI
CENTRALDELHI
SOUTH DELHI
SOUTH WEST DELHI
NORTH WESTDELHI
NORTHDELHI
12
3
4
5 67
89
NH1
NH10
NH8
NH2
NH24
1
2
3
4
5
6
Delhi Retail Spread (Organized Retail & High Streets)
Source: CBRE Research, Q2 2015.
(Figure 18)
© CBRE Ltd. 201511 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
What’s Cooking in Delhi’s Shopping Cauldron?
TheFoodandBeverage(F&B)sceneintheCapitalhasalwaysbeenvivacious,howeverthepastfivetosixyearshaveseenasignificantchangeinthewayDelhi’srestaurantslookandserve.Earlier,themarketusedtobeclearlydemarcatedbetweenfinediningrestaurantsandvalue-for-moneyfamilyeateries.FastfoodjointssuchasNirulasandWimpy’swereextremelysuccessful,butthemarketlackedrestaurantsthatofferedglobalcuisineswiththerightambience.MalchaMargwasoneofthefewmarketsthathadanF&B“cluster”ofsorts,andalsohousedrestaurantsthatinawayexperimentedwiththeircuisinetocatertothenearbyexpatriatepopulation.Today,thelinesareblurringfastwithanewerbreedofrestaurantsfillinginthegap.Ambiencehasbecomeagamechangerascustomersarenolongeronlyinterestedinthequalityoffood,butplacesignificantemphasisontheoverallambienceandqualityofserviceaswell.Delhi’sstandalonerestaurantshavecomealongwayfromservingpredominantly‘NorthIndianFood’toofferingworldcuisinessuchasJapanese,Chinese,Italian,Mexican,French,andMediterranean,amongothers.Finedining,internationalconfectionaryandbars,whichusedtoberestrictedtofivestarhotelsalone,hastodayspilledoutintoourstreetsandshoppingcenters,whicharelinedwithstandalonecasualdinerestaurants,pubs,sportbars,lounges,nichebakeries,cafes,etc.AkeyretailhubthatdeservesmentionisDLFCyberhubinGurgaon(inclosevicinitytoDelhi).ItisacontiguousF&Bdestinationspreadacross200,000sq.ft.inDLFCybercity.Theretailpodium,currentlyoneofakindinthecountry,boastsofhousingnearly50operatorsacrossmultipleformatsandcuisines,redefiningtheculinarylandscapeacrossNCR.
AslucrativeastheDelhiF&Bmarketis,ithowevercomeswithitsshareofcomplexitiesandchallenges.Operatorsareposedwithquestionssuchashowmanyoutletstolaunch,whichmicro-markettooperatein,whichexpansionstrategytoadopt,whethertobelocatedonahighstreetorinamall,amongothers.Thissectiondiscussesthisandmoreindetail.
HowManyOutlets?
Thenumberofoutletswithinacityhasadirectcorrelationwithconsumerproximityandticketsize.Mostmassmarketrestaurantshavechosentoexpandwithnumerousoutletswithinthecity,withahealthymixofstoresinmallsaswellasacrosshighstreets.Incomparison,casualdiners/clubsgenerallytendtolimittheirpresencetoprimelocationsofeitherhighstreetsorshoppingcenters.Forinstance,Starbucks,aleadingcoffeechain,openedatleast12outletsinitsfirstyearofoperationsacrossleadingmallsandhighstreetsintheNationalCapital,ascomparedtotheAmericanburgerchain,JohnnyRockets,whichchosetoopenoutletsinthreeprimeshoppingmallsintheCapital.QuickServiceRestaurant(QSR)brandsareabletofollowacarpetbombingapproach,ensuringagreaterfootprint.Thisislargelypossibleasthespaceuptakebysuchbrandsislowerthanthatneededbyalounge/casualdiningoutlet.FoodcourtsalsoprovidegoodexpansionopportunitiesforQSRsthatarenotavailabletoacasualdiningrestaurantoralounge.
WhichMicro-Market?
Owingtoitsvastgeographicalspreadandalargenumberoftraditionalhigh-streetsandotherretailzones,DelhioffersF&Bretailersnumerouslocationopportunities.Restaurantsarewidelyscatteredacrossthecityinestablishedhigh-streets,shoppingmalls(mostlydevelopedwithindistrictcenters),andotherpopularretailing/transportation/commercialhubs.SouthDelhiisonemicro-marketthataccountsfornumerousnotableF&BclustersincludingHauzKhasVillage,GreaterKailash,SafdarjungDevelopmentArea,DefenceColony,GreenParkMarketaswellastheonlyfoodmallinthecity-Epicuria.HauzKhasVillageandEpicuriahaveemergedasexclusivehubsforclubs/pubsandcasualdiningrestaurants,withnumerousoptionsavailableinclose
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 12
proximity.Elsewhere,theCentralBusinessDistrict(CBD)ofConnaughtPlacehasalsobeengainingpopularityasaprominentF&Bdestination;largelyowingtoitscentrallocation,proximitytocommercialestablishments,availabilityofadequatefloorplates,aswellasextensivemetroconnectivity.
ProminentglobaloperatorsthatopenedoutletsinSouthandCentralDelhiincludeStarbucks—openingitsfirstoutletinConnaughtPlace;andNandoswhichopeneditsfirstoutletinSouthDelhi,followingupwithastoreinConnaughtPlace.OtherlessprominentyetestablishedretailclusterswhichaccountforasignificantshareoftheF&BpieinthecityincludeWestDelhi(RajouriGarden,BKDuttMarket,ClubRoad(PunjabiBagh))andNorth,North-WestDelhi(NetajiSubhashPlace).However,mostoftheseclustersaredominatedbygoodqualityalbeitdomesticchainswithlimitedpresenceofglobalplayers.
HighStreetorShoppingCenter?
