The Mall Boom in India

The “Mall Boom” in India
EXECUTIVE SUMMARY
It has been noticed so far, that the retailers, with their glitzy shops and direct consumer
interface have been in the limelight as a key factor driving the growth of organized retail
in the country. However, mall development has been driven primarily by the real estate
developers who have started looking at retailing as seriously as corporate and residential
sectors. The boom has been fueled by the attractive returns obtained by the mall
developers over the last couple of years.
Moreover, the Indian metro skylines and people's lifestyles have been significantly
impacted by the Mall phenomenon. With high novelty value, the malls are almost
becoming a status symbol for the communities, generating a substantial excitement and
curiosity amongst the consumers. With increased customer acceptance of organized
retailing, there has been an increasing demand for high quality space from large format
retailers, the food and apparel chains and the multiplex operators. Mall development has
attracted many real estate developers across all large and mid-size cities. From just 3
malls up to 2000, India is all set to have over 220 malls in different stages of planning,
design and construction, by 2005.
In the face of such fierce competition, a mall has to clearly segment the market and
define its target audience. It should also have a clear positioning and differentiating
strategy. This will help them gain competitive advantage. In fact it is expected that the
malls with the right planning, positioning and management will prove to be good
investments. Having done this, a mall developer has to consider various factors like
location; layout and design; infrastructure; product & tenant mix; tenant profile before
establishing the mall. If he successfully considers these factors, then the mall will surely
be a success. Once they are successful the 4 A’s of malls would be effectively catered to
since they will be looking into consumer’s convenience, costs, communication and value.
However, there are several developments with a “me-too” approach. Such malls have
unclear positioning, sub-scale standards and ad hoc mall management. With oversupply
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in some markets and emergence of new, more professional players, such malls will find it
a challenge to retain tenants and attract footfalls.
Malls and organized retailing in India are here to stay. Given the size of the market, many
new retailers, Indian and foreign will come into the country. The large retailers will get
professional and will follow standardised practices for mall management. This is a great
opportunity for the Indian real estate developer. However, the way the forward will
eventually be determined by the Indian consumer. Also, over the same duration mall
management practices will get more professional.
Thus, the main objective of the project was to analyse the mall boom India taking into
consideration the following:
 The current retail scenario in India

 The boom of organized retailing in India esp. malls
 The factors that effect establishment of a new mall
 Growth and Progress of malls
 Marketing of malls
 Viewpoint of retailers
 Customers shopping behaviour
 Future of malls
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TABLE OF CONTENTS:
CHAPTER CHAPTER NAME: PAGE

NO: NO:
1 Overview of Indian Retail:
 Introduction
 Evolution of Indian retail
 Organised Retailing: the emerging Revolution
Reasons for organized retailing in India
Classification of organized retail sector
Growth & Progress
• Policy on foreign investment in retail holds
back sector’s rapid progression.
2 Malls and Organised Retailing
 Definition of a mall
 Emerging Mall Landscape
 Stages of Evolution of Malls
3 Profile of Indian malls- Trends
 Size of an average Indian mall
 Mall financing
 Mall Management
Footfalls and Conversions
Outlets in a mall
Advertising
4 Target market, Segmentation, Positioning and
Differentiation Strategy for malls
5 Mall Mix:
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 Location analysis
 Layout Plan & design
 Infrastructure
 Product & Tenant Mix, Tenant Profile
6 The 4 A’s of Malls
 Acceptability
 Affordability’
 Accessibility
 Awareness
7 Malls Developments – Growth and Progress:
 ‘A’ Category Cities
 ‘B’ Category Cities
8 Future of Malls
9 Case Study
10 Conclusion
Research
Annexures
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CHAPTER 1: OVERVIEW OF INDIAN RETAIL
INTRODUCTION
Retailing is the simple act of selling goods and services to the end-consumer.
Unorganised retailing in India is as old as the Indus Valley civilization and has been
allowed to grow the natural way. Company stores like Raymond and localized chains like
Nalli's in Tamil Nadu, Nilgiri's and Spencer's in the south, Akbarally's in Bombay and
Snowhite in Delhi have been there since long.
Thus till the early nineties, the organised retail industry had not evolved. There was no
consumer culture, there were limited brands and people bought what was available. There
were no ‘shopping areas’. The retail industry lacked trained manpower. It was also
difficult to compete with the unorganised sector because they operated with minimal
labor costs and overheads. Tax laws and government restrictions added to the problem.
But evolution of organised retailing as a professional service-oriented set-up, as a vehicle
to provide the consumer with a whole new shopping experience, is a phenomenon of the
mid-'90s.
In fact, through the 1990s, organized retail in India added just 1 million sq. ft. of space a
year. The pace picked up from 2001 onwards. But estimates have it that in 2003 alone, a
breathtaking 10 million sq. ft. was picked up by this fledgling industry. The most exciting
phase for the retail industry lies ahead.
Thus Organised Indian retail real estate market has witnessed a boom over the last two
years, nearly a decade after the first signs of its evolution. In most economies organised
retailing passes through four distinct phases in its evolution cycle. In the first phase, new
entrants create awareness of modern formats and raise consumer expectations. During the
second phase, consumers demand modern formats as the market develops, leading to
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strong growth. As the market matures, intense competition forces retailers to invest in
back-end operating efficiency. In the final phase, retailers explore new markets as well as
inorganic opportunities as growth tapers off. Supply Chain Management (SCM) attains
top priority in the third phase of evolution. India is currently in the second phase of the
organized retail evolution.
Evolution of Indian Retail
Historic/ Traditional/ Government Modern formats/
Rural Pervasive supported International
Reach Reach
Exclusive Brand Outlets

(EBO’s)
Super/Hyper Markets,
Departmental stores
Shopping malls
PDS,
Khadi stores
Cooperatives
Convenience
stores, Mom and
Pop/ Kiranas
Weekly Markets/
Village fairs/
melas
Source of Neighbourhood stores/ Availibilty, Shopping

Entertainment Convenience Low cost, Experience/
Distribution Efficiency
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ORGANISED RETAILING- THE EMERGING REVOLUTION
Retailing is one of the businesses that have the most rapid, most visible and deepest
impact on economic development and growth.
The new organised retailing phenomenon in India is at the centre of a lot of attention and
media coverage. From young entrepreneurs to blue-chip companies and corporates,
everyone seems to be part of the bandwagon. The swiftly changing dynamics of retailing
are bound to be noticed because they intimately and directly touch each one of us,
regardless of age, class and profession.
The Indian Retail market, rated as the second most attractive destination among emerging
markets globally, is in the midst of a gigantic transformation, thanks to a plethora of
changes within the segment and outside. With mounting international and domestic
pressure to open up the economy, with Indian corporate houses and investors taking
active interest in retailing, and with Government realising the importance of modernising
the sector, organised retail could well become a major driver of the economy in the years
ahead. The sector can greatly induce consumer spending in the domestic market, which in
turn is bound to lend the necessary push to achieving higher production levels
WHAT DROVE ORGANISED RETAILING IN INDIA?
The factors that led to organized retailing in India are:
 Domestic customers have become more demanding with their rising standard
of living and changing lifestyles: The customer has evolved. He has more spending
power, is better educated, and most importantly, exposed to brands and products
through television and foreign trips. The Indian customer now has the desire to
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acquire. Personal consumption is on the rise. Besides this, there is also rapid
evolution of the new age young Indian consumers.
 Change in customers' focus from just buying to broad shopping (buying,
entertainment and experience): Experience shopping is set to become the order of
the day. Increasingly, shopping is being viewed as a recreational activity; as much as
79% prosumers- the breed of consumers with the influencing power- believe it is so,
reveals the latest ET Euro Prosumer study. Prosumers are the trendsetters among
consumers, who are the first to try a new product and share their opinions. They set
the pace for the rest of the market. Experience shopping is set to increase at the
expense of brand shopping. Shoppers not only love a good experience, but also a
good hunt and good deals. This has led to the concept of “Shoppertainment”. This is
one of the factors that have led to a pick-up in momentum in organised formats of
retailing.
 Retail space no longer a constraint: Pro-active steps taken by the government

permitting use of land for commercial development in various cities, including
Mumbai and Delhi, have also contributed to increased availability of retail space in
the country. This has also led to organised retailing since unavailability of quality
retail space has been one of the main constraints for development of organised
formats in India.
 Consumerism and brand proliferation also enhanced organised retailing in
the country: Most of the world's leading brands, including L'Oreal, Espirit, Louis
Vuitton, Marks & Spencer, Tommy Hilfiger, Louis Phillipe, Levis, Pepe, Lee, Arrow,
Dockers, Red Tape, Clairns, Hugo Boss, Tiffany, Bulgari, Ecco, Chambor, Revlon,
Philips, Corelle, Magppie, Nike, Reebok have already come into India. In fact
consumers prefer buying such brands and such proliferation of brands is one of the
factors that has enhanced organised retailing in India.
 Media proliferation: Another factor that accelerated the growth of organised
retailing is media proliferation. Increased advertisements and brand promotions have
led to a growing consumer spending across a wide range of product categories.
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 Scalable and Profitable Retail Models are well established for most of the
categories: Last few years have seen development of the scalable and profitable retail
models across the categories. Further, large Indian corporate groups like Tata,
Reliance, Raheja, ITC, Bombay Dyeing, Murugappa Group, and Piramal Group etc
have expressed serious interest in investing into the retailing sector. In addition,
foreign investors and private equity players are also firming up plans to identify
investment opportunities in the Indian retail sector. The quantum of investments is the
inherent attractiveness of the segment and thus lures more and more investors to earn
abnormal profits.
 Suppliers /Brands willing to partner with retailers: Manufacturers in industries
such as FMCG, consumer durables, paints etc are waking up to the growing clout of
the retailers as a shift in bargaining power from the former to the latter becomes
imminent. Already, a number of manufacturers in India, in line with trends in
developed markets, have set up dedicated units to service the retail channel. Also,
instead of viewing retailers with suspicion, or as a 'necessary evil' as was the case
earlier, manufacturers are beginning to acknowledge them as channel members to be
partnered with for providing solutions to the end-consumer more effectively.
Hence, in this fast changing retail scenario, one-store management has gradually given
way to chain stores; grocery stores have given way to supermarkets, and market places
have been replaced by malls. In terms of format and customer behavior, the entire
concept of shopping has changed, so that there is now a strong shift towards one-stop
shops like malls and supermarkets.
BROAD CLASSIFICATION OF THE ORGANISED RETAIL SECTOR:
Broadly, the organised retail sector can be divided into two segments, In-Store Retailers,
who operate through fixed point of sale outlets located and designed to attract a high
volume of walk-in customers, as referred to as the brick-and-mortar format, and the Non-
store Retailers, who reach out to the customers at their homes or offices through direct
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selling, tele-marketing and e-commerce. The common formats of brick-and-mortar

retailing can be summarized as follows:
FORMAT DESCRIPTION VALUE

PROPOSITION
1) SPECIALTY STORE Focus on a specific product category, Greater choice to
(Multi-Brand) Medium sized layout in strategic the Consumer,
location comparison
Example: Footwear stores, Music between brands
Stores, Electronic & Household stores, possible
Gift stores, Food & Beverages retailers
etc.
2) EXCLUSIVE BRAND Exclusive Stores owned/ managed Or Complete range

OR COMPANY OUTLET franchised out by a given brand or available for a
manufacturer; Can be Exclusive specific brand or
Single-brand or Multi-brand store manufacturer
Example: Levis store, the Pepe store, with certified
etc. product quality
3) DEPARTMENT Large stores having a variety of One-stop shop
STORE (Multi-Product / products, organized into different catering to varied
Multi- Brand) departments such as clothing, house consumer needs,
wares, furniture, appliances, toys, Service as
books, etc; skewed towards apparel. differentiator
These stores are focused towards a
wider consumer audience catchment,
with in-store services as a primary
differentiator.
Example: Shoppers' Stop, Pantaloons,
Westside, Ebony, Lifestyle, Globus,
Piramyd
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4) CONVENIENCE Small self service formats located in Convenient,

STORE crowded urban areas/ location multi- functional,
extended
operating hours
5) DISCOUNT STORE Stores offering discounts on the retail Low prices
price through selling high volumes and
reaping the economies of scale
6) SUPERMARKET Supermarkets, generally large in size One-stop family
and typical in layouts, offer not only shop in food &
household products but also food as an household
integral part of their services. The categories
family is their target customer
Examples: Apna Bazaar, Sabka Bazar,
Marzin Free, Subhiksha, Haiko,
Nilgiri's, Foodworld from the RPG
Group, Food Bazaar from Pantaloon
Retail, Haiko, etc
7) CATEGORY Category killers focus on a particular Consumers get
KILLERS (Multi-Brand) segment and are able to provide a wide extremely wide
range of choice to the consumer, choice of brands
usually at affordable prices due to the in a specific
scale they achieve product category
Example: 'The Loft' footwear store in
Powai, Mumbai measuring 18,000 sq
ft.
8) HYPERMARKET Hypermarkets offer a large basket of Low prices, vast

products, ranging from grocery, fresh choice, including
and processed food, beauty and services; value
household products, clothing and drivers
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appliances etc.
Example: RPG group's Giant
hypermarkets and Pantaloon retail's
Big Bazaars.
9) MALLS A huge enclosure housing different Variety of shops
formats of retailers, form ideal available close to
shopping destinations in Metros, large each other, all
cities and easily accessible urban under a common
outskirts/ rural settings. They include a roof & uniform
combination of the above-organised shopping
retailing formats. environment;
Examples: Inorbit, Crossroads, High ideal hangouts
Street Phoenix, Nirmal Lifestlye, R
Mall etc..
GROWTH & PROGRESS OF ORGANISED RETAILING:
Source: Images Research
The retailing industry in India, estimated at INR 930,000 crore (2003-04) is expected to
grow at 5 percent per annum. The size of the organised retailing market in 2004 stood at
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INR 28,000 crore, thereby making up a mere 3 percent of the total retailing market. In
line with predictions made by the first IMAGES-KSA Retail Report 2002, organised
retailing is well on its way to become an INR 35,000 crore market by end- 2005. Moving
forward, organized retailing is projected to grow at the rate of 25-30 percent p.a. and is
estimated to reach an astounding INR 100,000 crore by 2010. Further, its contribution to
total retail sales is likely to rise to 9 percent by the end of the decade.
POLICY ON FOREIGN INVESTMENT IN RETAIL CONTINUES TO HOLD

