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BACKGROUND:

Out of 95 malls in Delhi NCR, only 12 are successful and the rest which are
operational are not profitable. High economic growth, increasing size of middle
class, high urbanization rate and availability of personal credit have all contributed
to large number of consumers shopping at the malls. This encouraged many
developers to jump into the bandwagon and start building malls. There was a rush
to be there amongst the many malls which then had high footfalls. There was no
proper planning, research, marketing and positioning strategy in place before
getting into the mall business for many developers. With no proper long run
strategy in place, these malls started faltering.
Among other cities, Delhi-NCR has the highest number of operational malls.
Reasons cited are that the city has a huge population and majority of that has a
high propensity to spend. Apart from the spending culture of the city, weather
(extremely high temperature during summers) also plays a small role in making
people choose malls over high streets.

4 malls closed down (Reebok Pacific mall) and one converted to office (Star city mall
in mayur vihar). Some successful malls:
i)
ii)
iii)
iv)
v)

Select city walk


Ambience mall on NH 8, Vasant Kunj
DLF malls- Saket, Vasant Kunj
Pacific mall
MGF Metropolitan mall, MG road

After 2010, when big players like Inorbit entered the market, small malls are
struggling for survival as customers are now heading to malls with more options,
better design and those that offer a wholesome shopping experience.
Unless they are strongly positioned and differentiated, these malls will not be able
to survive in the competitive environment. One example is the Alpha cluster of
stores in Vile Parle in Mumbai which sell all sorts of electronic products and are
known for a variety of imported goods and competitive pricing.
Factors affecting:
Among the plethora of problems that these malls are facing, the problem of
increasing vacancy levels and falling footfalls is what concerns the retailers the
most. Malls need to shift away from providing just shopping facilities and need to
evolve into family destinations. A problem that arises here is that Indian malls are
not suited and customized to meet Indian demands. They are just a replica of what
prevails in the western culture.
Hence, there is a mismatch of the brand and customers. Understanding the client
profile of a region is very important for deciding the location of the mall. Client
profile includes the customers psychology, their tastes and preferences, buying
behavior and motivation or driving force behind purchase decision. A micro level
study of this will help in deciding the key retailers (retailers with strong customer
base).
Location is an important differentiating variable between most of the successful
malls in NCR and their less spectacularly performing counterparts. For example, if a

mall is situated in or near a high-street retail location, it tends to perform poorly. By


the same coin, malls operating in locations away far away from high-street retail
perform much better. Good examples of this would be the Ambience and DLF malls
in Vasant Kunj and MGF Metropolitan on MG Road, Gurgaon.

Another major set of challenge that the developers of malls have not been able to
address are providing for adequate parking and regulating the movement of people
within the malls. High rentals- another problem faced by malls.
In a case study of malls in Gujarat by Riddhi Ambavale (2013), ANOVA and mean
analysis techniques showed that there is a greater effect of location, age,
education, and income on merchandise, store location, price, structure, culture and
purpose which influence the failure of malls.
Steps needed:

Clear distinction between factors that lead to increase in the number of visits and
those that increase sales will help in designing a proper redevelopment strategy for
malls.
In general, people of India lack awareness about mall structure and so they are
reluctant in buying different products from mall. The presence of kirana (or local
stores) and the bargaining advantage from them drives people to shop from these
local stores. Moreover, the urban people refrain from buying vegetables and dairy
products from mall because of the freshness perception. In malls usually, ethnic
products are not available in range; hence people have to explore different shops to
buy such. However, the discount season in mall increases the footfalls and product
selling also escalates.
Presence of strong anchor stores is very important from the customers point of
view since it serves as a reflection to the customers of the quality of services the
mall
provides.
For example having a McDonalds (which is perennially crowded) as an anchor is
usually a put off as it leads to an increment in the mean waiting time for customers.
Another example is that of IndiaBulls in SHOPPIN PARK in Shalimar Bagh. The failure
of its anchor adversely affected the shopping center.
Following a positioning based strategy can help solve a lot of the problems that
malls may face. The positioning of brands, better visibility of brands, the design,
layout, location accessibility of the mall- all these are important factors to be taken
into consideration when setting up a mall. This starts right from the ease of entry to
open spaces and parking within the premises, entertainment avenues, flow of the
floors to circulate traffic correctly, clustering similar brands on a floor, placement of
food zones and exits and, most importantly, the overall ambience.
Many developers are now moving towards mixed use of land as a strategy for
redevelopment. Some other measures include a revamped tenant mix, adoption of
mixed use format and delivering theme based shopping experiences. Creating
"zones" (multiplexes, food courts, kids' play area) to meet the changing needs of
the shoppers and upgrading services like access, parking (in terms of even lanes
leading up to the malls), security, providing prams for children, organizing regular
events around celebrity visits, shopping festivals etc. to ensure footfalls and
consumer involvement. The amenities draw the consumer in for reasons other than
to just purchase items.
Finally, its of utmost priority that we find the target consumer properly and place
them at the heart of asset (mall) development and asset management strategies.