ThedecisionofanyF&Boperatortolocateonahighstreetorashoppingcenterhasgenerallybeendependentonthetargetcatchmentandtheassociatedrealestateandmaintenancecosts.Forinstance,mostmassmarketrestaurants(mainlycoffeechainsandfastfoodoperators),typicallyprefertolocateacrossaplethoraofhighstreetsaswellasshoppingcentersacrossvariouspartsofthecity.Thisisincontrasttocasualdinersorclubs(cateringtoanicheclientele),whichpreferpremiumshoppingcentersorleadinghighstreets.Anotherkeyfactoristhestoresizeandalterationsallowed.Whilealterationsareincorporatedacrossbothformats,it’stypicallyeasiertomodifystoresizesinashoppingcentervis-à-visahighstreet.MalldevelopersalsoconsiderF&Basanimportantpartoftheiroveralldevelopmentandzoningstrategyfortheirproperties,graduallyallocatingalargersharetoF&Boperatorsoverthepastfewyears—typicallyallowingforbetterpositioningforF&Bretailerswhileresultinginmorefootfallsforthemall.
ExpansionDecision–Intra-CityorInter-City?
Thedecisionofexpandingwithinanycityvis-à-visexpandingtoothercitieshasbeentypicallydependentonoperatorsalreadyhavingacentralkitchenoranestablishedback-endchain,resultingineaseofopeningmultipleoutletsinquicksuccession.Americanburgerchain,DunkinDonuts,expandedwithinNewDelhi,andopenedatleastfiveoutletsbeforemovingtoMumbaiduetohighinvestmentsmadeforsettingupoperationsinthecapital.Operatorsgenerallylookatleveragingexistingcapacitybeforemovingovertoanothercity.However,theimpactofopeningoutletsacrosscitiesleadstoanationalbrandpresence.GlobaloperatorssuchasStarbucks,BurgerKing,andPizzaExpresschosetoopenoutletsacrosskeycitiessuchasNewDelhiandMumbaiwithinaspanofafewmonths.WhenBurgerKingbeganoperationsfromDelhilatelastyear,itannounceditsintentiontoopen12outletsinthreemonths—largelyinDelhiandMumbai.Certainglobalplayers,however,lookataregionalfocus—Wendy’s,forinstance,hasstatedthatthebrandwillfirstlookatNorthIndiabeforeexpandingtootherpartsofthecountry.
Delhi – The F&B Capital of the CountryWheneverthereistalkofsettingupF&Boperations–generallyDelhiandMumbaiemergeasthefirsttwonamesthatanyleadingoperatorthinksof.InordertounderstandtheF&Bdynamicsacrossthesetwoleadinghubs,CBREconductedadetailedanalysisofpremiumhighstreets/shoppingcentersinthetwocities,tooutlinethefootprintofqualityF&Boperators.WhiletheactualF&Bfootprintinthecitiesismuchhigher,howevercertainfilterssuchaslocation,averagecostofameal,storesizeandrestaurantpositioninghavebeenappliedtoarriveattheanalysis.6Morethan800restaurants/pubs/cafes/QSR’swereconsideredacrossprominenthighstreets/mallsforarrivingatthefollowinginferences.Globalaswellasleadingdomesticoperatorswereapartofthisanalysis.
6. Filters such as store size, average cost per customer, restaurant positioning have been put to arrive at the number of restaurants for the analysis. Barbeques and small take away joints have been excluded. Restaurants in five star hotels have been excluded. Please refer to footnotes for further details.
© CBRE Ltd. 201513 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
High Street Shopping Centre
Number of F&B operators in Delhi and Mumbai
Source: CBRE Research, Q2 2015.
(Figure 19)
No. of Outlets
0
100
200
300
400
500
600
Delhi Mumbai
Source: CBRE Research, Q2 2015.
Casual Dine Restaurants (CDR) Cafés Fine Dine Restaurants (FDR)
Quick Service Restaurants (QSR)Pubs and Lounges
41% 41%
22% 24%
4% 6%
13% 10%
20% 19%
Category wise Split of Restaurants in Delhi
(Figure 20)
Category wise Split of Restaurants in Mumbai
(Figure 21)
F&BFootprint–DelhiandMumbai
WhilebothDelhiandMumbaihaveathrivingF&Bsector,thesector’sgrowthcurvehasbeendifferentinbothcitiesduetotheirinherentlydiversecharacteristics.GovernmentauctionoflandparcelsandrelativelyhigheravailabilityoflandparcelsinDelhiresultedin‘clustergrowth’ofshoppingcentersandhighstreetsacrossdifferentzonesinthecity.Ontheotherhand,paucityoflandparcelshaveledtoafarmoresporadicdevelopmentoftheretailsectorinMumbai,resultinginshoppingcentersbeingpepperedacrossthecity.
Asperouranalysis,Delhihousesmorethan5007restaurantsacrossleadinghighstreets/mallsascomparedtoabout300restaurantsinMumbai.DelhihasnumerousF&Bclusters,howeverthemostdominantandpopularjointsareinSouthDelhi—marketssuchasHauzKhas,GreenParkandSafdarjungDevelopmentAreaareinverycloseproximityandhousemorethan80suchrestaurants.Ontheotherhand,prominenthighstreetsinMumbaisuchasColabaCausewayandLinkingRoadhouseasignificantnumberofdomesticandlocalF&Boutlets,buttheseoptionsarewidelyscatteredandalargemajorityofthem(whilebeingpopularlocally)cannotbeclassifiedasaproperrestaurant/casualdining.AlargeproportionofeateriesinColabaforinstancewouldbelocal-bredtakeaways,barbequesandquickbiteformats.