BACK SECTOR'S RAPID PROGRESSION:
Earlier, when the Government announced its intention to open up the retail sector to
foreign investment, it was debating whether to allow 26 per cent or 49 per cent FDI in the
sector. But now, the department of commerce has recently proposed that 100% FDI
should be allowed in retailing. The prime minister too, expressed the desire of freeing up
Indian retailing sector and inviting foreign investment. The proposal is, however, meeting
stiff resistance from local traders and other political parties. The main fear is that that
local traders and retailers will suffer a huge setback if FDI is permitted in the retailing
sector.
The positive impact on the Indian economy due to opening up of the retail sector to
foreign investment could be in the following areas:
 FDI could have an impact on the economy not only in the retail sector but also in
many other activities such as manufacturing, food processing, packaging and logistic
services.
 This will also mean improved tax collections for local governments and the
central government.
 Supply chains and local procurement would boost the performance and business
for local enterprise. Manufacturing and supply chain management businesses are
indeed expected to witness further growth.
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 The direct impact of foreign direct investment in the retail sector is likely to be on
the absorption of retail space over the next few years. We anticipate that the average
size of malls will continue to increase. Average rents could come down since the
large-format retailers have a lower capacity for rent. Finally, developers will be
encouraged to retain ownership of properties and will exercise more control over the
tenant mix, to ensure success of the malls.
 Finally, FDI in retail will entail a significant increase in employment, both in
front-end retail stores and in the downstream supply chain.
The negative impact that FDI in retail would have on the Indian retail players:
 The small local shops might get affected and most probably the share of
individual retailers will come down. Yet, all enterprises that are able to manage the
supply chains effectively will continue to reap the benefits of growth and remain
competitive in terms of pricing and profitability. Retailers would certainly have to
refine their supply chain models to remain competitive and profitable.
But, however the Indian retailers have the advantage of understanding the Indian
consumers and their habits much better since they have been in the market for a longer
period. They should build on this advantage and leverage their brand awareness to retain
the customers.
The fears expressed in certain quarters that FDI in retail sector will short-change the local
kirana stores and smaller players and that there will be job losses are exaggerated.
Since the total size of the retail trade is expected to grow at a robust pace in the coming
years and the consumer segments patronising the big malls are going to be different, the
traditional outlets are unlikely to be affected.
On the contrary, the opening up of the sector to FDI will lead new economic
opportunities and there will be more employment generation.
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It is understood that the multinationals that invest in retail business in India would also
source Indian goods for their international outlets in a big way and thus provide a boost to
Indian exports.
Indian retail chains would get integrated with global supply chains since FDI will bring in
technology, quality standards and marketing.
According to the World Bank, opening the retail sector to FDI would be beneficial for
India in terms of price and availability of products.
As of now, the Indian retail sector, largely due to its fragmented structure, suffers from
limited access to capital, labour and suitable real estate options. In contrast, China, which
allowed 49 per cent FDI in the retail sector since 1992, benefited immensely with foreign
players bringing capital and new technologies and growing export market for domestic
products. At present, around 40 foreign retail players account for almost 20 per cent of
the organised retailing in that country.
The policy-makers would do well not to dither any more over opening the sector to FDI.
FDI will provide a big boost to food products, including vegetables, fruits, fishery and
dairy products with food chains going for direct procurement from farmers and investing
in cold chains and other infrastructure.
Similarly, textiles and garments, leather products, etc., will benefit from large-scale
procurement by international chains. This, in turn, will create more jobs at various levels.
CHAPTER 2: MALLS AND ORGANISED RETAILING
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WHAT IS A MALL?
DEFINITION:
There are as many definitions of malls as the number of malls! One such definition is:
Largely, organized retail developments by the private sector that the country has
witnessed over the past few years are colloquially referred to as “malls”.
Malls include almost all the above-discussed organized retailing formats like Super
Markets, Hyper Markets, Departmental stores, Exclusive Brand Outlets (EBO’s),
Specialty Stores etc..They also include Multiplexes’, Gaming Zones and Food Courts. A
mall is, therefore, a very broad concept that not only looks into retailing but also caters to
the food and entertainment needs of the consumers.
A mall should create an experience of economic well being, serve the community and
create greater involvement with the larger community.
“EMERGING MALL LANDSCAPE”
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Driven by the increase in number of organised retailers, a distinct change in the

aspirations of the society and profile of the Indian consumer, a large number of
developers and corporates are realising the potential and focusing on developing retail
real estate mostly malls. Importantly, the government has also woken up to the need for
adequate supporting infrastructure and revision in policies to promote the sector.
Following these developments, various companies are now setting up supporting services
to cater to the requirements of malls.
The mall market in India received tremendous importance since the country witnessed the
success of its first three malls in 2000 Spencer Plaza, Chennai, Ansal Plaza, Delhi, and
Crossroads Mall, Mumbai. The rate of development has been phenomenal and while
there has been talk about a correction or consolidation stage due to oversupply of such
retail spaces, however research shows quite the opposite. Findings suggest that India's
retail space is, in fact, in short supply and the sector is likely to boom further with
possibilities for mall developers and associated services to thrive in such a positive
scenario.
Moreover, over 72 per cent of the mall areas in 20 new malls that became functional by
2004, had been already been pre-leased to anchor and smaller vanilla retailers. For malls
that will begin to function by 2005, anchor area of over 48 per cent of the total mall area
has already been pre-leased, and as for malls to hit business by 2006, 32 per cent of the
mall area has been pre-leased by the anchors. So as it should have become evident by
now there is no real oversupply of malls in India.
Unlike their foreign counterparts, where 'have enough' has saturated the market, Indian
consumers are now demanding bigger and newer retail formats. In fact, studies show that
organised retail in India is growing at 25-30 per cent, as against six per cent for the
unorganised retail market. And if the number of malls already in existence in our country
is any indication of things to come, Indian retail is at an all time high.
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Hence we can say that malls, in particular, are contributing hugely to the development of
organised retail. Malls are coming up both within cities and at the outskirts vowing to
create destinations that will attract thousands of customers every day. Malls are
witnessing a boom because they combine all the factors and their unique mix of tenants
ensures that all the members of the family find what they need, in one huge complex,
which offers provisions for entertainment, like multiplexes, culinary delights at food
courts that serve both Indian and international cuisine. They cater to every segment of the
society, ranging from elite to the middle-class, fulfilling consumer’s every need, whether
in fashion, food, lifestyle, or viable family entertainment.
STAGES OF EVOLUTION OF MALLS:
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1. Evolution: This stage is marked by the development of the country’s first malls –
Spencer Plaza in Chennai, Crossroads in Mumbai and Ansal Plaza in Delhi – that
together account for a total built-up space of approximately 650,000 square feet.
2. Acceleration: India is currently in this stage. Beginning 2001, mall developments

picked up in a big way, especially after the market was witness to the success of the
first few malls. Enthusiastic developers announced mall projects in every conceivable
format, at every available location. . Changing consumer-expenditure patterns and the
growth in the number of organised retail chains further fuelled this boom.
In the initial acceleration phase, most developers were able to sell 50-70 per cent mall
space prior to, and also during, the construction phase and generate the requisite
funds. An example would be of the Garuda Mall in Bangalore, a joint project between
the city development authority (BDA) and realtor company Euromer Garuda Resorts,
wherein the management claims to have sold off the entire space even before the
completion of construction work. While these may be exceptional cases of good
planning, the location of the project also plays a considerable role in the successful
selling of space. In the same city there are other completed projects that are having a
tough time getting brands and retailers take up space.
Since most of the developers are joining the bandwagon sans the required planning, a
lot many projects lack clear positioning, proper space planning, adequate
infrastructure, parking, and an understanding of the basic principles of mall
management. Understandably, there are apprehensions about the success rates.
3. Saturation: The third stage in mall development, of saturation, is still a thing of the
distant future. Even if we find that domestic retailers have exhausted their appetite for
space expansion within malls, there is always the scope for allowing foreign direct
investment (FDI) to come in and explore the market further.
But however, a few cities are indicating signs of “saturation” for the current market
size. To illustrate, Gurgaon on the outskirts of the national capital Delhi and with a
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population of 1.8 million, is expecting some 4 million square feet of retail space by
2006, and so, would appear to be headed towards a stage of saturation in mall space.
But as per the study conducted by Chesterton & Meghraj, the actual availability of
mall space in the next two years will be 9.5 million square feet. In fact if the plans of
key Indian anchor retailers like Pantaloons, Shoppers’ Stop, Westside, Piramyd,
LifeStyle, Ebony and Globus, and also the multiplex operators, are taken into
consideration, the total available space is less than the requirement of just these key
retailers.
3. Consolidation: Most mature markets have gone through this stage of mall
development. In the United States, up to one-third of the nation’s 1,200-plus malls are
already obsolete. Following a decade of consolidation, the 10 largest mall real-estate
investments trusts now control 47 per cent of all malls, which includes almost all of
the 200 high-performing ones.
Mall development in India is passing through a decisive stage. The supply of retail space
is increasing not only in metros and mini-metros but also in non-metros. At the same
time, we find that project implementation has slowed down, possibly due to introspection
by developers, trying to figure out more sustainable models to proceed with. The ultimate
outcome, whether there will be a further boost to malling activity or a gradual slowdown,
will actually depend on the performance of some of the innovative mall concepts likely to
make a debut within the next one year.
CHAPTER 3: PROFILE OF THE INDIAN MALLS –

TRENDS
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SIZE OF AN AVERAGE INDIAN MALL

The Indian mall developments range between 50,000- 500,000 sq ft. On the basis of size
the malls have been classified in three categories, that is small, medium and large sized
malls. This can be seen form the table below:
Classification of Indian Malls on the basis of size:
SIZE DESCRIPTION AREA (Sq. ft.) LOCATION EXAMPLES*

SMALL Comparable to 50,000- A Grade cities, Banglore
community 2,00,000 B Grade Cities Central, Sigma
Centres Mall, Ansal
Plaza
MEDIUM Depending on 2,00,000- A Grade Cities, Prestige Forum,
the market and 5,00,000 B Grade Cities Metropolitan,
mall size, these Sahara Mall, R
may be either Mall, Centre
comparable to One
community
centers or
serving as
regional centers
LARGE Comparable to 5,00,000 and A Grade cities, The Great India
Regional/ Super above Mall, Nirmal
regional Lifestyle,
shopping centres Mantri
Heritage, Grand
Central Mall,
Expo Mart
*Examples are both for existing and proposed malls
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MALL FINANCING
In the US, over 47% of the malls are owned by institutional investors like Real Estate
Investment Trusts (REITs) and run by professional mall managers. The mall managers
plan the product mix, monitor traffic, joint promotions, and shopping festivals and so on.
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However, this requires a high degree of control over the development. Therefore, space
within the Malls is not sold like office or residential spaces.
However, in India, developers have been selling space in retail malls to investors who
further lease it out to retailers. Most mall developments are pre-marketed on paper before
the groundbreaking takes place. Considering that the investors have been getting yields in
the region of 10- 18 % on retail properties in different markets, several speculators also
enter the market and then try to maximize return by charging high rentals.
Effectively such ownership and financing structures mean that most malls are owned by
neither the developer nor the retailer but piecemeal by individual financial investors. This
can result in unplanned and uncontrolled development of the Malls and eventual loss of
rental values.
MALL MANAGEMENT
An evolving concept: As discussed earlier, professional mall management is not yet a

widely accepted concept in the market due to various ownership issues, extent of
developer control and costs involved. Unlike mature markets, most malls in India are not
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run as an operating unit. With most space sold to retail investors, the issue becomes
further complicated.
A few malls like Super mall in Mumbai and Mantri Heritage in Bangalore are
considering the services of professional mall managers. Also, Forum mall in Calcutta is
planning to operate the mall professionally by tracking footfalls in the different areas of
the mall to be able to identify weak areas and address the issues accordingly.
ADVANTAGES OF PROFESSIONAL MALL MANAGEMENT:
1.Ability to maximize revenue: A mall manager earns a fixed percentage of the

operating revenues made by the mall a compelling reason for him to drive the revenues
up to the maximum and to reduce the operating costs. Revenue sources include those
achieved through rents, car parking, advertising and events.
2.Allows developer to concentrate on core business: A professional mall manager

takes on complete responsibility of the mall, hence allowing the developer to focus on
the core business (i.e., property development).
3.Value-addition to malls: The overall valuation of a professionally managed mall tends

to be significantly greater than owner-managed malls. It has been observed that a
professionally managed mall adds positive value to the land it has been built on in the
very first year of operations.
4.Ease of exit from business: A mall owner can choose to exit the business at any point,
without negatively impacting the overall mall operations.
5.Ensure transparency of dealings: A mall manager acts as an independent third-party

mediator between the mall owner and the tenant. This ensures transparent and smooth
dealings between the two parties.
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With a large number of malls in the pipeline, one of the critical factors that will
distinguish one mall from the rest is the way it is managed. Over the next few years,
professional mall management service will establish its significance in the industry.
FOOTFALLS AND CONVERSIONS
Fall in Footfalls: Initially when Crossroads opened in 1999, the footfalls were
alarmingly high in the range of 40,000 to 60,000 on weekends due to lack of competition.
The number has come down to almost 8,000 to 10,000 on weekdays in 2003. This trend
is true for most malls. Operational malls in Gurgaon attract footfalls in the region of
12,000 to 15,000 on weekends.
Source: Images research
25
Increase in Conversions: Most operational malls, on an average, have experienced an

increase in conversions over the past three years due to various factors like changing
consumer expenditure patterns and increase in disposable incomes. Assuming average
cost of mall development to be Rs 1,500-2,500/sqft, a mall needs to generate approx.
4,000 footfalls a day with 50% conversions and an expenditure of Rs 1,500-2,000 for the
investment to break even. According to Crossroads mall, even though footfalls have
dropped since 2000, an increase in conversions (From one in every 10 visitors spending
in 1999 to around 6 in 2003) and an increase in the size of purchase by about 3- 4 times
to Rs 2,000 has ensured stable returns. The estimated conversions for Pyramids in the
same mall are around 25-40%. Overall, the conversion rates experienced by most malls
are in the region of 10 to 15% in 2003.
Conversion Rates in malls dip on weekends: Though footfalls during weekdays are 20-
25% lower and the average bill value is lower by 17-20% during weekdays; the
conversion rates are higher on weekdays.
However, the conversion rates are lower during weekends. This is a direct reflection of
the creaking infrastructure during weekends, as neither the size of the store nor the
number of people, is able to handle the rush of consumers, which leads to lower
purchases as consumers are not well attended to.
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OUTLETS IN A MALL
The outlets in a mall can be on the basis of three arrangements. They are:
 Outright sale: In this the outlet is sold to the stand-alone outlet at the time of the
development of the mall.
 Lease: Under this arrangement the outlets are on rental basis whereby the retail
outlet pays a fixed amount of rent every month to the investor.
There has been decrease in Mall rentals since 2000: Although when compared to
models around the world, mall rentals are higher in India but there has been decrease
in mall rentals since 2000. This is because of fall in property values, increase in
supply, competition and reduction in novelty value. For instance, rentals in
Crossroads have reduced by over 25% since 1999.
27
Note: the data is for Crossroads mall, Mumbai with the

maximum values indicated
 Revenue Sharing Basis: Under this kind of arrangement, a tenant would give the
mall owner a percentage of his revenues, with or without a minimum guarantee. (Few
anchors pay the mall owners in advance for construction, the way it happens
elsewhere in real estate development.) The agreement would vary for different tenants
depending on the real-estate cost of the tenant - it would be low for an apparel store,
whose inventory expenses will be higher, and high for a gaming and entertainment
hub, which doesn't really require any additional expense after the machines have been
set up. This is the simplest way for a retailer to minimise his risk. Even if retailers
have poor sales, a large part of their turnover is not lost to rentals. Such agreements
have other benefits. They could reduce tenant turnover significantly and ensure that
the mall remains well occupied. They could also prompt the mall developer to look
for ways by which footfalls can be increased, as that would be to his advantage
Example: A revenue-sharing agreement between Shoppers' Stop and Nirmal Lifestyle

