The Mall Mania


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June 2013

How consumer preferences are changing the Indian retail landscape

Shopping malls are no longer exclusive to the big metros like Mumbai, Delhi, and Bangalore. Their popularity and the Indian consumers growing appetite for a better retail experience, as well as spending power has led to malls mushrooming even in Tier II and Tier III cities like Kanpur and Kochi.

It wasn't too long ago, the Indian consumer went to his neighbourhood 'kirana' (general) store for his groceries, the 'subzi-wallah' or the vegetable seller for his fresh produce, the 'cloth store' for fabrics, and the ubiquitous 'darzi' or tailor to get his clothes stitched. While these institutions still exist, and will continue to do so in the delightfully complex Indian retail landscape, things are changing fast.

With the introduction of hypermarkets and malls with their glitzy big brand stores, dazzling displays and energetic environment, the Indian shopper is increasingly being drawn towards these new retail destinations. For many middle class families going to the mall is like going on a family outing, where shopping isn't the only thing on the agenda. While the mall culture is quite a recent phenomenon in India, the reason to visit malls has definitely changed.

In the last decade when shopping malls appeared on the scene, it was their novelty factor, a glimpse of an international way to shop that attracted the crowds. Now it's more about the experience than the intention. Whether it's the air conditioned comfort, the eating and dinning options, the play areas, the movieplexes or the shopping itself, malls have become the stomping ground for one and all.

Although most malls are overrun by the young, some skipping school, some checking out others, some out on a date, the mall is still a haven for the serious shopper, the bargain hunter, the brand lover for its convenience, the choices it offers and the prospect of finding value. Though value is relative to the shopper's orientation, it plays a key role in defining a change in the retail mix of a shopping mall, which typically contains an anchor store occupying 25% of the retail space, along with specialty stores, food court and entertainment zones, including movie theatres.

Understanding the shift in preferences and patronage

Like all things Indian, the shopping mall is a social entity. It isn't just a place where one goes to shop, it's also a place where one goes to meet and connect with others, to eat, to have fun with family and friends. This very nature of the mall is changing the way retail is being done in India, today.
• As demographics of localities and cities change, malls are repositioning themselves to be more relevant to the increasingly urbanized, emerging class of label-addicts.
• Landowners developing malls have realized that it's not just about developing the property but also about attracting more footfalls. Malls are relooking at retail leases that were previously drawn on assumptions, and making decisions based on real data and experiences instead. Retailers are also keen to experiment with formats and replicate success stories of global players.
• Consumers too, want to see more aspirational (new and global) brands for the perceived image associated with the products.
• Shopping malls are crowd-pulling marquee brands to be the anchor tenants; floors are being revamped, with a few Indian brands taking a back seat to accommodate new international brands.

The Indian metropolitan consumer certainly has come a long way. With more malls - bigger malls being added every year, offering more choices, more brands, more sales per square feet, and a better retail experience, whether this mall mania results in mall mayhem - only time will tell.