7. Please refer to end notes for a list of the markets and methodology used to arrive at the number of restaurants
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 14
Category wise split of Restaurants across High Streets and Malls
% Share % Share
0%10%20%30%40%50%60%70%80%90%
100%
Delhi Mumbai
High Streets
0%10%20%30%40%50%60%70%80%90%
100%
Delhi Mumbai
Shopping Centers
(Figure 22)
Source: CBRE Research, Q2 2015.
Casual Dine Restaurants (CDR) Cafés Fine Dine Restaurants (FDR)
Quick Service Restaurants (QSR)Pubs and Lounges
Intermsofcategories,casualdiningrestaurantsleadinDelhiwithmorethan40%ofoutletsbelongingtothiscategory,followedbycafes(24%).ThetrendsarealmostsimilarinMumbai,withbothcitieshavinganalmostidenticalsplitofrestaurantcategories.Delhiisalwaysreadytotrynew-fangledanddifferentconcepts;asaresulttherehasbeenadilutioninthedifferencesacrossformatsinrecenttimes.Innovationandreinventionincuisine/ambiencehavebeenthebasicthemesfordomesticchains,leadingtoseveralsuccessfulgastronomicexperimentsoriginatinginthecity,includingIndianAccent,FarziCaféandSodaBottleOpenerwala,amongstothers.ThesechainshavesuccessfullyincorporatedIndian-fusionintheirofferings,therebyencouragingtransformationinthetraditionalIndianpalate.
CasualDineRestaurantsProminentinHighStreets,CafesdominateShoppingCenters
WhileDelhihighstreetsdohaveanalmost75%higherfootprintofF&BbrandsthanMumbai,however,oncomparingkeyhighstreetsacrossDelhiandMumbai,asimilarsplitofF&Boperatorsemerged.ThepresenceofCDR’sdominatesthesedestinations—Delhi(51%)andMumbai(50%)—followedbycafé’s—Delhi(17%)andMumbai(15%)—.FDR’swhilepreferringhighstreetsovershoppingcenters,asexpectedconstitutedtheleastsharesinbothcities,—Delhi(5%)andMumbai(9%)—largelybecauseofthefactthatmostfinediningrestaurantsinthesecitiesarestilllocatedinfivestarhotels.
Intermsofmallsalso,theanalysisrevealsthatDelhihasanedgeofmorethan75%overMumbaiintermsofF&Bfootprint.However,mallshaveaslightlydivergenttrendascafé’semergeddominantinshoppingcentersinbothcities;withcafesforming37%oftherestaurantsinMumbaishoppingcentersascomparedto30%inDelhi.QSRsweretheotherdominantcategory,withDelhileadingslightly.Closeto32%oftherestaurantsinmallsbelongtotheQSRcategory,withMumbaistandsat28%forthesamecategory.
GlobalF&BOperators–DelhiandMumbai
TheemergenceofDelhiasanattractivedestination,particularlyforglobaloperatorscanbewitnessedwiththeincreasingnumberofinternationalchainsmakingtheirforayand/orexpandingwithinthecity.Asshowcasedonthetimeline,19operatorsopenedtheirfirststoreintheCapitaloverthepastthreeyears,transformingformats,qualityandchoicesofferedacrossvariouspricepoints.
© CBRE Ltd. 201515 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
TheprominenceofDelhiasanF&BdestinationcanbegaugedfromthefactthatDelhihousesabout100globaloutletsascomparedtomorethan60inMumbaiacrossleadingshoppingcentersandhighstreets.MostglobalF&BoperatorswerelocatedinshoppingcentersinbothcitiesofDelhi(73%)andMumbai(80%),revealingthecomfortofsuchretailerstooperateoutofshoppingcentersoverhighstreets.
F&B Timeline of Delhi
(Figure 23)
Source: CBRE Research, Q2 2015.
2012 2013 2014 2015 YTD
American Fast Food Chain Dunkin Donuts entered into the country and opened 4 outlets by the end of the year.
European operators continue to make their foray into the country with French restaurant B Bar and luxury operator Roberto Cavalli Café.
American burger chains Burger King and Johnny Rockets enter into the country, and open 2 outlets each by the end of the year.
Restaurant chain Barceló's entered into India by opening an outlet in Delhi.
American casual diner Chili's opened their first outlet in the city.
American coffee chain Starbucks opened its first outlet in the city and opened 3 outlets by the end of the year.
Global F&B Chains including Yauat-cha, La Tagliatella, Harry's and Krispy Kreme their first outlet in the capital city.
Pizza Express , Movenpick, Royce Chocolates and Nandos open their first outlet in Delhi.
Taco Bell and Sbarro open their first outlet in Delhi.
Pita Pit opened its first two outlets in Delhi.
Fast Food Chain Dunkin Donut expanded their footprint by opening 5 more outlets.
Coffee Bean, Tea and Leaf expanded within the city and opened another outlet.
Restaurant chains such as Harry's, Krispy Kreme and Chillis continued to expand within the city.
Fast Food Chain Dunkin Donut expanded their footprint by opening 5 more outlets.
ENTR
Y IN
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ENTR
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© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 16
Thetrendacrossmallshoweverwasmoreuniform,withglobalF&Boperatorsdisplayingasimilarmixacrosscategories.Whilecasualdiningstilldominatesmallsacrossbothcities,butthepresenceofglobalpubs/loungesislimitedascurrentlythissegmenthasalargerpresenceofdomesticoperators.
F&BPlayersFaceNumerousChallenges
ThecityallowsF&Boperatorswithtremendousgrowthopportunities,butlikeanyotherbusinessitalsohaschallengesthatplayersneedtotackle.Apartfromtheusualfeasibilityconcernsregardinglocation,size,set-upoperations,relevantconsumerbaseandcosts,F&Boperatorsfacetheirownsetofchallengeswhilechoosingalocationforanewoutlet.