(a mall in Mulund, Mumbai), whereby the mall receives 3.5-4% of the monthly
turnovers. Shoppers' Stop has also entered into an agreement with Inorbit, where
Shoppers' will pay either monthly rentals of Rs 30-40 per sq. ft, or 6-7% of the
turnover, whichever is higher.
28
A lot of debate is still going on among various sections of the business community over
the mall management as to what is better. That is whether to buy a space in a mall or go
for a lease or revenue sharing basis in this regard. Some say that leasing is best as it gives
alternative choice to the mall managers to keep experimenting with tenant-mix
composition to induct new shopping elements in the mall to increase the footfall, others
feel the best way is to take the middle road and lease some stores and sell some small
outlets. In fact, small retailer may benefit if he/she buys or they will be at the mercy of
mall managers after it becomes a thorough success. The mall managers may ask them to
vacate or increase the rent or lease amount.
An Example: Banking on its experience in running Ansal's Plaza, Ansal Group has taken
an entire mall on lease from a property developer. This major deal indicates a new aspect
placing confidence in leasing space in malls instead of selling it outright. The executive
President of Ansal's Plaza feels that the mall under the leasing mode than any other
arrangement.
According to the research conducted by me, all the malls under the survey have outlets on
different arrangements. There is no fixed format followed as far as the arrangements of
outlets are concerned.
50% of the malls (Phoenix High Street, Nirmal Lifestyle and Crossroads) under the
survey have all or almost 95% of the outlets leased. Out of the remaining 50%, no fixed
pattern was observed. Either all the outlets are sold or they are on revenue sharing basis,
or a combination of arrangements is done, like some are leased, some others are sold and
the remaining are on revenue sharing. Thus it is observed that it is entirely a mall’s
choice to decide the kind of arrangement for the outlets within its mall and there is no
fixed pattern followed.
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ADVERTISING:
There are various ways in which advertisements are done within the malls. They can be
done either for the stand alone outlets present in a mall or even for any outside brand that
is not situated in the mall. The brand wanting to advertise with the mall has to pay a
certain amount of rent for the same depending upon the period and the type of
advertisement. Moreover malls also undertake advertising to market themselves and
make people aware of the happenings in the mall.
The methods that a mall uses for advertising its outlets as well as itself can be divided
into In mall and External advertising. :
IN MALL ADVERTISING:
In mall communication includes the following methods:
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 Floor Graphics: These are graphic prints, which are put on the floor, and the
customers can notice them while walking. Because they are different they make the
customer take notice.
 Door graphics: These are prints, which are put on the glass doors. So when a
customer opens the door he notices the signage or the poster.
 Standees: These are stands on which a branding visual is mounted. They can be
used for communicating about the promotions, launches, brands etc. If they are done
up properly they draw a lot of attention. A lot depends upon the visual, which has
been used.
 Flyers: These are handout, which are given to customers walking in a mall. They
may also be used at newspaper inserts. They can be used for appraising the customer
about the events, promotions, new launches etc.
 Tent Cards: These are visuals which can be placed on tabletops, cash counters
etc. they are a form of display.
 Frontlits and Backlits: These are a form of display which are mounted on the
wall. Depending upon the location of the light it is termed as backlit or frontlit.
 PA system: The PA system carries the sound throughout a mall. It can be used for
making announcements as well as informing people about the happenings.
 Scroller
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Besides the above for advertising in a mall posters can be put in the elevators on the
escalator sides etc. The main aim is that wherever a customers vision goes, that area can
be used for advertising.
EXTERNAL ADVERTISING:
External advertising is done by the following methods:
 Newspaper ads: Malls generally advertise in newspapers, magazines etc. These

advertisements can be done for advertising about the events, promotions or launch of
a new concept.
Bombay times, Westside plus, Down Town Plus, Mid-Day etc are mostly used by
malls.
 Hoardings: Under this method of advertising, big hoardings are put up at

strategic locations in the city. People notice these hoardings and this helps to create
recall value.
 Inserts: Fliers can be inserted in newspapers or they can be put in the building
letter boxes. This is cheaper than a newspaper advertisement and it helps to cover a
wide area.
 Bus Shelters: In this, posters are put on the bus shelters. This is similar to
hoardings but it is on a smaller scale.
 Radio Mentions: There are 2 methods of radio mentions; RJ mentions and Radio
spots. The trend of listening to radio especially FM has caught up a lot in India
especially in the metros.
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 Slides: A new method of advertising that is being used is a slide which is

projected during a movie at a theatre or a multiplex. Depending upon the timing of
the show, the desired audience can be targeted.
 Internet: Pop-up screens are also increasingly being used by malls. However not
everybody has access to the net and there are many people who close the pop-up
without reading. As a result one cannot measure the hit rate.
 E-mailers: In this method, the malls send mails to a very huge number of people
informing them about the latest events and happenings at the malls. People are also
informed about the offers that they can avail of at the mall. this is a very cheap
method of communicating with their target audience.
 Direct Mailers: In this method, the mall sends direct mails to the residence of
their target audience. This ensures that the people at least go through their letter
unlike in case of E-mailers where the e-mail may be deleted. But however, in case of
both the E-mailers and Direct mailers it is necessary for the mall to have a huge
database of customers.
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CHAPTER 4: SEGMENTATION, TARGET MARKET,

POSITIONING AND DIFFERENTIATION STRATEGY
FOR MALLS
SEGMENTATION AND TARGET MARKET OF MALLS
The process of identifying subset consumers who have distinct, homogenous demand
characteristics is called market segmentation. Market segment consists of a group of
customers who share a similar set of wants.
When a mall is opened in a particular area its main target area is called the cachement
area and the people residing in that area are its main target audience
Segmentation in case of malls is done on the basis of the income group a person belongs
to. The segments that the malls usually target are the upper class and the upper middle
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class. But however with the rising income of people in the middle-class, an additional
segment of people belonging to this class, also forms a part of their target audience.
Under these segments the target audience of malls comprises of all that is kids, parents,
youngsters and even adults.
Malls have a combination of outlets that would cater to their wide target audience. For
example: Kids can go to a mall just to enjoy themselves at the gaming zone, mothers can
go to but groceries form the supermarkets and hypermarkets present at the mall and
youngsters and adults can either go for entertainment like watching a movie or go
shopping.
Thus, the different outlets present at a mall would look into the various requirements of
all people. The various requirements would be either of food, retail or entertainment.
Since malls have all the above three, people can go to a mall to satisfy their respective
requirement.
Under these categories that is food, retail and entertainment, there are various outlets
whereby the customer can visit any outlet depending upon his budget. For example if a
person goes to a mall to buy clothes, he has an option of either going to the expensive
boutiques or just satisfying his requirement from any other retail outlet present at the
mall.
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POSITIONING OF MALLS
Positioning is the act of designing the mall’s offering and image to occupy a distinctive
place in the mind of the target market. The end result of positioning is the successful
creation of a customer-focused, value proposition, a strong reason why the target
audience should visit the mall.
Currently most operational malls are riding on the first mover advantage and the boom in
the retailing sector (with a number of chains emerging) and have no clear positioning.
Since there are a handful of organized retailers, malls generally have the same set of
retailers taking up space. Therefore if one were to limit the discussion to “organized/
chain stores-type” retailers only, most Indian malls would look and feel the same.
Crossroads: But an exception to having a clear positioning strategy would be that of

Crossroads. Crossroads has clear positioning. It has done ‘premium’ positioning since it
has a lot of international brands and outlets that are present only at Crossrods. Some of
them are Mango, Ninewest, Morgan de Toi, Zegna etc. It mainly positioned itself as a
36
premium mall keeping the quality of people coming at the mall in mind rather than the
quantity. This means that they mainly targeted the upscale premium class with household
income of more than Rs. 3 lakh.
Earlier Crossroads, attracted footfalls close to 30-40,000 on weekdays and around
1,00,00 on weekends. But however the conversion rates were a meager 15 per cent. An
unpopular entry fee and the opening of another mall, High Street Phoenix, led to
stagnating revenues for Crossroads. Therefore Crossroads decided to go in for
“repositioning”. Crossroads repositioned itself as a “premium” mall that targeted only the
upscale customers.
Another example would be of the Pantaloon group that has established the Central malls
in Pune, Hyderabad and Bangalore. These are seamless malls. The advantage of this type
of a mall to a customer is that there is a centralised billing system similar to that in a
departmental store. However the space in the mall has been leased or sold out like in a
mall to different retailers and brands. This is a method of differentiating itself from the
other competing malls and providing convenience to the customers.
It has positioned itself as a seamless mall. However not many people realize that it is a
mall and they generally equate it to being a departmental store.
Hence we can say that with so many malls coming up, each mall has to position itself
clearly in such a way that it can effectively differentiate itself from its competitor.
Positioning of the mall should also ensure that people are attracted to come to their mall
rather than their competitors to satisfy their requirements. In fact once the mall market
gets saturated, it will become pertinent for all malls to have a clear positioning, especially
relevant for malls located within a distance of 2- 4 kms.
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DIFFERENTITATION STRATEGY FOR MALLS
Differentiation is a key word for success in any business. Malls usually differentiate with
respect to retail/service mix, ambience, design, target consumer segment, and anything
else that can be imagined. This means malls are trying to differentiate themselves on the
basis of a few minor aspects that they feel would help gain competitive advantage. But
however, such minor aspects do not actually help them in effectively differentiating
themselves from their competitors since some malls have similar differentiating aspects
which no longer would be then called a differentiating strategy.
For example in the malls surveyed by me, 2-3 malls are trying to differentiate themselves
on the basis of some minor factors like parking space etc.
R Mall: According to the marketing head here, the USP of their mall is that each and
every floor in the mall is connected to the parking area. Thus, no season affects (like the
monsoon) their customers’ shopping activity. Moreover, the customers shopping trolleys
can be taken right up to the car.
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Nirmal Lifestyle: The marketing head here told me that their mall is differentiated from
the others since theirs is a street mall which has an open space of around 1.5 lakh from
the total 5.5 lakh that is exclusively reserved for events an promotions. Thus, it is not a
confined mall, which is their USP.
High Street Phoenix: Even High Street Phoenix’s manager feels that the open space is
the USP of the mall.
Infinity and Hub: Malls like Infinity and Hub try to differentiate themselves on the basis
of the location they are present in. The mall managers here feel that the premium and the
high-profile area they are present in is their USP and hence the differentiating factor.
As seen from the mall manager’s survey, none of the above malls have a unique
differentiating strategy. There are just minor aspects in relation to their mall that they feel
help them in differentiating them from their customers. But again, as observed, malls like
Infinity and Hub have the same differentiating factor of location. Similar is the case of
Nirmal Lifestyle and High Street Phoenix.
But a few announced malls are differentiating themselves on account of tenant mix.
These are known as the “specialty malls”. This new concept of specialised malls,
catering to one area or industry, is going to usher in a new trend, which would change the
entire pattern of retail sale and consumer behaviour in the country. This is a very new
differentiating strategy for malls.
Thus, we have jewellery malls like Gold Souk, electronic appliances malls, malls
exclusively for women and kids, “seconds” or factory outlet malls, furniture malls,
wedding malls, and the like.
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In order to survive, malls will need to cater to specific segments which means that the
target market of such malls will be very specific unlike normal malls that target everyone
from kids to youngsters to adults etc..
For example: Pune Based Gera developments’ mall completely went in for transition in
order to differentiate itself as a specialty mall. This mall will only cater to the needs of
female customers which means that their target customers will be only females.
Another example would be of The Senior Auto Mall in Gurgaon that aims to be a one-
stop mall for automobiles and anything related to it, including loans and insurance.
Senior Builders is also developing a 300,000-square-foot Senior Circuit City, a mall
catering only to electrical consumer durables.
These malls don’t just save time for the consumer, with various brands positioned under
one roof; they will also reinforce competition, which will finally benefit the consumer.
However, conceptualizing a specialty mall calls for intensive as well as extensive market
research. Specialty malls will thrive provided they take into consideration parameters like
consumer preferences, behavioural patterns, consumers’ level of exposure to media, and
lifestyles.
Mall developers will thus have to redefine their objectives and reposition themselves to a
select audience. With competition building up, differentiation on basis of ambiance,
design etc. may not always work and thus they may have to reposition themselves as
specialty malls, local malls, regional malls, discount malls, or destination malls. When
the larger cities are exhausted, there is ample scope for further development in the
smaller cities, towns, and even in rural areas.
Thus, some of the specialty malls in existence are
S.No. Mall Product Category Location Description

