Mall Culture in India

Culture could be defined as the set of learned beliefs and values and mall culture is
learned shopping experiences. This culture is different from the typical Indian
Shopping Culture (i.e. convenience/Kirana shops or Mom and Pop stores). The mall
culture in the society is created due to shopping, roaming, enjoying movies and
entertainment and also making routine to visit a mall. In India all this has happened
rapidly but there is still a huge potential market remains untapped. The malls
developed in India due to many reasons. Some are listed below:
Population Density: Market is the sum total of existing and potential customers.
Prominent cities of India cover a huge part of population. A huge percentage of
population lives in these areas. This gives developers a very big market to serve.
High income: These cities are known as industrial hubs. Here the income level of
people is higher than the level in rural and some urban areas. People have more money
to spend on good shopping experience they can think more than bread and butter and
also are ready to spend for entertainment.
Different buying habits: In metro cities shoppers are broader conscious. Malls collect
these all of international brands of reputed companies are made available by malls.
Change in culture again developed a situation where both husband and wife are
working and they want all the required materials under one roof, this led to developing
of more and more malls.
SHOPPING malls or shopping centres are physical spaces created for retailing,
fun, leisure and entertainment and have multifarious elements.

As per Susil S. Dungarwal, Chief Mall Mechanic, Beyond Squarefeet Advisory Pvt.
Ltd, Primarily, a mall can be divided into various zones, the prominent ones being
retail, entertainment, food court and the atrium. Mall management encompasses
coordinating all these zones but the process starts right from the beginning, i.e. with
mall positioning. The positioning of a mall will determine how the developer should
proceed.

Generally, the trend is that a developer develops a mall and then sells it to some
investor, who then leases it out to retailers and this whole process creates ownership
issue, which creates problems in maintaining the malls.
Experts say such malls are owned neither by developers nor by the retailers but are
slowly owned by individual financial investors, which create unplanned and
haphazard developments for the malls and eventually it depreciates the rental value of
the malls.

This is the crux of the problem. Retailers face challenges due to lack of quality space,
cross subsidisation, high rental costs, high occupancy costs, low margins because of
fewer sales, lower percentage of conversions and shortage of mall management. Mall
developers, on the other hand, have challenges of their own. They are battling increase
in vacant spaces, poor footfall and shrinking catchments owing to traffic jams. A
flawed location and incompatible tenant mix along with defective management add to
the woes. DLF's Star Mall has been lying vacant and DT Mall is witnessing a similar
scenario with several retailers walking out of the mall due to poor customer traffic.

A major reason behind poor consumer traffic is that once the space is sold or leased
out, the developers stop paying attention to branding or promotions in a mall, which
ultimately affects the retailer's business and leads to low consumer traffic in malls.

Problems of Mall Developers in India

1. Lack of Research Resources: Mall Management invites a huge investment. The
developers need to analyze various factors so that adequate information is available
and then set the malls because minute factors may become the cause of its success or
failure. In India the status of retail research is not up to required standards.
2. Tenant Mix: A proper tenant mix contributes lot in the success of a mall in India
the mall developers face a problem of maintaining these tenant mix, where they can
attract maximum traffic. Developers lease out retail space on a first come first served
basis. This therefore creates a sub optimal tenant mix like a food and beverage outlet
next to a designer apparel shop instead of an accessories or a footwear shop. If the
developers think of making a tenant mix as per logical requirement of the mall, then
some stores may not be lent out in time and developers incur loss of rent.
3. High costs of land and construction: In India the traffic in malls can be seen
maximum in metro cities where the costs of land and construction are very high. If the
developers do not find tenants in time, even the break becomes very difficult.
Therefore this increases the cost and this rise in cost significantly increased the rents
and this discourages retailers to have a space.
4. Facility Management and Parking: Good infrastructure or facility management of
common areas becomes a problem in malls where retail outlets are sold as starta title.
In India due to constraints of space malls are built in the city and due to which they do
not have adequate parking as the developers provide basement parking facilities,
where parking spaces are inefficient due to low ceiling heights, bad lighting and single
entry and exit points.325

5. Inadequate Promotional activities: Promotional activities are very much needed

to communicate about malls to give them a brand. In India promotional activities are
few in majority of malls, developers perceive that these events only help increase foot
traffic and not revenues, but this is helpful and effective for the future perspective.

Ans2) Mall have although tried to establish themselves in minds of the customers, yet
there remains a silent non acceptance towards malls too.
At one hand, where customers have got so many benefits of the malls, they say
that they have lost a personal touch with the shop owners and a special
relationship that they have with their local kirana stores since last so many
years.
In malls, they definitely get good services but they lack after-sales services.
In malls, they feel they are being treated as just another customer whereas in
the local kirana store they are known by their names, their tastes, etc.
Several times, even personal problems are being discussed at the local stores. If
any item is found to be of undesired quality then they can easily get it
exchanged for a better one.
And of course, at a local store, they enjoy their bargaining right for every
single product.
RAGHAV GUPTA PRESIDENT TECHNOPAK ADVISORS
Malls were hailed as one of the key growth drivers for the retail and entertainment
sector in the country 5-7 years ago, as they provided a plug and play opportunity for
retailers to expand footprint and promote consumption. Today, there are an estimated
150 malls in India, and the sad reality is that only around 20-25 of these are
successful. Malls like Select City Walk and Ambience in the NCR, Inorbit and High
Street Phoenix in Mumbai, Forum in Kolkata, Garuda and Forum in Bangalore have
done a phenomenal job of creating shopping and leisure destinations for consumers
and retailers.
However, with fewer than 20% malls delivering on the customer and financial
counts, one can clearly say that the mall revolution has not been a grand
success in India.

 Issues with malls exist at a mindset, planning (or lack of it), execution, as well
as mall management level. Few developers realise that malls are a retail
business that needs to be planned, managed and nurtured like one, and not just
another piece of real estate to sell to the highest bidder at the soonest possible.
Also, with rentals taking up a disproportionate share of revenues for a retailer
(25-35 % for a number of fashion retailers!), this is a broken economic model
for the occupier, hence for the developer. Like in any other industry,
understanding, partnering and servicing customers on a continual basis is the
key to success for developers. Till this happens, a number of retailers will
continue to refer to CAM (Common Area Maintenance charges) as SCAM!
Source: Economic Times