LackofInvestmentGradeSpace:Theavailabilityofinvestmentgradespacehasbecomeacrucialfactorindeterminingthelocationofanoperatorinrecenttimes.Withonlyathirdofmallsinthenationalcapitalconstitutingprimeinvestmentgradespace,negligiblevacancylevelsinthesedevelopmentshaveledtooperators(particularlydomestic)choosinghighstreetdestinationsforoperatingwithinthecity.
FindingF&BCompatibleSpace:Settingupoperationsacrossanyformatrequirestheformattobe‘F&Bcompatible’intermsofanadequateback-endchain,productsupply,logistics,availabilityofingredients,storagefacilities,machineryandsupportservicessuchasgassupply,drainageandexhaustsystems.However,primeshoppingcentresofteneaseupthesettingupoperationsforF&Bchains,withmostdeveloperswillingtotakeup~70%ofthecostsinvolvedinordertomakeastore‘F&Bcompliant’.
DesirableFloorPlates:F&Bplayers,especiallyonesinthecasualdining,pubsandfinedinecategoryrequireaminimumfloorsizetoprovidethedesiredexperience.Barsneedtoseparatethedrinkingareafromthediningwhileclubswithliveperformancesneedtohaveseparatepodiums/performanceareas.MosthighstreetsinDelhidonothaveadequatefloorplatestoaccommodatesuchplayers.Anotherproblemwithhighstreetsremainsthelackofdesiredceilingheights.Mostmallsprovide4.5metresofceilingheight,whereashighstreetsareusuallyrestrictedto3.5metres,whichdoesnotgivethedesiredambianceforanF&Boutlet.Asaresulteithertheplayerendupcompromisingonthedesiredlayoutortakesuptwofloorsinthesamebuilding.
TailoringMenusasperIndianPalates:Whilethelaunchofglobalbrandsinanewcountryrequiresanunderstandingofindigenousconsumertaste,F&BoperatorsenteringinIndiahavebeenknowntosignificantlycustomizetheirmenus.Severalrestaurantshavehadtointroduceexclusivevegetarianmealsinordertobeeasily
Category wise split of Global Operators on High Streets and Malls
% Share % Share
0%
20%
40%
60%
80%
100%
Delhi Mumbai0%
20%
40%
60%
80%
100%
Delhi Mumbai
(Figure 24)
Source: CBRE Research, Q2 2015.
High Streets Shopping Centers
Casual Dine Restaurants (CDR) Cafés Fine Dine Restaurants (FDR)
Quick Service Restaurants (QSR)Pubs and Lounges
AninsightintoglobalF&Boperatorfootprintsacrosshighstreetsinbothcitiesrevealedthecapital’shighstreetclustergrowthattractingglobaloperatorsacrossdifferentcategories,ascomparedtohighstreetsinMumbaiwhichcurrentlyhousespredominantlyglobalCDRsandQSR’s.
© CBRE Ltd. 201517 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
acceptedbyIndianconsumers.McDonalds,DunkinDonuts,Chili’sandJohnnyRocketsamongstotheroperatorsareexamplesofrestaurantssuccessfullyadaptingtheirmenustosuittheIndianconsumerpalate.
SourcingofRawMaterials:AvailabilityofrawmaterialsfortheseglobalcuisinerestaurantscontinuestoremainakeychallengefacedbyF&Boperators.Forinstance,availabilityofmeatandotheringredientsforcuisinessuchasFrench,Italian,Portuguese,andJapanesecanprovetobeabarrierinlocatingacrossformats.Butoperatorshavefoundawayaround–themenushavebecomeseasonalandhavebeeninfusedwithlocalingredients;whereverpossible.
HighTaxes:FoodtaxesinDelhiareamongthehighestascustomersendupshellingupmorethan30%effectivetaxwhichincludesservicecharge(acommonpracticenow),servicetaxandvalueaddedtax.Therecentrevisionintheservicetaxfrom12.36%to14%isgoingtoleadtoafurtherincreaseineffectivetax.ThisissharpincomparisontoothercitiessuchasHyderabad,PuneorBangalore(whereVATchargesonbeveragesandalcoholaremuchlower).TheprohibitiverentalsinDelhialsoaddfurtherpressureonoperatorsforarrivingattherightpricepoints.
However,OpportunitiesLoomLarge
BeverageBoom:Beveragesarenolongerasideshow.Restaurantsareintertwiningbeveragesasanintegralpartoftheirmenuandnotjustsomethingtobehadalongsidefood.Restaurantsaremakinginnovationsinbothalcoholicandnon-alcoholicbeveragestoensurethattheseremainakeydraw.Sincealcoholicbeveragesisahighmarginbusiness,whichinturndrivesupfoodsalesaswell(withconsumersspendingmoretimeatthetable),itisbeingleveragedbyrestaurantstodriveupsales.
ChangingTastePallets/AcceptanceofGlobalCuisines:TheDelhiconsumerhasbeenevolvingfastandisincreasinglywillingtotryandadapttoglobalcuisines.Inthepast,nichesegmentssuchasJapanesecuisine,Italiancuisine,coastalcuisine,usedtoberestrictedtofive-starrestaurants,however,suchrestaurantshavenowbecomecommonplace.Confectionarywasalsotheforteoffivestarhotelbakeries,however,thecityisnowflakedbynicheconfectionaries(Elma’s,L’Opera,BigChillCakery,etc.).Ashealthconsciousnessisincreasinglykickingin,healthyeatingrestaurants(LeanChef,YogaCafé)havesprungupinthepasttwoyears,cateringtotheincreasinglycosmopolitancustomerintheCapital.