1) Gold Souk Gold Gurgaon The development measuring
40
180,000 sqft. Is promoted by

the Aerens group. The mall is
expected to have over 70
jewellery retail outlets with a
parking provision of over
80,000 sq.ft
2) Auto Mall Automobiles Gurgaon Promoted by Delhi-based
Senior Builders, the mall
measures over 2,00,000 sqft. It
is expected to house
automobile company
showrooms related car
accessories, finance companies
etc.
3) Urban spaces Construction industry Pune Developed by the Deepak
fertilizers Pvt. Ltd., the mall is
spread over 10 acres and
positoned as one stop shop for
everyone in the construction
industry.
4) The Homeland Home-making Kolkata Kolkata based Merlin group is
developing a mall, measuring
around 1,00,000 sq.ft housing
retailers in the home-making
industry.
Another way of differentiating malls would be by coming up with seamless malls. These
are actually malls but look like departmental stores since they do not have different
outlets. Everything is located like in a departmental store but it is actually a mall that has
food, entertainment and even facilities like health spa etc. There is also a centralised
41
billing system unlike in a mall. An example would be of Pantaloon group that has
established the Central malls in Pune, Hyderabad and Bangalore. These are seamless
malls. This helps them differentiate their malls from the normal malls.
CHAPTER 5: MALL MIX
A mall before entering the market has to consider the factors which are mentioned below.
If it properly plans and decides for the same then it might be able to gain competitive
advantage and thus achieve success.
The factors influencing the establishment of a mall are as follows:
LOCATION ANALYSIS
A proper analysis of the location has to be done before setting up a mall at a particular
place. Location analysis typically comprises of two stages.
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 Inter-city analysis: This is the first stage in location analysis whereby the key
objective is to identify and prioritise the cities relevant for the proposed mall. The
critical issue involved and discussed here is.
• Market Potential: In this the market size has to be assessed on the basis of its
demographic and socio-economic profile (for example, total population base, age
profile, income profile). It is also necessary to find out what is the level of
spending/ownership and proportion of the population in various socio-economic
classes (viz., SEC A, B, C). This enables a high-level assessment of the potential
of various cities.
 Intra-city analysis: A Detailed Intra-city analysis has to be done to

identify the specific location best for the mall, within a selected city. In this step the
various locations in a specific selected city are to be analysed and then the mall
developer should come up with a ranked list of locations. The actual location decision
will then depend on the following factors:
• Proximity & Suitability: Proximity to, and suitability for, the

target market, and the expected footfalls and conversions at the location, have to
be taken into consideration under this. The same can be assessed through market
research and relevant market Benchmarks
• Cost factor: The cost impact of the locations is governed by

both real-estate-specific factors (such as availability and cost of real estate) as
well as non-real-estate factors (such as manpower costs and quality, availability of
supporting infrastructure) around the location.
• Parking: Reaching the mall or entering it should not be a

challenge. The retail experience begins at the parking lot, and it must be
43
addressed from that point onwards. In the foreseeable future, the experience and
adequacy of parking will be a significant determinant of the mall's success.
Firstly, it is not the absolute parking that is of importance or even of primary
importance, but of how much more parking you have from the next, closest mall.
However as parking is a crucial differentiator, parking must be planned with a
five-year time horizon. The current thumb rule of one parking space for every 300
square feet of people space is already proving inadequate.
Hence, we can say that it is very essential for a mall developer to analyse a particular
location for building a mall since getting the location wrong can become an ongoing
drain on financial and management resources, while also diluting the brand.
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LAYOUT PLAN & DESIGN
Once the location has been decided, developer should look into designing the mall since
proper planning and designing of malls is very important. Efficient designing drives
people to visit malls to a great extent. A good layout and floor plan of a mall is very
essential as it facilitates even regulation of consumer traffic. Design should be
homogeneous with the surrounding without being lost in the maze of surrounding
structures. A retailer or prospective tenant can easily find out which placement would suit
him most if he devotes a few moments to study the floor plan. The perfect floor plan can
make a customer pass through each and every store in the mall.
Aesthetic designing concept coupled with efficient space planning can create stunning
effect. Landscaping is another element that makes it very attractive for consumers leading
to better footfall.
Indian consumers today are more global with their thinking; they have experienced the
changing retail scenario and can relate to the design elements. They are a lot more
demanding and are constantly driving the mall developers and architects to innovate. In
projects such as DLF City Center (located in Gurgaon, Haryana India), In-orbit (located
in Mumbai, Maharashtra India), The Forum (located in Bangalore, Karnataka, India) etc.
there has been a significant growth in the style, kind and variety of architectural designs
45
projects across India. The mall layout and design should be such that it addresses the
following issues:
 Optimum Utilisation Of Space: The design of the mall should be

such that it utilises the space in an optimum manner and that there is no unnecessary
wastage of space.
 Amenities And Structure: Amenities such as a controlled

environment with 100% power back-up, central air conditioning, round the clock
security are a few of the expected features in new developments. There should not be
too many structures in a mall that would confuse the consumer.
 Synergies of Adjacency: The layout and the design of a mall should

also look into synergies of adjacency which means what should be next to what; what
should be opposite to what - the best neighbours are those that cater to a different
categories in the same want, like women's shoes and clothing and by the same token
what should not be in proximity the worst neighbours are those that cater to a
different wants in the same category, like fast food and health food - grooming next to
food; lingerie next to men's apparel and so on. It is also possible to create zones of
specialisation within a general mall like women's clothing, electronic and audio
equipment - any category where comparative buying is predominant.
 Comfort Factors: Among comfort factors, those that address hygiene

must be sincerely addressed, both in design and maintenance Other comfort factors
include lux, level of lighting, safety features, air quality, indoor air quality
management, kiosks, help desks, mobile charging, etc.,
46
 Circulation Space: The design of the mall should ensure proper

circulation space for the customers otherwise it will result in congestion within the
mall.
INFRASTRUCTURE
The mall building should have open spaces, large atriums and have a contemporary look
and feel in line with the global best practices.
The big atrium, amphitheatre, fountains, escalators, lifts, marble and granite flooring,
walls and five-star public conveniences are other value-added elements compliment
overall design of the mall.
New trend of integrating Cineplex in a mall and display of large plasma screens to show
ads and other documentaries or ad films provide them extra-large frontage making them a
landmark in itself. For Example: the large screen at Crossroads.
Infrastructure also includes foolproof air-conditioning system; extensive car-parking

capacities and complete power back up.
ARCHITECTURAL VOCABULARY:
47
Most Indian Malls, like most upcoming office buildings, have a “modern” look, with
glass treatments. In an attempt is create an “international” image, the architectural
vocabulary of the mall does not evolve from the surrounding context, but has a heavy
western influence. However, there are burning issues of “cultural identity” in mall
architecture and questions regarding synthesis of modern aspirations with context
sensitive design vocabulary and principles, which remain unanswered. Common central
Space/ Atriums: Though most malls have a common atrium space, very few malls have
planned to be a central hub for the development. These spaces are typically small in size
(with respect to the overall mall area), with circulation corridors leading from it to
various parts the mall.
The Metropolitan mall located in Gurgaon, is a fine example where the mall atrium space
truly is a congregational space and binds the shopping center together. The mall has three
well-connected full height, atriums or courts, providing a unified filed of vision, on to
which all the shops open, with adequate frontage and visibility to most retailers. Further,
atriums allow for comfortable circulation and easy movement. The various kiosks located
in these spaces give an active street character, adding to the vibrancy of the development.
Typically the character of common space in most western malls is comparable to the
ambience at the Metropolian mall, Gurgaon. However, as per the Indian context, a few
developments blend the mall with the traditional concept outdoor streets and plazas.
Examples include Nirmal Lifestyle in Mumbai which has outdoor common open plaza
type of spaces. Ansal Plaza in Delhi is another example of the same, where there is no
central congregational space inside the mall.
In smaller towns, a large common interior space may not be viable due to high air-
conditioning costs.
Design Elements to make a statement: In an attempt to cultivate an identity of the mall,

a few malls are including design elements which make a statement. These could be
48
freestanding sculptures or features in the roof design etc. These elements also help attract
attention and announce the presence of the mall. For example, a sculpture at MPM mall
in Hyderabad. The tower at Ansal Palza or the protruding roof of Sahara Mall located in
Delhi serves similar purposes. Another example would be of the “Glass Dome” at Nirmal
Lifestyle
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PRODUCT & TENANT MIX, TENANT PROFILE
TENANT MIX
Tenant mix basically comprises of all the tenants that include the retail outlets, stores,
entertainment destinations, food courts etc. present in a mall.
The mall manager can decide upon the tenant mix by going through the list of the retail
categories and the range of merchandise on offer. Then he should find out whether the
available merchandise would serve the mall's customers well.
Before investing a huge sum in picking up prime space in the mall, the retailer should
keep track of the developer's balancing approach as this too is a very vital factor that will
expose shoppers to a greater number of shopping alternatives generating higher traffic
flow. This will, ultimately, lead to a retail dynamic and net maximum profitability for all
retailers.
It would serve the prospective retailer better in long run if the mall has the right
combination of stores strategically woven around the anchor retailer. So that each shop
within the mall compliments each other instead of poaching on neighbour retailer's
customers.
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A retailer needs to check whether the mall managers have done enough to create a
dynamic tenant mix and whether there is synergy between retailers to maximise sales.
ANCHOR TENANTS: Anchor Tenants refer to the tenants that help in attracting
maximum footfalls at any mall. In other words, anchor tenants are the main crowd-pullers
at a mall. The key anchors in malls are department stores, super markets, hypermarkets
and multiplexes.
Usually the key anchors in a typical mall are:
KEY ANCHORS SIZE (sq.ft.) EXAMPLES

Department Stores 10,000-60,000 Shoppers Stop, Westside, Pantaloons,
Lifestyle, Pyramids, Globus, Ebony
Super Markets 20,000-50,000 Foodworld, Haiko
Hyper Markets 50,000-1,00,000 Big Bazaar, Giant
Multiplexes 3-12 screens PVR, INOX, Wave Cinemas, DT
cinemas, Fun Republic
Multiplexes as anchor tenants: As malls are being promoted as retail entertainment

destinations, the multiplex segment is making fast headway as the anchor tenant.
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* Proposed and operational malls in Delhi
As an indication of the growing popularity of multiplexes as tenants in malls, it is found

out that over 42% of proposed and operational malls in Delhi have a multiplex.
According to my research, while deciding upon the tenant mix, all the malls give prior
importance to the brands. This shows that a good brand may be a pre-requisite to be
present in a good mall. Moreover the mall managers decide upon the tenant mix in such a
way that all the possible categories of products are made available to him when he visits
the mall since catering to everything that one needs under a roof is the main purpose of a
mall.
Besides brand name, some mall managers may also decide upon the tenant mix on the
basis of the facilities required by the outlets and even catchment area.
A problem of anchoring: Sure they are crowd-pullers, but they cannot bring in the
kind of spending profile the rest of the mall wants. For example: An average
daytime filmgoer, probably aged 16-24, is unlikely to buy a shirt or a pair of shoes if
he comes to watch a film. A discount store like Big Bazaar has really not helped
Phoenix Mall's other tenants. Families shop for their monthly groceries and then
head straight home, without even looking at the other options that the mall has to
offer.
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But an anchor tenant provides the rest of the mall with far greater visibility: People
coming in for movies will notice the other shops in the mall and could revisit the mall in
future.
TENANT PROFILE
Tenant profile refers to the percentage of space allocated to each of food, entertainment
and retail. Typically in most Indian Malls, around 30% of the space is dedicated to the
apparel sector and over 12% to as high as 20% going to the food and Beverage sector.
Typical Tenant Profile
Super markets
16% 27%
Apparels
12%
Food & Beverages
Multiplex
15% Others
30%
In most of the malls surveyed (that is 4 malls), the percentage of space allocated to Retail
lies in the range of 65%-70%. Except in case of “Hub” it is 55% and in case of Nirmal
Lifestyle it is as low as 45%. This is because besides allocating space for food, retail and
entertainment it has also allocated around 18% of open space in its mall for brand
marketing activities which include promotions and events.
The percentage of space allocated to Food ranges between 10-20% in all the malls
surveyed.
The percentage of space allocated to entertainment is between 10-20% in 2 malls

considered in the survey. “Hub”, “Infinity” and “R Mall” have allocated almost 35% to
53
entertainment. This is because all these malls have multiplex as their major source of
entertainment. That is the reason why entertainment occupies around 35% in these malls
since multiplex occupies more space than other entertainment means like gaming zones
etc.. In case of “Nirmal Lifestlyle”, space allocated to entertainment is around 24%. Even
though it has a multiplex like other malls, the percentage of allocation is low since it has
allocated open space for events and promotions.(almost 18%)
Where as, in “Crossroads” and “Phoenix High Street” only 10%-20% is allocated to
entertainment. Here mainly entertainment includes “Jammin” (gaming zone) and CO’s
(bowling alley) respectively.
It has been observed that a lot of importance is given to food & entertainment besides
retail since sometimes people visit malls mainly for food & entertainment and this may
result in impulse purchases i.e. they might end up buying something by having a look at
the different stuff available there. Hence, these two play a very important aspect in
attracting people who eventually become customers for the malls
Thus to conclude, we can say that both Tenant mix and Tenant Profile are very important
factors that decide the success or the failure of a mall since a good tenant mix and typical
tenant profile adopted helps in attracting people to shop at malls. If a mall has a poor
tenant mix that does not have many branded shops and franchisees and also has no proper
distribution of space allocated to each of food, entertainment and retail then maybe the
mall will not do well. On the other hand, a mall that has branded stores and franchisees
with the right percentage allocated to food, entertainment and retail then the mall is sure
to be a success.
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CHAPTER 6: THE 4 A’s OF MALLS
In August 2005, a group of marketing theorists like Philip Kotler, Jagdish Sheth, Venkat
Ramaswamy, Nirmalya Kumar and Jerry Wind gathered at Bentley College in
Massachusetts, US to discuss the future of marketing. Some of them felt that Kotler’s
marketing mix is in trouble since it is not built around the customer and therefore an
alternative framework called the 4 A’s is suggested that is far more consumer-centric.
The degree of success depends on how close to 100% a company is able to achieve on
each of the 4 A’s.
A simple formula is used to evaluate the overall marketing program. That is on the basis
of these 4 A’s and is known as the ‘market value coverage’.
Market Value Coverage = Acceptability*Affordability*Accessibility*Awareness
Since the malls are booming, I have considered the 4 A’s of malls. Here I am discussing
how the malls have addressed these A’s. I have also mentioned why the malls are
acceptable, affordable and accessible to the consumers. Furthermore, they are aware of
these malls mainly because of the variety of promotions done at malls to attract people. It
55
is because the malls are acceptable, affordable, accessible, and the mall mangers create
proper awareness, more and more malls are coming up and hence the malls are booming.
But we have to wait, for the future in order to see how many of these malls will actually
survive in this face of fierce competition.
ACCEPTABILITY
Most Indian consumers have started preferring malls to other traditional formats of
shopping. It is because of this preference amongst the Indian consumers regarding malls;
we can say that they are gradually accepting the concept of malls. Following are the
reasons for the preference and thus the acceptance of malls in India:
1) Convenience: The Indian consumers search for convenience and shopping in a