FormatInnovation/Flexibility:Justhavingmulti-cuisinerestaurantshasnowbecomepassé,'concept'restaurantsareinnovatingnewerformatssuchas‘café+bar’ora‘bar+lounge’,amongothers.Severalclubs/pubsallowstand-upcomediansalong-slidemusiciansandotherartists,whilebookcaféssuchasChaBarandCaféTurtleinCentralDelhiensurelongervisits,resultinginahigherspendpercustomer.Social,apubinHauzKhasVillageisanotherinstanceofprovidingvalueaddedservices,whichisamongstthefirsttoofferqualityworkspaceoptionsalongwiththediningexperience.Therecentallowancebythegovernmenttoallowformicro-breweriestosetupinDelhiwillallowformoreinnovationtothecapital’sfoodscene.
NewModesofCustomerEngagementAvailable:Socialmediaisbecomingakeymediumofinteractingwithclientsandcreatebrandawareness,therebyallowingforagreaterbuzzaboutthebrand.Itnolongertakesagesforreputationstoformassocialmedia(Facebook,Twitter,Zomato,Burrp)allowsforwordtotravelfastonagoodrestaurant.Asphotosaresharedandpublishedin‘realtime”alongwithnumerouswebsitesthathaverestaurantreviewsandmenus,acustomerisabletogetanalmostvirtualvisit,evenbeforesteppingintotherestaurant.Thesemediumsareleveragedeffectivelyallowingbrandstoinformconsumersaboutexistingandnewproducts,storeopenings,mediacoverage,promotionsandoffers.
TappingTransitSystems:Delhihaswitnessedarapidtransformationinitsnetworksystemswithdevelopmentofthemetroaswellastheredevelopmentoftheairport.ThemetronetworkofDelhiiswidespreadandisunderfurtherexpansion.Notonlydoesitallowforgreateraccesstoexistinghighstreetsandmalls,butalsoprovidesscopefordevelopmentofF&Binandaroundthemetrostations.TheT3ontheotherhand,hasmorethan150retailoutletsshowcasingcloseto500brands.ItprovidestremendousscopeforF&Binparticular,whichhasahigherchanceof“impulsepurchase”thanmostothercategories.Also,thecommencementofoperationsbyWorldmark,amixedusedevelopmentatAerocitywillprovidefurtherimpetustoF&Baroundtheairport.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 18
Empowering Brands and Shoppers Through Technology
Theimpactoftechnologyinsimplifyingconsumerlivescanbewitnessedbytheincreasinguseoflaptops,tablets,smartphonesanddesktops.From200millioninternetusersin2013toover500millioninternetusersby2017—including314millionmobileinternetusers—thegrowthstoryofinternetusageinIndiaisontheupsurge8.Asaresult,e-retailhasgainedmomentumwiththewidespreaduseoftechnologyacrossageandincomegroups,impactingconsumer–retailerdynamics.
Onlineretailhasbecomeoneofthemostvibrantsegmentsoftheretailsector,withtechnologyallowingthesegmenttomagnifyitscustomeroutreachmanifold.Apartfromtheconvenienceofpurchasingalmostanythingatanytime,onlineshoppingportalsallowtheconsumerawidervarietyofchoiceatdifferentpricepoints.CBREconductedaconsumersurvey,‘How We Like to Shop – 2015’9,tounderstandshoppingpatternsofconsumersinIndia.Thesurveythrowsupsomeinterestingfindingsontheonlinesegmentaswellanditsrisingprominence,with78%oftherespondentsshoppingonlineatleastonceamonth.Respondentswerealsoquizzedonwhattheyexpectedtodomoreofteninthecomingtwoyears.Almost67%respondedthattheywerelikelytoshopfromadesktop/laptopmoreoften;whilearound59%expectedtousetablets/smartphonesmoreoftentoshoponline.Withalargemajorityoftherespondentspreferringtouseonlineplatformsmoreofteninthecomingyears,ithasbecomeclearthattechnologyispoisedtoplayalargerroleinshapingretaildynamicsinIndia.
Activity frequency of consumers
(Figure 25)
42%
39%
37%
31%
29%
26%
25%
35%
37%
48%
32%
49%
44%
37%
8%
8%
9%
9%
14%
11%
12%
0 20 40 60 80 100
Search a social networking site/access blogsfor feedback and comments on products
Compare prices on a mobile phone when in or around a store
Go into shops
Use a shopping centre app
Order online
Purchase other items when picking up online order from store
Order from retailer’s website and pick from store
Source: CBRE Asia Pacific Consumer Survey, 2014.
Atleast once a week Atleast once a month Every 2-3 months
8. Internet and Mobile Association of India (IAMAI)9. A retail consumer survey was conducted by CBRE in August 2014 to identify current and future shopping trends across the Asia Pacific (APAC) region. India was a part of this exercise, with a total of 1,000 respondents from the Delhi National Capital Region (NCR).
© CBRE Ltd. 201519 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
What will you do more often?
(Figure 26)
Source: CBRE Asia Pacific Consumer Survey, 2014.
Do more often No change Do less often
39%
31%
30%59%
27%
14%
36%38%
26%
Visit a Physical Store
Use Smartphone / Tablet Use Catalogue/Mail Order
67%
24%
9%
Use Desktop / Laptop
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 20
SocialMedia–Consumers‘Like’
Theuseofvariedonlinechannelshasresultedinconsumersaswellasretailershavingvariousoptionsofinteractionavailabletothem.LeadingdevelopmentsinDelhisuchasSelectCitywalkandDLFPromenadeengagecustomersthroughtheirsocialmediapages,regularmailersonmalleventsaswellaswellupdatedwebsites.Consumersalsoplacesignificantemphasisonsocialmediaasalmost76%oftheconsumersinoursurveyadmittedtousingsocialmediatoupdatethemselvesonschemesatshoppingcenters.Thisillustratesthatconsumersareincreasinglyrelyingonsocialmediatomakeinformedchoicesontheirpurchases,perhapsinfluencedbysocialmediasitesthatincludeadvertisements,productreviews,newproductlaunchannouncements,etc.
Source: CBRE Asia Pacific Consumer Survey, 2014.
Do you use social media to remain up to date with latest schemes, events and new stores atshopping centres?
(Figure 28)
9%disagree
15%neutral/don’t Know 76%
agree
MobilesDriveOnlineBoom
IndiahasthethirdlargestInternetuserbaseintheworld,outofwhichmorethan50%aremobile-onlyinternetusers10.Toleveragethis,leadingIndianonlineretailerssuchasFlipkart,JabongandMyntra,areinvestingheavilyindevelopingapplicationsfortheirwebsitesinexpectationofgeneratingmostoftheirsalesthroughmobileplatforms.Myntrahasfurtheruppedtheantebymovingtothe‘apponly’model,withallmajorplayersofferingspecial‘apponly’discountstodrivetraffictowardsmobilesales.Inoursurvey,weaskedconsumersiftheyshoppedovermobiles/mobileapplications,31%confirmedthattheyshoponanappatleastonceaweek,whileanother32%saidthattheymadeapurchaseatleastonceamonth.Onbeingaskedwhethercomparisonsweremadebyconsumerswhilemakingin-storepurchases,almost39%ofoursurveyedconsumerssharedthattheycomparepricesonamobilephoneinandaroundastoreatleastonceaweek.
Apps catching up fast…
(Figure 27)
Source: CBRE Asia Pacific Consumer Survey, 2014.
32%
31%
Once a month
Once a week
14%
12%
9%
Never
Less Often
Every 2 or 3 months 2%Don’t Know
10. Internet and Mobile Association of India(IAMAI)
© CBRE Ltd. 201521 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
RisingOnlineSpends
Consumersarereadytospendmoreonlinewiththeinitialdiscomfortofonlineretailercredibilityanduncertaintyaroundonlinepaymentsecuritybeingdoneawaywith,asnumerousdomesticplayershaveestablishedtheircredibilityintheonlineretailmarket.TheentryofglobalplayerssuchasAmazonandEbayhasfurtherre-affirmedthebeliefinthefutureoftheIndianonlineretailindustry.Ticketsizesarerisingandpeoplearemovingonlinefrommakingapparelpurchasestohighticketpurchasessuchasfurniture,consumerelectronicsandmobilephones.Asperoursurvey,almost78%feltthattheywerelikelytospendmoreviaonlineshopping,comparedtojustabout40%respondingpositivelytospendingmoreatphysicalstores.Ofthosewhoanticipatespendingmoreinthenexttwoyearsregardlessoftheretailplatform,mostoftheirpurchasesareexpectedtobeonline.Theperceptionofe-retailasjustacosteffectivemediumofpurchasehaslongbeenchanged,withthehigh-endretailmarketcreatingwavesviatheonlineforum.Anotherinterestingtrendisthattherisingquantumofonlinesalesgoingforwardisaccentuatedacrossconsumersfromhigher-incomehouseholds.
How much will you spend?
(Figure 29)
Source: CBRE Asia Pacific Consumer Survey, 2014.
More No change Less
Go into Shops Order Online
40%
39%
21%
78%
18%
4%
UseofTechnologybyBrickandMortarStores
MovingOnlineInabidtoensuregreaterpenetrationintotheIndianmarket,particularlysmallercities,prominentglobalbrandsthatwerealreadypresentviathebrick-and-mortarformatshavestartedtoestablishtheironlinepresence.Theyear2014alonesawatleast18suchglobalbrandsmovingonline,includingbrandssuchasMango,Aldo,Superdry,Nautica,TommyHilfiger,NineWestandSteveMadden.Playersarealsoadoptingthe‘Omni-channel’withservicessuchasbuyonlineandcollectin-store,acceptcustomerreturnsandrefundsforproductsboughtonline,storekioskforbrowsingandpaymentforproducts.
KEY BRICK & MORTAR FASHION STORES SETTING UP ONLINE OPERATIONS^
MODE OF SETTING UP OPERATIONS (DEDICATED WEBSITE, PARTNERING WITH AN ONLINE PLAYER)
Shoppers Stop, Bata, Mango, Forever 21, Biba, Trendin (AllenSolly, Van Heusen, Per England), Major Brands (DKNY, Nine West, Charles & Keith, Aldo, Bebe etc)
Dedicated Websites
Steve Madden, Mango, Aldo, Dune London, Superdry, Puma,Vero Moda, Tommy Hilfiger, Benetton, Adidas, Nike, French Connection
Tie up with leading online players such as Flipkart, Jabong, Myntra
Source: Source: CBRE Research, Q2 2015. ^ Indicative only
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 22
UsingTechnologytoMake‘in-storeexperiences’BetterTheIndianshopperhasevolvedandshoppingdoesnottranslateintostandinginqueueswaitingforthebilling.Shoppinghasevolvedfromjustbeingaboutproductstocustomerslookingforaseamlessexperience.WhileIndianplayersmightnotbeatparwithierglobalcounterparts,howevertechnologiessuchasquickresponsecodes(QR)codes,self-servicekiosks,mobilewalletshavehelpedinprovidingsuchanexperience.
Retailerstodayhaveunderstoodthattechnologyisakeycomponentoftheshoppingexperiencetoday.Mostleadingbrandsacrosssegmentshavelongbeenusingbarcodesforbilling(toavoidlongqueues)aswellaskeepingatrackonthestock.Technologyisalsobeingusedbyplayersforbetterintegrationbetweenstoresofabrand;therebyallowingcustomersawidervarietyofproducts.Forinstance,incaseofnon-availabilityofaparticularproductinthestore,apparelretailerMangoallowsforcheckingiftheproductisavailableinsomeotherstoreandgetsitdeliveredtothecustomer’saddress.MostleadingstoresalsosendoutpromotionalSMSsandemailstocustomersinformingthemonthelatestin-storeofferings.