world-class ambience. People find that they have less time than before because of a
number of factors that include the increasing number of nuclear families, working
women, greater work pressure and increased commuting time. Hence they are looking
for convenience, especially when it comes to shopping so that they don’t have to run
all over the city to complete their shopping. Thus they prefer shopping at malls since
they provide the customers with the different variety of products under one roof and
hence prove to be convenient for them.
2) Ambience: Indian consumer prefers the infrastructure at malls. It gives him an

international shopping experience. Moreover for the SECA+ and SECA customers
the ambience in mall is very important. They do not like to shop at places where the
noise levels are excessively high, or a place which is not well maintained.
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3) Entertainment: Families seek worthwhile entertainment combined with

shopping, food, and options like theatres, bowling alleys and gaming zones. The
members of the family find what they need, in one mall, which offers provisions for
entertainment, like multiplexes, culinary delights at food courts that serve both Indian
and international cuisine. The needs of the entire family can be met at 1 place. The
children can amuse themselves with games; the wife with the household shopping and
then can also dine there.
4) Product availability, quality, display and customer services: The customers

also pay attention to factors like product availability, quality, and display and
customer services. All the possible products from clothes to groceries etc. are made
available at malls. Moreover, they are of superior quality. Consumers now have a
wider rage of choices, as liberalization of the market for consumer goods has bought
many well-known international brands to India and there has been marked
improvement in the quality of local manufacturing.
5) ‘Self-service’ format: This format of shopping has brought about great changes
in customer behavior, leading to a higher propensity to purchase, when people are
allowed touch and feel the products without unnecessary interference from sales
attendants.
Thus we can say that the malls are acceptable because they look into customer value.
Value from the point of view of customers is the experience that he gets while shopping
at the mall. They basically look for experience shopping that is “Shoppertainment” The
malls effectively look into making the experience of the customer a memorable one by
the fact that they give so much importance to ambience, entertainment, quality and
display of goods etc
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AFFORDABILITY
As mentioned earlier, the malls cater to the food, retail and entertainment related
requirements of the consumer. Under each of these categories there are various options
available to the customer. He can visit the outlet that best suits his requirement and is also
within his budget. For example in case of food, there are many food outlets in the food
court. Depending upon his budget he can either choose to go to an expensive Chinese
restaurant or just have simple fast food. Similar is the case of retail. The customer can
either go to a designer boutique or any other retail outlet to buy clothes depending upon
his budget.
Thus the variety of outlets that offer a wide range of prices present in a mall caters to the
affordability factor of its target audience.
Thus, malls are affordable because they try to address the consumer costs by providing
variety of outlets that offer a wide range of prices to the customer. The customer can buy
from whichever outlet best suits his budget.
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ACCESSIBILITY
Since the malls are being preferred and accepted by people, more and more malls are
being developed. In fact statistics say that India is all set to have over 230 malls, and
quality retail real estate space of over 40 million sq.ft. of quality retail real estate space by
2006. It is not only the metros like Delhi, Mumbai, Banglore, Hydrebad, Chennai and
Kolkata (that is ‘A’ grade cities) and mini-metros like Pune, Ahmdebad, Chandigarh etc
(that is ‘B’ grade cities) that have malls coming up, but also non-metros like Kanpur,
Vadodra, Nasik, Panchkula, Agra etc have a number of malls that have been announced
and will soon be developed in the near future. This shows that the malls are coming up
almost throughout the country and hence the accessibility of such malls will become even
easier. In fact in Gurgaon, that is called the “city of malls”, has malls in almost each and
every street.
A mall before coming up has to do the analysis of the location it plans to set up in.
Location analysis has to be done keeping in mind the customer’s “accessibility”. See
Location Analysis.
Again malls are accessible since they look into consumer convenience. Convenience
factor depends upon the location. To make the malls easily accessible to their target
customers, malls are ensuring that they do proper location analysis for the same.
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AWARENESS
There is awareness of the malls amongst the consumers, which can be ascertained by the
fact that the malls are being tremendously accepted as mentioned earlier.
Basically the new malls entering the market try to create awareness about their mall in
the market by way of promotions. Moreover even the existing malls try to increase the
footfalls in their malls by way of promotions.
EVENTS & PROMOTIONS: AN EFFECTIVE TOOL
Events and promotions as mentioned earlier are an important tool for creating awareness
about new malls as well as help in increasing footfalls in the existing malls that is it acts
as an effective advertising tool.
With so many malls coming up in India, each one has to develop strategies that would
help them attract people at their malls. Besides other strategies undertaken to attract
crowds, all malls give tremendous importance to promotions and events.
Promotions and events act as a major tool for advertising as well as attracting people to
visit their malls. They act as effective crowd-pullers since these promotions and events
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are a source of entertainment for the target audience. Moreover they feel like
participating in such events, promotions, and competitions etc. As a result, they may
eventually land up buying something by looking around at the stuff available at the mall.
So it proves to be an effective marketing strategy. In fact promotions at malls help in
increasing footfalls to a very great extent even during time when people do not usually go
shopping like the monsoon season.
Usually different promotions and events at malls are held at different parts of the year
that is from April to March. They are:
 April - June: Summer Promotions

 July-September: Monsoon Promotions (Sales, Offers)
 October-November: Diwali Promotions
 December: Christmas Promotions
 January-March: End Of Season Sale (EOSS)
Hence we can see from above that Promotions and events conducted at the malls are very
diverse. Most malls have promotional activities and events throughout the year which
include events for kids, mothers, youth etc. This effectively enables malls to attract all the
different age groups. Examples would be “Summer Programmes” for kids during
vacations which would include games, drawing competition etc.; Fashion show for
youngsters, culinary shows for women etc.
They also have Promotions of leading brands that would help them get tremendous
response from their daily footfalls too.
According to my survey, all the mall managers said that events definitely do help in
increasing footfalls in a mall. From this we come to know that all the malls undertake
promotional activities in order to increase footfalls.
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Promotional activities undertaken by malls surveyed by me are discussed below in detail:
1) NIRMAL LIFESTYLE (MULUND): Nirmal Lifestlye is one the few malls that has a
huge amount of open space approximately 1.5 lakh sq. feet reserved exclusively for
events, promotions and brand marketing activities. Mr. Dhaval Vadhar, event manager
of Nirmal Lifestyle told me that the following are promotions and events usually
undertaken at Nirmal Lifestyle:
 Model Hunt & Fashion show
 Painting workshops
 Ronald playing with kids: They also have a tie-up with Mc. Donalds for
promotions wherein Ronald not only plays with the kids but also teaches them how to
maintain hygiene by giving certain tips for the same.
 Cooking contests where Sanjeev Kapoor is the judge.
 Monsoon Masti Food Hai Tasty: The “Monsoon Food Hai tasty” is a food
festival that is organized at the mall during the monsoons. At this festival there is an
unimaginable line up of exciting recipes for the food lovers. This festival helps in
attracting people to come at the malls even during the monsoon season when people
usually shop less.
 Women’s Day celebrations: During women’s day there are special programs that
are designed to celebrate Women’s weekend.
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 World Family Day: Family fortune and many other impromptu games are held at
the mall to celebrate the World Family Day.
 Festival celebrations: Usually the following two festivals are celebrated at

Nirmal Lifestyle:
• Diwali: Even during diwali the mall has a special event that makes the occasion far
more jubilant and a vibrant one. Everybody receives cordial invitations from their
lucky mascot ‘the ever Smiling Willy’. There is a perfect combination of sparkling
fireworks, mind-boggling games and dance shows that set the mood for a perfect
evening to be spent at the mall.
• “Holi week” Celebrations: In March they celebrate the ‘Holi Week’ at the
mall wherein various games and interactive programmes are conducted to entertain
shoppers.
• Christmas celebrations: During Christmas there is a Santa Claus, who moves

around the mall, plays with the kids and also gives them gifts.
 Nirmal Youth Talent Hunt (N.Y.T.H): This is a mega event which encourages
dancers as well as singers to come ahead and showcase their talent. It tries to explore
the potential within these aspirants. Usually they have celebrities who come to judge
this event. Like last year Mr. Rahul Dravid was the celebrity guest and this year it
was judged by The Band of Boys.
 Summer Programme for kids: In April since it is vacation time for kids they
usually arrange for a summer programme wherein different kind of games, puppet
shows etc. are held over the vacation period to attract the kids at mall.
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 “The Nirmal Cricket Academy”: The mall also has a cricket academy named
“The Nirmal Cricket Academy” that is set to impart training in Cricket to children
from all over Mulund. This will help in grooming cricketing talent for a better
tomorrow. These matches are hosted by the academy. This again is a way of
promotion.
 Brand Promotions: Various Promotions of leading brands have previously

happened at the mall which got tremendous response from their daily footfall. Some
of these companies were:
• EPSON
• Dettol
• Scorpio
• Ford Endeavour
• Standard Chattered
• Mountain Dew
• Godrej A.C.
• Sony Handycam
They also have had various shootings at their mall that again helps in attracting people.
The Vanilla Coke Ad and a sequence from the movie Kis Kis Ki Kismat are examples.
Besides having promotions and events to attract crowds, they also organize certain events
for their staff that would have help the employees in building stronger relationship with
their colleagues. In January last year, there was an inter-staff cricket match held that was
an opportunity for the staff members to interact with each other.
2) R MALL: The G.M of R Mall, Mrs. Rowena D’Souza, mentioned about the following
events and promotions usually held at their mall:
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 Back to School Day: In the 1st week of June they have the “Back to School”
event for kids where Drawing Competition etc is organized for kids.
 They also provide free Jammin tickets to kids
 Every Wednesday is Women’s Day at R Mall: All the women shopping on this
day at the mall get special discounts.
 Comic characters: It also has tie up with Nickelodeon channel whereby comic
characters come and entertain the kids
 Festive events: Various events for the different festivals are also organized
 Celebrity Shows: There are celebrity shows organized whereby the celebrities
come and perform at the mall. Shankar Ehsaan and Loy, Bombay Vikings musical
shows’ are examples.
3) INFINITY: Infinity has started its operations just 4-5 months back. In fact, all the
outlets are not operational as yet. During vacation time that is April-mid June, the
marketing manager, Mr. K Narang told me that they organized various events to
attract not only the kids but also the mothers to their malls. Examples of the same are:
 Puppet Making workshop

 Ek Minute Show for the kids
 Skin care Reflections for women
 Duo Dance competition
 Magic show
 Contests for Best hairstyle, Best Dress etc.
 Mummies Contest
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 Culinary show
 Musical games
 Fashion show
In the mall there were also instant acts like Jugglery and Clown acts. This attracted kids
to Infinity to a great extent. There were also mehndi artists, jewellery making artists and
sketch artists, face painting artists etc present in malls at the time of these events and
promotions. Infinity being a newly opened mall managed to attract around 3000-4000
footfalls on weekdays and around 8000-10,000 footfalls on weekends in the month of
April-June during these events and promotions and that too only with around 15% of the
outlets open at that time. This shows that events and promotions prove to be a very
effective tool for pulling crowds even for new entrants.
It also plans to organize events for festivals like Diwali, Christmas etc. in future.
4) CROSSROADS: Ms. Dolly Jitani, Marketing Manager of Crossroads, told me that the
following events and promotions are usually held at Crossroads:
 “Summer Promotion" during April-May:
• Fungama: Kids camp. These camps are for a period of 1 week i.e. from Monday to
Sunday. The kids learn various activities during this period, they play games, and
they dance and sing. On Sunday they perform what they have learned
during the week.
They are provided with lunch and snacks everyday.
• During the summer there are other activities also like bungee jumping, rock
climbing, some eating counters etc.
• There is also a raffle draw in which customers shopping for more than Rs
1500 can participate.
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• The media activity for the same includes newspaper ads, radio mentions, bus
hoardings and mailers. These are external media.
Monsoon Promotion during July-August:
• Big Splash: the event was called big Splash

• This year there were ek minute games, bollywood quiz, happy hours (at food
outlets), discount booklet and also the biggest umbrella was at display at
Crossroads.
• There was a raffle draw for the cutsomers to participate in.
• The external media cativity included newspaper
advertisments, bus shelter
etc.
 Anniversary Promotions: Crossroads opened on 5th September 1999.It

celebrates its anniversary every year. For this there are a number of activities prior to
the anniversary:
• Band playing at the mall, games, quizzes, raffle draw etc.

• A number of free gifts are also given to the customers.
• On the 5th September there is a cake cutting in the atrium where a huge cake
is cut. All customers are involved in it. Brownies are distributed to the
customers and mall partners.
 Diwali Promotion: Diwali is the main time of the year when major
shopping takes place.
• During Diwali they have various contests and offers for customers
• Free gifts are also given to the customers depending upon their amount of sales
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 Christmas Promotions:
Again they offer special discounts to customers

Free gifts are given to their customers
• There a Santa Claus in the mall during Christmas who distributes chocolates and
gifts to children
5) THE “HUB”:
Hub that is situated on the Western Express Highway also organizes events and
promotions. The marketing manager of Hub, Mr. Rajesh Gupta told me that when the
mall had begun its operations, they had done tremendous promotions to make their mall
familiar amongst people. These events included games for couples and children, DJ
nights etc. Sometimes they also have mehndi artists coming at the mall who apply
mehndi to the visitors at free of cost.
Hub had undertaken these promotions when it initially came into operation. Now the
mall has given the responsibility of organizing events and promotions at their mall to
event management companies like Jacquar, Midas etc.
6) HIGH STREET PHOENIX: Mr. Tiwari, marketing head at High Street Phoenix
mentioned about the following promotions and events usually undertaken at the mall:
 They have tie-up with Cartoon Network wherein cartoon characters move around
the mall and play with the kids.
 There was also a launch of a new Star One serial at the mall recently
 They also undertake charity events like Blood Donation etc.
 Events against abuse on child labour have also been undertaken at the mall.
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 Besides this, there are also various product promotions undertaken at the mall
from time to time. In these events there are product demonstrations done that may
convince the people to buy such products.
Thus, it can be concluded that all the six malls surveyed, undertake tremendous events
and promotions since that is a very important tool for advertising. It helps in increasing
the footfalls at malls even during time when people do not usually go shopping like the
monsoon season. So if proves to be an effective marketing strategy. As seen from above
there are a wide range of promotions and events that are undertaken by these malls that
would attract people from all the age-groups.
Finally people are aware about the malls since they are successful in conducting
promotions and events that act as an advertising tool for their mall. That is by doing this,
malls looks into customer communication (they have been successful in communicating
about their malls to the consumers by way of promotions).
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CHAPTER 7: MALL DEVELOPMENTS-GROWTH &

PROGRESS
The following two years will be critical in the history of mall developments in India.
From 25 operational malls in 2003, the country is expecting to have over 220 malls by
2006, estimated space is approx. 40 million sq. ft. The total space in the six A-Grade
cities Delhi (including Gurgaon and Noida), Mumbai, Bangalore, Hyderabad, Chennai
and Kolkata is expected to increase to over 21.1 million by 2005. Add to it the expected
supply in the key seven B-Grade cities -Pune, Ahmedabad, Lucknow, Ludhiana, Jaipur,
Chandigarh and Indore in the same duration, and the grand total comes to about 26.3
million sq.ft.
70
India Mall Space 2005

Total Space 26.3. Million sq.ft.
30,000
26,405
25,000
20,000
15,000
10,000 9,668 9,859
5,000 4,701
1,185 990
0
20
20
20
20
20
To
01
02
03
04
05
ta
l2
00
6
The National Capital Region (NCR) Delhi, Gurgaon, Noida, Greater Noida and
Faridabad will account for over 40% of this total.
Out of the total 5.23 million sq. ft. mall space being developed in the B-Grade cities, over
40% is coming up in Pune.
The market place opportunities in A and B grade categories, where category A covers
Metros and the Mini metros and B covers the Cities.
‘A’ CATEGORY CITIES
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NEW DELHI:
One of the fastest growing cities and an important business hub, New Delhi is ranked as the
second-largest market in terms of size (873.95 billion) and economic profile. Dominated by
business community, bureaucrats and politicians with huge disposable incomes, Delhi is
witnessing an exponential growth of malls, shopping complexes, multiplexes and family
entertainment centers. The key locations in the National Capital Region (NCR) comprise
Delhi state and suburban satellite towns, Noida, Greater Noida, Faridabad, and Ghaziabad.
Gurgaon, has been the forerunner in the development, attracting a number of multinational
companies in the service sector followed by Noida and Faridabad.
NCR’s first mall, Ansal Plaza was fully operational in the year 2000, with Shopper’s stop
as anchor tenant. The past couple of years have seen a splurge in the number in the number
of retail malls in the suburban location of Gurgaon, closely followed by Noida. The market
acceptability and success of these developments have spurred a number of mall-related
developments in Delhi as well.
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Source: Images research
Out of the total of over 104.6 lakh. Sq. ft. of space to be available by 2005 in the NCR,
Gurgaon has the lion’s share of almost 40%. The location offers a good demographic mix,
with large segment of middle and upper class together with an ever-increasing influx of
population owing to a number of multinational companies preferring to locate in Gurgaon.
Overall, the NCR retail market is growing at a rapid pace
Existing Malls: Gurgaon: DLF City Centre; MGF Metropolitan; MGF Plaza; Sahara Mall,
Noida: Sab Mall; Centrestage Mall, Delhi- Alankar; and Ansal Plaza, Ghaziabad: East End
Mall, Faridabad- Ansal Plaza.
Upcoming Malls: Gurgaon-DLF Mega Mall; Regent Plaza, Paras DT; Gold Souk; The
Galaxy; Central Plaza; Senior Mall; the Mega City etc., Delhi-M2K; DLF Mall; Ansal
Plaza; Agarwal AE Mall; Rectangle1; Square 1;the Metropolitan etc., Greater Noida-
Omaxe Plaza; Ansal Plaza; Expo mart etc., Ghaziabad- Shipra Mall; AEZ Vaishali; East
Delhi Mall; Orbit Plaza etc., Noida- Supertech Shopprix; Parsvnath Plaza; Senior Mall etc.
MUMBAI:
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The largest city-market and the most cosmopolitan city, Mumbai’s real estate market is an
intriguing mix of organized, semi-organized and unorganized formats. The city’s market
size of over Rs. 31,000 crore stands unrivaled, making it the prime catchment for every
retailer in the country.
There is heightened activity in the development of new malls. Over 90% is concentrated in
the suburbs, two-thirds of which is located in new retail destinations, in close vicinity to
densely populated residential pockets like Andheri, Malad and Kandivali, in the western
suburbs. The far-flung eastern suburb of Mulund has recently become the focus of retail
development activity with the two new malls, spread over a total of 13-lakh sq.ft.
Existing Malls: Fun Republic; City Mall; The Mall; R-Mall, Centre One; Crossroads and
Crossroads 2; High Street Phoenix-Phase 1,2,3; Nirmal Lifestyle Mall; Inorbit; Infinity;
Raghu Leela Mall; Cine Wonder; The Hub
Upcoming Malls: RNA Classique; RNA Millenium; Heritage; Milan theatre; Kanakia
Mall; The Eastern Mall; Dynamix Mall.
BANGALORE:
Bangalore is a thriving, modern business center and a key hub of the IT revolution in India.
The rapid expansion that Banglore has seen since the early 90s has driven a real estate
boom, transforming and remodeling the old town through commercial, residential and retail
developments.
Existing Malls: Forum; Prestige; Banglore Central; Imperial Mall
Upcoming malls: The main shopping malls coming up in Banglore are Purva Mall;
Embassy Victoria Mall; Sigma Mall; Adarsh Capital; Adarsh Opus etc
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HYDREBAD:
Hydrebad has established itself as a key emerging market in India. The increase in the
purchasing power, and the low commercial property rates are attracting major retailers.
With announcements of mall developments, the market may face an oversupply of space,
which might lead to soft rentals.
Existing malls: Hydrebad Central; Prasada Labs; MPM mall are the existing malls in
Banglore
Upcoming malls: GVK One; Hydrebad Central; Sigma Mall; City Centre; Sanali Mall;
Expo City; Methodist Attrium Abids; Prasad Imax; Babu Khan are the upcoming malls in
Banglore
CHENNAI
Chennai, the capital of Tamil Nadu, has some of the most successful and trend-setting
retailers in different sectors. The city is fast shedding its image of a conservative market,
and adapting departmental stores formats like Lifestyle, Globus, Westside, and Shoppers
Stop, thus popularizing the idea of destination shopping. India’s first retail mall, Spencer
Plaza, that ushered in the first organized mega-format for retailing. Abirami Mall, a four-
screen multiplex and 50,000 sq. ft retail complex, is a recent addition. The total real estate
by 2005 is estimated at 12-lakh sq. ft, with average rentals in the range of Rs.65 to 100 per
sq. ft.
Existing Malls: RPG’s Spencer plaza is present since 1999. After, Spencer plaza, there is
Ishpani Centre operational since 2001.
Upcoming Malls: ETA Mall; RK Salai; and Abhirami Mall
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KOLKATA:
Existing malls: Forum, City Centre and Metropolis
Upcoming Malls: Lake Mall; TAI Industries Mall, EM Byepass; P.C.Chandra Mall,;
Enclave; Gariahat Mall; Homeland Mall.
‘B’ CATEGORY CITIES
The cities under this category comprise Pune, Ahmedabad, Lucknow, Ludhiana, Jaipur,
Chandigarh and Indore.
PUNE:
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The trend of organised retail space in Pune is expanding at rapid pace, as is evident from
the number of malls in the pipeline. The city has an estimated supply of over 2,430,000
sq.ft of space up to 2006.
Existing Malls: E-Square
Upcoming malls: The upcoming malls in Pune are Nucleus; The Fun ‘n’ Shop shopper-
tainment; etc.
AHMEDEBAD:
Ahmedabad is an important market in the state Gujarat. The presence of departmental

chains like Pantaloons and Westside indicates the potential of the market. Although only
one mall is currently operational in the city, overall the real-estate market has been on an
upward swing and will witness a heightened activity in the following years.
The total supply of mall space is estimated to go up to over 1 million sq.ft. by 2005.
Existing malls: Iskon Arcade
Upcoming malls: As per the market information reputed builders have acquired larre
property of land for redevelopment of large mall projects
LUCKNOW:
Lucknow is gradually witnessing a growth in organized retail real estate. There are a few
under-construction malls, which have generated a fairly positive response from retailers.
The estimated supply up to 2005 is over 1,067,000 sq.ft.
Upcoming malls: East End Mall; Sahraganj Mall
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LUDHIANA
Broadly, the Ludhiana retail market has been traditionally an unorganised market with
predominantly local retail outlets. Now, however, the attractive population bases with
high incomes have triggered the entry of organised players in the retailing segment. As
per the current announcements, approximately 200,000 sq.ft. of retail space will be added
to the city by 2004.
Exisiting mall: Ansal Plaza
Upcoming Mall: Gold Souk
JAIPUR
Jaipur attracts a number of tourists due to its “old city” charms and cultural heritage. The
high streets and traditional bazaars, thus, have an eager market among the visiting
populace. Nevertheless, the upcoming mall projects do reflect the aspirations of the local
population as well.
Over 900,000 sq.ft. of organised retail space is expected in the Jaipur market by 2005.
Upcoming malls: Ganpati Plaza
CHANDIGARH:
Despite a low population base, Chandigarh by virtue of its population mix and location is
emerging as an important market in the region. With the further increase in the IT/ITES
sector, the city market is likely to get a boost and attract attention from more retail chains
and developers.
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The total supply of real estate is estimated to increase up to half a million over the next
two years.
Existing Malls: Fun Republic
Upcoming malls: Realizing the potential of the city, the Ansals group is planning to
develop a mall there; more shopping malls coming up in Panchkula
INDORE:
The largest city market in the state of Madhya Pradesh, Indore has a mixed real-estate
usage with residential, commercial office and retail developments often being
accommodated within the same development. Indore’s commercial real estate is essentially
focused around the Central Business District (CBD) of MG Road, and AB Road, which
runs along the eastern periphery of the city, and can be termed as the Secondary Business
District.
Existing and upcoming malls: Treasure Island; Landmark Citi; Velocity 3; Sapna
Sangeeta Theatre; Square; BCM Heights; Other retail projects include, Apollo Mall,
Navlakha Complex, PGI, etc.
Some other cities that witnessing tremendous growth in retail activity

include Agra, Kanpur, Vadodra, Nasik, Panchkula, Jodhpur, Srinagar, Bhubaneshwar,
etc. The average size of a retail mall in these cities would range between 1 to 1.2 lakh
sq.ft. as compared to metros where malls measure up to 5 lakh sq. ft.
Thus we can conclude by saying that malls are not coming up only in “A” grade and “B”
grade cities but also in many other smaller cities and towns.
79
CHAPTER 8: FUTURE OF MALLS
With 19.6 million square feet of retail space being made available by the year 2006 in the
six metro cities alone, and the list of mega malls (malls with more than 500,000 square
feet of space) on the rise, what will be the future of smaller malls, which not long ago
defined mall culture in India?
80
Chesterton Meghraj undertook an in-depth research over a period of eight weeks and
analysed India's future scenario by studying global mall movements. The impact of retail
spaces expanding from smaller to larger sized malls was studied in a global retail context
and this result was juxtaposed onto the Indian context.
These malls will be on the must-visit list of out-of-town visitors, and will provide much
needed respite from the lack of entertainment options for the populace within the city.
They will also emerge as places to congregate and socialise in. However, contrary to the
bleak future that has been predicted for the smaller malls in the media, it is believed that
with the rise of these mega malls, the smaller malls which are operational and doing great
business today are not going to disappear.
It will be a fight for survival and that is precisely our point. The smaller malls will
devise survival strategies that will help them stay afloat and not succumb to the
possibility of extinction that the big boys might inflict on them.
It is believed that the present day malls - of around 250,000 square feet or less - will, for
the purposes of survival, cluster on the basis of category, price or target consumer appeal.
It is also foreseen that the regular retailer (possibly the anchor) of the mall might relocate
to the mega mall, due to a predictable price advantage. With this happening, the ensuing
gap left behind will in all likelihood be taken up by a retailer who fits in with the then
existing retail-mix of the mall. This will inevitably create a school of like-minded
retailers within that mall.
This again will invariably give rise to a cyclical process, whereby the existing local
retailer or new players in the market will be provided with the opportunity to move into
the smaller mall, giving them a platform to compete. For example, if an anchor that is
into apparel were to move out of the smaller mall into the mega mall - a lucrative
opportunity may be created for a garment wholesaler to set up his retail outlet. Hence, a
cyclical process ensuring growth of the market will set in motion. We also believe that
the pricing per square feet of the mall, after it releases, will only be marginally affected.
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These malls, according to us, will then reincarnate them selves as 'neighbourhood malls',
and cater to the catchment in the immediate adjoining areas, focusing on providing
services like home-deliveries that the big malls will be unable to provide.
Another impact of this situation will be the inadvertent formation of the so-called
'Specialty Malls'. (See differentiation strategy for malls). Present day malls repositioning
themselves for survival and similar retailers banding together, will lead to the drive
towards categorisation.
We believe that the smaller malls will require an infallible survival strategy to counter the
possible impact of these mega malls and will follow the strategy outlined:
• The smaller malls will tie-up with other such existing malls to create a like-minded
destination, as is likely to happen on MG Road, Gurgaon, with Sahara, MGF and DLF
coming together and marketing the malls.
• The smaller malls must immediately fill up gaps (if any) left by previous occupants to
avoid large empty spaces contributing to what might look like remains of an erstwhile
mall.
• They should try to favourably differentiate themselves from the bigger mall by
identifying an inherent USP such as a neighbourhood format
• Once the small malls have consolidated their retail-mix, they must re-position and re-
market themselves, while continuing to maintain the available infrastructure and
facilities within the mall.
The mall - an invention of the West - has reached its maturity in its place of origin. For
the current small format mall developers there are priceless lessons to be learnt from
international developments. Wal-Mart is the largest retailer and real estate developer in
the world, but a little known fact is that it also has the dubious distinction of being the
largest producer of empty retail stores.
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To avoid a Wal-Mart like situation in India, developers of small malls will need to plan
ahead. They have to ensure that the space vacated by retailers who move to mega malls is
quickly taken up by similar or neighbourhood-type retailers to avoid encountering a
'sprawl'. A sprawl, incidentally, is defined as, 'poorly planned, low density, auto-oriented
development that spreads out from the centre of communities'.
While there is no need to sound the death knell for smaller malls, it might be wise for
present and future developers of malls in India to plan ahead and anticipate the trends for
facing the future with confidence and surety – forewarned is forearmed!
Franchising: the key to the success of the future of malls: The mall boom is in turn
giving a big fillip to franchising. It is greatly impacting the success of malls because a
successful franchisee is always a very useful partner to mall developers.
Mall means quality shopping and quality shopping means big brands which in turn mean
successful franchisee operations. Therefore franchisee operations are increasingly
influencing the functioning of malls.
In today’s era of economic liberalization, lots of international brands are entering India
and are making the market increasingly competitive. Thus, to have franchise partners in
malls is one of the best options to stay ahead in the rat race. Also, since the government
has not opened FDI in retail, the best option that the foreign brands have is to enter Indian
market by forming alliances with franchisee partners.
Industry sources estimate that most of the malls that are operational now have about 40%
franchisee outlets and in malls being developed in smaller towns, the share of franchisee
outlets is as high as 50% to 60%.
83
CHAPTER 9: CASE STUDY
Nightmare in Mallville
They invested big money in setting up malls. But the tenants aren't
coming
In 2002, the general manager (retail and leisure) of Landmark Construction Company,
Shashi Kumar, began work on a mall called The Hub in Goregaon, a suburb in western
Mumbai. In December 2003, construction was almost over. The labourers were all set to
84
put the final touches on the first phase of the 2.85 lakh sq. ft complex in order to finish
the complete mall construction by January 2004.
Furthermore, Shashi Kumar had managed to get a good anchor tenant that is Kishore
Biyani-promoted Food Bazaar. Essentially, anchors are the corner stone of a mall's
success: they pull in the crowds. Most tenants would enter a mall only if they are
convinced of the anchor's capability of pulling in the crowd. That is the reason why malls
give the anchor tenants discounts on the rents. The Pantaloon group's food and grocery
retailing business, along with Movietime, a multiplex, occupied up to 40% of all the retail
space in the first phase of The Hub.
But yet, Kumar is facing problems. The problems include competition from four other
malls were coming up within 2 km of The
Hub. More importantly, he realized that this
business might be nowhere as profitable
as he initially thought. For example let us
consider his deal with Food Bazaar, which is
anchoring the first phase of his mall
(pegged at 1.25 lakh sq. ft). Kumar had a rental
agreement with Food Bazaar, where they
would pay a monthly rental of Rs 40 per sq.
ft. When prodded on the significance of
those numbers, he reluctantly admits that
he can't even recover the construction cost
with that kind of rent
That is somewhat ironical. Setting up,