Useofmobilewalletsisalsofastcatchingup;Noida-basedPaytm,isaleadingmobilewalletcompanywith20millionactiveusers.Thecompanyhasalmost40%ofitsusersfromtier-IIandtier-IIItowns;asmostofthemdon’thavecreditcardsorevenonlinebankingfacilities.Someindependentshop-keeperscreatemobilewalletsfortheunbankedpeopleusingtheirowncreditcards/onlinebankingfacilities,whilephysicallyacceptingcashfortheamounttheydepositinthemobilewallets.ThishasallowedforwideraccesstofundsaswellasretailproductstoconsumersintierIIandIIIcities.
ExperiencesfromAroundtheGlobeAsconsumerstodayarespoiltforchoiceanddemandnotonlytheirassortmentofproductsbutalsoapleasantshoppingexperience,theimpactoftechnologyonbetteringthe‘physicalstoreexperience’shouldnotbeundervalued.Severalbrandsacrosstheglobehaveeffectivelyincorporatedtheuseoftechnologyintheirstorestoensurecustomerneedsaremetandtimespentintheirstore/platformisconsideredastime“wellspent”.
‘Fashion Like’:FacebookisanintegralpartofmostlifestylestodayandaBrazilianfashionbrandhasusedittoitsadvantage.C&AFashioninBrazilhastakenaninitiativenamed‘FashionLike’,whichdisplaysFacebook‘likes’onsmallscreensembeddedinarticles’hangers.Theretailershowstheincreasingtallyof‘likes’receivedfromthewebacrossdifferentclothingitems.
Self-service Kiosks at Supermarkets: FoodstorechainssuchasSparhaveimplementedself-servicekiosksinvariouscountriesforallowingcustomerstodotheirownbilling.Thisallowscustomer’sgreaterflexibilityforchoosingproductsaswellasreducesthetimespentstandinginqueues.
“Qthru” App:Mostpeoplewouldliketoskipthelineatagrocerystore.ASeattlebasedstartupQthruhasdevelopedanappwhichallowsuserstodownloadtheappandinputtheircreditcarddetails.Postthis,wheninastore,shopperscanscanbarcodesoftheitemstheywantandcancheckoutbyenteringtheirpasscodeandscanningaQR-codeataQThrukiosk.
Customer Croudsourcing: Aslogisticscostsaregoingup,retailersarelookingtoencourageconsumerstobuylocalgoods.SuperBrugseninDenmarkusescustomercrowdsourcingtoensurethatthestoreonlystockslocalitemsthatwillsell.Ontheirwebsite,customerscansuggestparticularlocalitemstheywouldlikethestoretostock,afterwhichmanagerswilltesttheproductsfortasteandquality.
Enriching the ‘Product Trial’ experience:Asoneofthekeyreasonsforvisitinganapparelstoreistryingonaproduct,leadinginternationalbrandssuchasRebeccaMinkoffhavegonealongwayinimprovingtheuseoffittingrooms.Customerscanbrowseandselectproductsonaugmentedrealitytouchscreensembeddedin‘magicmirrors’intheirinteractivefittingrooms.Customersclickonthemirrortohaveitemssentdirectlytofittingroomsandpayforthembyusingtheirmobilephones.
© CBRE Ltd. 201523 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
Extensive Use of Data Analytics:Severalglobalbrandshavegoneastepaheadintryingtomeetindividualconsumerneeds,withdataonconsumerpurchasepatternsandpreferencesincorporatedinproductassortment.WarbyParker,anonlineeyeglassesretailerintheUShasbeenfocusedonusingdataanalyticstoprovideaseamlessshoppingexperience.Ithasacoreteamthatminesdataandusesalgorithmstocontinuallyinnovateandpersonalizeofferstoimprovecustomerexperiences.
Interactive shopping experience:Yihaodian,oneofChina’sleadingonlinegrocerychainhadopenednumerousvirtualstoresthatcanbeaccessedincertainpubliclocations.Whencustomerspointtheirsmartphoneintherightdirectionatinsuchlocations,avirtualstoreisdisplayedwhereitemssitonshelves.Consumerscanadditemstotheircartandgetitdeliveredtotheaddressoftheirchoice.
WayForward:SynergeticGrowthbetweenOnlineandBrick-and-MortarStores
OneuniversaltrendthatIndiansareembracingisonlineshopping,despiteconcernsregardinginternetpenetrationinthecountry.Consequently,retailersareadvisedtoadoptadual-platformbusinessmodel,enablingthemtoleverageonthemarketingvalueofphysicalstoreswhileextendingpromotionsandsalesacrossinternetportals.Meanwhile,retailersalsoneedtogrowandevolvetheirin-storeexperiences—perhapsconcentratingmoreonvisualmerchandizingand/orenhancingthesensualaspectofshopping—tocontinuetocompetewiththeconvenienceofonlineshopping.Ratherthanfocusingoncombatingtheboominonlineshopping,Indianretailersneedtoacceptthatonlineshoppingisheretostay;andthatitwillremainandgrowasadriverforretailsalesinthecountry.Brick-and-mortarretailersshould,therefore,focusondevisingwaystoridethee-commercewaveinstead.Thismeansthatbarriersbetweenonlineandofflineretailchannelsmustbebroken;andthatretailersmustseekopportunitiestomergethetwochannelstogetherforreapingthebenefitsofcreatingan‘Omnichannel’,wheretheofflinebecomestheonlineandtheonlinebecomestheoffline.Astrongfoundation(physicalstore)thatisalsoconnectedtoacustomer-friendly,easy-to-useonlineshoppingchannelcouldbethesecrettofuturesuccessintheIndianretailmarket.
© CBRE Ltd. 2015 DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER | 24
Definitions/Notes:AdetailedF&BanalysiswasundertakenbyCBREacrosspremiumhighstreets/shoppingcentersinDelhiandMumbaiacrossaninitialsetofmorethan1,300restaurants/eateries,tooutlinethefootprintofF&Boperatorsinthesetwometropolitancities.Thefinalanalysisislimitedto843restaurantsacrossbothcitiesafterapplyingfilterssuchaslocation,averagecostpercustomer,sizeofthestore,restaurantpositioning.F&BoperatorswithanaveragecostofINR500perpersonhavebeenincluded,withexceptionsonlyinthecaseofprominentdomestic/internationaloperatorsgarneringastrongregional/nationalpresence.Local-bredtakeawayjoints/quickbiteshavebeenexcludedfromtheanalysis.Bakeries/confectionerieswithhighqualityofferingshavebeenincludedintheanalysis.Restaurantsincommercialdevelopmentshavenotbeencountedin;norhaverestaurantsinhotelsbeenincludedfortheanalysis.
ShoppingCenterscoveredasapartofthisanalysisinclude:Mumbai: HighStreetPhoenix(Palledium,GrandGalleria,Kyzone),InorbitMall,RcityMallandOberoiMallDelhi: AmbienceMall,DLFEmporio,DLFPlace,DLFPromenade,MGFMetropolitan,Epicuria,PacificMallandSelectCitywalk
Highstreetscoveredaspartofthisanalysisinclude:Mumbai:LinkingRoadandColabaCausewayDelhi: ConnaughtPlace,GreenParkMarket,HauzKhasVillage,SafdarjungDevelopmentArea,GreaterKailash-IIMainMarket,KhanMarketandDefenceColony
Operatorshavebeendividedintothefollowingcategoriesbasedonproductoffering,brandvalue,grade,ticketsizeandambience:
Quick Service Restaurants (QSRs):Operatorstypicallyofferingastandardizedmenu,withafastturn-arounddeliverytime.Ticketsizesaregenerallylowwiththesemass-market,self-service,fastfoodrestaurantscateringtothegeneralpublic.
Café’s:Operatorsgenerallyofferingcoffee/teaandrelatedbeverages,withsometypeofbakeryandsmallbites.TheseallowforalongerconsumerstayascomparedtoQSR’s,withalow-mediumticketsize.Thiscategorywouldincludeallmass-marketbakeries,confectionaries,coffeechainsalongwithtraditionalcafés.
Casual Dine Restaurants (CDRs): Operatorsofferingcomparativelygoodqualityproductsavailableatamedium-highticketsize.Whilethiscategoryincludestable-servicerestaurantsofferinganinformaldiningexperience,theyareconsiderablymoreformalascomparedtoCafésandQSR’s.
Pubs and Lounges:Mostestablishmentsinthiscategoryincluderestaurantsthatservealcoholicbeveragesalongwithanarrayoffoodoptions,withsignificantemphasisontheambience.Thiscategorytypicallyoperatesonamedium-highticketsizemodel.
Fine Dine Restaurants (FDRs):Thesearefullservicerestaurantswithseparatemealcoursesoperatingonhighqualitydécorandformallythemedambienceandspeciallytrainedstaff.Theseoperateonahighticketsizemodel.
ForundertakingananalysisofshoppingcentresinNewDelhi,developmentswereclassifiedunderthreecategoriesbasisquality,featuresandservicesofferedbydevelopments:
Prime Investment Grade Malls: Premiumdevelopmentsbuiltbyreputeddevelopers,offeringhighefficiencyandqualityservicefacilitiesincludingadequateceilingheight,24X7powerback-up,centralair-conditioning,spaciousandwelldecoratedlobbies,circulationareas,goodliftservices,sufficientparkingfacilitiesandshouldhavecentralizedbuildingmanagementandsecuritysystems.Further,thedevelopmentwouldhouseleadingglobal/domesticbrandsacrossluxury/bridgetoluxuryandhigh-endsegments.Thesedevelopmentsareexpectedtobelocatedinwell-connectedareasincloseproximitytothehighincomepopulationcatchmentofthecity.Thiscategorytypicallyconsistsofmedium-largesizeddevelopments,withmajorityofthembeinglargerthan400,000sq.ft.
Investment Grade Malls: Developmentsbuiltbyregionaldevelopers,offeringsatisfactoryefficiencyandservicefacilitiesincludingadequateceilingheight,24X7powerback-up,centralair-conditioning,spaciouslobbies,circulationareas,goodliftservices,parkingfacilitiesandshouldhavecentralizedbuildingmanagementandsecuritysystems.Further,thedevelopmentwouldhouseleadingmid-enddomesticbrandsandselectglobalretailers.Thesedevelopmentsaretypicallylocatedinsecondarymarketareas(orinemerginglocations)incloseproximitytothemidincomepopulationcatchmentinthecity.Thiscategorytypicallyconsistsofsmall-mediumsizeddevelopments,withmajorityofthembeinglowerthan400,000sq.ft.
Semi-Investment Grade Malls:Developmentsbuiltbyregionaldevelopers,offeringlowefficiencyandmaynotofferservicefacilitiesincludingadequateceilingheight,24X7powerback-up,centralair-conditioning,lobbies,circulationareas,goodliftservices,parkingfacilitiesandmaynothavecentralizedbuildingmanagementandsecuritysystems.Further,thedevelopmentwouldlargelyhouselocalbrands.Thesedevelopmentsaretypicallylocatedinsecondarymarketareas(orinemerginglocations)incloseproximitytothemid/lowincomepopulationcatchmentinthecity.Thiscategorytypicallyconsistsofsmallsizeddevelopments,withmajorityofthembeinglowerthan200,000sq.ft.
© CBRE Ltd. 201525 | DELHI RETAIL SUMMIT 2015 - BACKGROUND PAPER
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