running and managing a mall is supposed to be
a nicely profitable undertaking. If one
85
would set up a mid-sized mall of, say, 2.5 lakh sq. ft from scratch somewhere in suburban
Mumbai, one might have to invest as much as Rs 100 crore given land and construction
costs (See 'Mall Economics'). But if one would get a monthly rental of Rs 80 per sq. ft,
which is par for the course, one could break even within 5-6 years even without 100%
occupancy. That's an annualised 18-20% return on investment (RoI).
In case of Kumar’s Hub, 20% of mall space has been leased to Food Bazaar, from which
he will make barely Rs 1.2 crore per year, when it could easily have been double. When
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the mall was almost ready to begin its operations, he found takers for less than half of the
total space - and for a far lower rate than he wanted.
This is the other face of the mall boom in this country.
Is this explosion justified? According to. B.S. Nagesh, CEO, Shoppers' Stop, who had
been watching the latest developments very closely, says that there is a certain need for
the malls. He says that if we consider just 1% of the entire Indian population, adding a
reasonable assumption of 20 sq. ft of retail space per person, there is an immediate
requirement for over 200 million sq. ft of space for customers. Nevertheless, the
mushrooming of the malls has made him a little cautious.
So if there is a requirement for malls, why are people like Kumar upset? The problem lies
elsewhere - in supply outstripping demand. There are simply too many malls chasing
too few tenants. Contrast this with the scenario three years ago, when retailers were
making a beeline for Crossroads in Mumbai and Ansal Plaza in Delhi. Kumar and his ilk
no longer have that privilege.
That is not to say that the retail industry is not growing. It definitely is. Only that the
retailers seem to have different considerations when it comes to setting up outlets.
Consider the Mehrauli-Gurgaon highway. Why would any retailer enter a mall here in the
face of competition? In an informal meeting with BW, Himanshu Chakravarti, general
manager, Trent (the company that owns the Westside store brand), recounted an
anecdote. A mall developer from Gurgaon approached them to enter his mall, one of
eight in a stretch. He really fails to understand, with that kind of competition, how could
he add any value to the mall.
Yet mall developers probably think in a different way. Shringar Films' Shravan Shroff
makes an interesting point. He says that when Fun Republic opened opposite Fame (the
Shringar-owned mutliplex) in Andheri, his weekly profit after tax (PAT) came down to
Rs 17 lakh from Rs 19 lakh in the first week. But Fun Republic's PAT for the first week
87
was Rs 11 lakh. What interested him the most was not his decline in profits, but the
overall increase in entertainment spending of Rs 9 lakh in the same week, on the same
patch of road.
LEARNING TO FLOAT
This discusses the various problems faced by the malls in this face of competition and
also gives recommendations or suggestions as to how the malls should solve them.
1) Tenant Problem: Mall developers are now playing it safe. They are ensuring
they have a basic minimum number of tenants before they start work on developing
the malls. This means that the Mall developers have wisened up since they have
realized the amount of risk involved. Most of them start construction only after they
are sure that they have got tenants to occupy 35-40% of the mall. This would ensure
at least a cash break-even before the project gets off the ground.
Example: In orbit in Malad, Mumbai, and Unitech in Noida secured tenants for one-
third of the space before getting the projects off the ground. However, on the
condition of anonymity, a mall developer admitted he had to complete construction
even before he could convince tenants to move into the mall, because the clients
wanted to see the physical representation of the mall. This becomes an unviable
proposition if tenants do back out eventually.
2) Rentals: The main issue is rentals. Malls give anchor tenants space at a rate lower than
for the rest of the mall. Now there are but a handful of players large enough to anchor
a mall. The department stores include Shoppers' Stop, Pantaloon, Westside, Ebony
and Lifestyle. There are just two hypermarkets, Big Bazaar and Giant, while
multiplex players include Fame, Inox, Adlabs and PVR. Moreover, a multiplex and a
hypermarket don't even make for an ideal anchor tenant (See 'A Problem Of
Anchoring'). The limited basket of large-scale organised retailers makes it very
difficult for malls to get the kind of anchor tenants they want. A mall developer has to
88
approach every available retailer to get him to anchor his mall. Even today, the
country has no big retail chain in the white goods or the pharmaceutical segment.
As rental expectations of the mall developer and the tenant are unlikely to match, the
best way out would then be to enter into a revenue-sharing agreement.
3) Problem of deciding tenant mix: To solve this problem mall developers rope in
consultants to study catchments, psychographics and spending habits of consumers.
The idea is to map out the brands they want in their mall. Example: Inorbit decided
what brands it wanted in their mall only after an exhaustive study of consumer
4) Lack of good synergistic combination: Inorbit has also conducted studies to tap
synergies that exist between tenants. So, it decided to plug its anchor multiplex
(Fame) along with food options McDonalds and Pizza Hut, and an entertainment hub,
Timezone. So, anyone who visits the mall is offered a complete entertainment option.
Inorbit doesn’t expect a consumer to buy jewellery or books when he comes to watch
a movie, but it would like to bundle the entertainment and food options together,
because that seems like a good synergistic combination.
5) Lack of Good infrastructure: Other malls are trying to sort out basic infrastructure
issues. Even today, many do not have sound infrastructure facilities. Crossroads, for
instance, doesn't have a service entrance for its retailers. At a mall in Gurgaon, an
employee of a food court was spotted cutting his veggies right outside the mall
entrance before operating hours, simply because there was no place within the mall to
do so! But now, Inorbit has a separate freight elevator and a loading and unloading
dock so that the regular mall activity is not disturbed. Prestige Forum in Bangalore
got Shoppers' Stop to anchor the mall after it ensured a 2-tonne basement and service
capacity. GVK One in Hyderabad has a car park for 800 cars, while Inorbit has one
for 1,200 cars. Malls developers have also been roping in the best designers and
architects, both locally and from abroad to ensure that looks aren't compromised on.
89
6) Malls not sensitive to retailers’ needs: Yet, this is not enough. Malls also need
to be sensitive to retailers' needs. For example a multiplex owner turning off the lights
at 9 p.m., before the last show began, giving the impression that the mall was shut. As
a result, the box office slackened. It took some confrontation before the mall
managers kept the lights on longer. The same mall also refused to help the multiplex
with food and theatre licences.
7) Lack of botheration for daily operation: Most have not really bothered with the
daily operations of the mall once the tenants are in. But now, they are realising the
need to actively do so even as they understand how low footfalls could lead to an
exodus of tenants. For that, they need to put a premium on quick, efficient and
satisfactory service, both to consumers and to the retailers. Inorbit and Prestige Forum
are already moving in that direction. They have installed footfall counters to map the
entire mall and study exactly where customers head to and how much time they spend
in different areas of the mall.
With this kind of competition, sustenance for malls will only happen if they continue to
draw in the crowds. And that task is not easy.
CONCLUSION:
I would like to conclude my project, by giving the following recommendations.
90
Recommendations to Mall Managers:
1) A lot of people perceive departmental stores as malls. So mall managers should

clearly position themselves so that such perception does not prevail in the minds
of people.
2) Most people visit malls on monthly basis or even from time gaps ranging between
2-6 months. It may even be beyond than that in some cases. So in order to attract
people to malls on regular basis, malls should organise promotions and events
regularly say on weekly basis. They can also come up with frequent offers for the
customers that would attract people to come at malls.
3) Most of the people like shopping at a mall because of reasons like variety offered,
ambience, convenience, quality and the decent crowds at malls. Thus, mall
managers should ensure that their mall looks into each of these factors effectively.
Whereas there are a few people who do not like shopping at a mall since they feel
that the malls are either too expensive, or are located at far away places or they
are too crowded. In order to induce such people to visit malls, mall managers
should do proper location analysis. They should ensure that their mall is centrally
located so that it can attract most of its target audience. As far as the affordability
factor is concerned, they should try and inform the people that their mall does not
only have expensive outlets but also other outlets that would cater to their
budgets. They may also come up with schemes, offers and discounts that would
be beneficial to the customers.
4) Since majority of the respondents go to the mall for retail followed by people who
go for food and entertainment, a mall manager has to ensure that he gives more
importance to retail than to food & entertainment. Though around 10-20% has to
91
be occupied by food and entertainment since they serve as add-ons but the malls
managers should not forget the importance of retail in a mall. Thus, around 70-
75% space should be allocated to retail.
5) Most of the people purchase apparels at malls, followed by people who purchase
footwear and accessories. The mall manger has to ensure that besides apparel
outlets, there are enough outlets for footwear and accessories too so that the
customer has enough variety to choose from. Moreover, product categories like
cosmetics; books; food and groceries; music; electronics; toys should not be
ignored since people do visit malls for purchase of such product categories too.
6) Since not many people are willing to spend a huge amount at malls, mall
managers should induce people to spend more by offering discounts, by providing
them with attractive offers like free items on purchases etc.
7) Since a majority of the people said that promotions do attract them to shop at
malls, all the malls should definitely undertake promotional activities from time to
time.
8) Malls should not charge an entry-fee since a majority of the people would not
visit malls if it would do so.
9) More than a majority of the people said that they would like a mall to provide
them with a printed mall map; an information desk and adequate parking facility.
Thus, mall managers should definitely provide these facilities. Moreover, other
facilities like babysitter; wheelchair; PCO’s can also be provided by the mall
managers to attract people.
Recommendations to retailers:
92
1) The retailers should definitely be present in malls besides being present as a

stand-alone outlet. Not only are the footfalls higher at malls; but also people from
different age groups visit malls unlike fixed regular customers who visit the stand-
alone outlets. Even though such people might not buy much from these outlets at
malls, they will definitely have a look at the variety made available by a particular
outlet present in a mall. Thus, people who usually do not buy a particular brand
will at least be aware of the brand by visiting the mall and the various outlets.
Even though the sales are more at stand-alone outlets, more people will be aware
of the brand by visiting these malls.
2) They should not relocate themselves in a mall. Besides being present as stand-
alones they should also be present in malls.
RESEARCH METHODOLOGY:
CUSTOMER RESEARCH:
93
The survey has been conducted to find out the behaviour of customers while shopping in
malls and also their needs and requirements in a mall.
For this survey 100 respondents have been personally interviewed.
Preferred place of shopping:
Where do you normally shop?
60 48 52
50 40 Retai Outlets
40
30
20 Departmental
10 2
0 Stores
Malls
Malls
Any Other
Departmental
Retai Outlets
Stores
Any Other
The respondents prefer all the 3 options i.e. Retail outlets, departmental stores and malls
more or less equally. This shows that the 3 formats can co-exist.
Whether shopped at a mall or not?
94
Have you ever shopped at a mall?
6%
Yes
No
94%
94% of the target audience has previously been to a mall. Only 6% of the respondents
have never been to a mall. This shows that though people may not really shop at mall,
most of them have visited a mall at least once. This may be due to the novelty value.
Malls shopped at:
The respondents were asked to name the malls they have shopped at:
The various malls that the respondents have been to are as follows:
• R Mall
• Nirmal Lifestyle
• Crossroads
• Inorbit
• Infinity
• High street Phoenix
• Citi Mall
2/3rd of the target audience has been to Inorbit. An important observation here is that
around 42% of the people perceive departmental stores and super markets as malls. Since
some of them, when asked, to name the malls they have been to, named Shoppers Stop,
95
Pantaloons, Lifestyle, Options, Globus etc. These names were mentioned in addition to
other malls they have visited. In fact some of them have even named Big Bazaar and
Food Bazaar as malls. This shows that some people perceive departmental stores and
even other organized retailing formats as malls to an extent.
Frequency of shopping:
Once a week
Frequency of shopping
Once a fortnight
12% 4% 6%
Once a month
10%
Once in 2-3
32% months
Once in 6 months
36%
Any other
When asked about the frequency of shopping at a mall, a maximum 36% of the
respondents said that they go once in 2-3 months, followed by 32% of the respondents
who shop once a month at a mall. But only 4% of them shop once a week at a mall. This
shows that people do not shop as frequent as 1 week at a mall. However, this may be
possible since in general people may not shop so often. In that case whenever people
shop they might always visit a mall for the same since 68% of the respondents’ frequency
ranges between 1-3 months
Like Mall shopping or not and reason for the same?
96
Do you like Shopping at a mall?
8%
Yes
No
92%
Variety Reason for liking to shop at a mall
Ambience 40
34
30 28
Convenient/ 24
comfortable 20
Good Quality 10 8
4 5
0
Decent crowd
Other facilities
Reason for not liking to shop at a mall
6
6
4 Crowded
4
2 Far
2
High Prices
0
Crowded Far High
Prices
97
As seen from above, 92% of the respondents like shopping at a mall. This is because of
the variety and the quality they offer, ambience, convenience factor and the decent crowd
visiting such malls.
Whereas, only 8% do not like shopping at a mall since they find them either too
expensive or they are located at far away places or they are too crowded.
Reason for going to a mall
What do you go to a mall for?
80 74
70
60 54
46
50
40 34 To shop
30
20 Food and
10 2 entertainment
0 To hang out
To
Fo
To
To
An
od
To window shop
sh
ha
ot
in
op
an
ng
he
d ow
d
r
ou
en
Any other
sh
t
te
op
r ta
in
m
en
t
3/4th of the respondents go to a mall to shop. But half of them also go to window-shop or
for food and entertainment. Around 1/3rd of the respondents just go to hang out.
This shows that though there is a need for food and entertainment in a mall, they can only
serve as add-ons. The main selling point in a mall will always be the retail portion.
Product categories:
98
Product Categories
Apparels
Cosmetics
90 78
80 Footwear
70
60 52 52 Accessories
50 44
Electronics
40 34
28
30 Toys
14 16
20 8 Food & Groceries
10 0
0 Music
Apparels
Cosmetics
Footwear
Accessories
Electronics
Toys
Food & Groceries
Music
Books and magazines
Medical & health products
Books and magazines
Medical & health

products
3/4th of the respondents usually purchase apparels at a mall. Almost half the respondents
also go to shop footwear and apparels at a mall. 1/3rd of them also purchase food and
groceries from a mall. However, no one purchases health and medical products at a mall
as of yet. However, there are a number of health product outlets like Health & Glow; The
Medicine Shoppe etc are opening up in malls.
When people go shopping they want all their needs to be met under 1 roof. The mall
should be a destination point for the entire family.
Average amount Spend:
99
Average Amount Spent
14% 2% 12% less than 500

500-1000
1000-2000
31% 41% 2000-5000
>5000
As far as spending at a mall is concerned, 41% of the respondents like to spend around
500-1000 at a mall. However, 31% of the respondents do not mind spending around
1000-2000 at a mall too. But only 2% of the respondents are willing to spend above 5000
while shopping at a mall. This could indicate that many people still think of malls as
more of an entertainment destination and a place for window-shopping.
Do Promotions attract them to visit malls:
Do promotions attract you to shop at

malls?
36%
Yes
No
64%
As far as the promotions are concerned, 64% of the respondents are attracted to shop at
malls because of promotional activities undertaken at the malls. Whereas only 36% said
that despite of the promotions, they are not inclined to go shopping at a mall.
100
This shows that a majority of people goes to malls because of the promotional events and
activities held at malls. Hence, promotions prove to be an effective tool of advertising
and attracting people at malls.
Entry-fee
Would you go to mall, if it would

charge an entry-fee
31%
Yes
No
69%
When asked the respondents about an entry-fee being charged at malls, 69% of them said
that they would not go to a mall that would charge an entry fee. Some of the reasons were
that they felt that it was an unnecessary expense since whatever is available at a mall is
available at retail outlets too. Some of them said that anyways they go for window-
shopping so it is not feasible to pay an entry fee. However, some said that it would also
depend upon the amount of entry-fee charged.
Whereas people who said that they wouldn’t mind paying the entry fee felt that even if
one would go to window shop at a mall it would be worth paying the fee because of the
diverse collection made available at the mall that is of good quality.
Various services that one would like to avail of in a mall:
101
What services would you like to avail

of in a mall?
100 78 Baby Sitter

62 72
80 Wheelchair
60 32 Mall Map (printed)
40 14
20 6 8 Information Desk
0 PCO facility
Parking facility
Ba
PC a t i . . .
Pa f a c . .
An n g
M
In
Any other
al
fo p (
he
by
rk ility
y fa c
O on.
l M air
rm pr
ot
el
i
Si
ch
h e l ity
a
t te
r
r
Here, most of the respondents mainly wanted the parking facility, an information desk
and a printed mall map. Around 3/4th of the target audience wanted at least one of these or
all these facilities. Other facilities like that of Baby Sitter, Wheelchair etc. was not much
wanted by the people. However 1/3 rd of the target audience also wanted to avail the
facility of a PCO in a mall.
Recommend people to shop at malls and reason for the same:
102
Would you recommend people to shop

at malls?
4%
Definetly
50% I might
46%
Never
50% of the target audience said that they would definitely recommend people to shop at
malls since they are easily accessible, have variety and provide quality products.
Moreover, they also have good facilities and provide customers with good deals. It is
very convenient to shop at malls according to them.
46% of the people say that they might recommend others to shop at malls depending
upon what they want to buy and whether their personal experience at the mall was good
enough for them to recommend others to go to malls.
Only 4% of them say that they will never recommend people to shop at malls since they
feel that the malls are affecting the small retailers business and that there are other
options of shopping available besides these malls.
Retailer’s survey
The stand-alone outlets surveyed by me are as follows:
103
• Reebok
• Pepe
• Levi’s
• Lee
• And
• Wills Lifestyle
• Mc Donalds
• Subway
• Woodland
Present as only Stand-alone outlets or also at malls?
All the above outlets except Woodland and Pepper Tree are not present as only stand-
alone stores but are also located in malls. They are located in various malls as shown
below:
• Reebok-High Street Phoenix (Skyzone), Nirmal Lifestyle

• Pepe- Inorbit, Crossroads, Nirmal Lifestyle
• Levi’s – Inorbit, High Street Phoenix, Nirmal Lifestyle
• Lee – Crossroads, Inorbit
• And – High Street Phoenix (Quorum), Crossroads
• Wills Lifestyle – Crossroads, Nirmal Lifestyle, Inorbit
• Mc Donalds – Nirmal Lifestlye, Hub, Crossroads
• Subway – R Mall, Crossroads, High Street Phoenix, Inorbit, Centre One
• Woodland – Not Present in any mall
• Pepper Tree-Not Present in any mall
104
2/3 rd of the stand-alone outlets are present at Crossroads and an almost equal number are
present at Inorbit and Nirmal Lifestyle too.
This shows that many retailers, which were earlier present only as stand alones, are
setting up stores in malls also. This is because they get more footfalls.
Where do they get more footfalls? At malls or as stand-alone outlets?
Where do Stand Alone's get more

footfalls?
Malls
20%
40%
Stand-alone
Outlets
40% Both Places is
Same
40% of the retailers (Levi’s, Woodland, Mc. Donald’s, Pepper Tree) under survey said
that they get more footfalls as stand-alone outlets than malls since they feel that as stand-
alone outlets they have a lot of space to showcase their entire range of collection. So
people prefer coming to stand-alone outlets since they get to see all the variety available
under a particular brand.
Another 40% (Wills Lifestyle, Lee, Pepe, Reebok) said that they get more footfalls in
malls since people like going to malls because of the variety of outlets present there. This
enables them to have a look at all the brands and then make their purchase-decision.
Whereas 20% of the retailers under survey (And, Subway) feel that footfalls at both the
places are the same.
105
However malls do have the advantage of getting more footfalls for retailers depending
upon the mall mix. Also there are a number of services that the malls provide to
customers like parking, security etc that will be beneficial for the retailer also.
Where are the Sales more?
Where are the sales more?
Malls
20% 10%
Stand Alone Outlet
70% Same at both

places
70% of the retailers surveyed (Levis, Reebok, Pepe, Mc Donalds, Woodland, Pepper
Tree, Wills Lifestyle) feel that their sales are more as stand-alone outlets again since the
entire range is made available at a stand-alone outlet unlike in a mall and they also have
their fixed et of loyal customers.
10%(Lee) of the retailers feel that sales are more at malls since people just like going to
malls because of the various brands available unlike stand-alone outlets. Many a times
even when they go window-shopping, attractive offers at malls induces them to make
purchases.
20% (And, Subway) feel that there is not much difference in the sales as stand-alones or
in malls since they have their own fixed class of consumers who visit both the places.
Malls competing existence as a Stand-alone outlet?
106
Are malls competing their existence?
20%
Yes
No
80%
80% feel that malls are not competing their existence as stand-alone outlets since usually
people just go to malls for window-shopping. But in stand-alone outlets people come
only if they intend to make a purchase. So even though the footfalls at a stand-alone
outlet are lesser when compared to malls, but the conversion rates at stand-alones are
higher. Thus, they feel that malls are not competing their existence as stand-alone outlets.
Moreover as mentioned earlier, they feel that people would prefer buying from EBO’s
since they have the entire range of collection unlike a mall where the retailers get a small
shop and so they cannot have the entire collection for their customers.
20% (Subway, Lee) are of the opinion that malls are competing their existence as a stand-
alone outlet since nowadays people prefer shopping at malls rather than stand-alones
because of the multiple brands available there and even because of the “basket of
offerings” at the malls for the customers.
Relocation in a mall?
107
Would they relocate?
10%
Yes
No
90%
When asked about relocation in a mall, (that is if a mall would come up in the area where
they are currently present), 9 out of 10 retailers said they wouldn’t like doing so since
they are currently doing well as stand-alones and that relocating themselves in a mall
would not do any better as far as their sales are concerned.
Only 1 retailer that is Lee said that it wouldn’t mind doing so since they feel that in a
mall the footfalls as well as the sales both are high and so it would be better to relocate.
What is better? Stand alone or mall?
What is better?
Stand Alone
30%
Mall
60%
10% Both are equally
good
108
60% (Woodland, Mc. Donalds, Subway, Pepe, Levi’s, Pepper Tree) feel that it is better to
be present as a stand-alone outlet since stand-alones more or less have fixed sales as they
have their own loyal set of customers. But in a mall, minimum amount of sales in a
particular month is not guaranteed since they do not have any loyal customers visiting
them at malls. Their sales are fluctuating. Sometimes they might just be average and at
other times they might be lower than that too. Moreover, in a mall they have to compete
with so many other brands present there.
30%(Reebok, And and Wills Lifestyle) are of the opinion that both the formats have
different cultures and their own identities. Both have their own advantages and
disadvantages. So it is not easy to conclude which one is better of the two, according to
them.
Only 1 retailer (Lee) said that it is better to exist in a mall since it is of the opinion that
the sales are more at mall (as seen form above). Moreover it also feels that malls are
competing their existence as stand-alone outlets and that they would not mind relocating
themselves. It is because of all these reasons it feels that it is better to exist in a mall.
BIBLIOGRAPHY:
109
Newspapers & Magazines:
Economic Times: Saturday, 2nd April 2005

Economic Times: 28th June 2005
Business Today: December 2003
Business Today, July4 2004
CMAI apparel: August 2004
The Franchising World: 15th December ’04- 14th February ‘05
Franchise Plus: March-April, 2005
Business Standard: 13th June 2005
Business World, August 2005
Books:
Malls in India: KSA Technopak Study
India Retail Report 2005: KSA Technopak Study
Images Year book
Internet:
http://www.imagesretail.com/cover_story_oct.htm
http://www.imagesfashion.com/back/march/coverstory.htm
ANNEXURES:
110
Mall Managers Questionnaire:
1) Allocate space within the mall for the foll:

Retail:
Food
Entertainment
2) What is the USP of your mall vis-à-vis that of the competing malls?
3) Do events and promotions actually increase footfalls in a mall?

Yes No
4) What kind of events and promotions do you have throughout the year at the mall?
5) What is it that attracts the customers most at the mall?
6) On what arrangement are the outlets here?

Leased
Out right sale
Revenue sharing basis
8) How do you decide upon the tenant mix?
Customer Questionnaire:
111
1) Where do you normally shop?
Retail outlets
Departmental stores
Malls
Any Other __________________________________________
2) Have you ever shopped at a mall?
Yes, then which one (s)__________________________________

No
3) How often do you shop at a mall?
Once a week
Once a fortnight
Once a month
Once in 2-3 months
Once in 6 months
Any Other (Please Specify) ______________--
4) Do you like shopping at a Mall?
Yes
No
(Please specify the reason)
112
5) What do you usually go to a Mall for? (Tick more if you like)
To Shop
Food and Entertainment (like movies, eating etc.)
To hang out
To window- shop
Any Other Reason (Please Specify) ____________
6) What product categories do you/ would you purchase at a Mall? (Tick more if you
like)
Apparels
Cosmetics
Footwear
Accessories
Electronics
Toys
Food & Groceries
Music
Books and Magazines
Medical and Health Products
Any other (Please Specify) _________________
7) On an average how much do you spend at each visit to a mall?
Less than 500

Between 500-1000
1000- 2000
113
2000-5000
5000 and above
8) Do promotions attract you to shop at Malls?
Yes
No
9) Would you go to a mall if it would charge an entry-fee? (Support your answer with
reason)
Yes__________________________________________________________________
No__________________________________________________________________
10) What are the services that you would like to avail of in a mall? (Tick more if you
like)
Baby Sitter
Wheelchair
Mall Map (printed)
Information Desk
PCO facility
Parking facility
Any other__________________
11) Would you recommend people to shop at malls? (Support your answer with a reason)
114
Definitely_____________________________________________________________
_
I might________________________________________________________________
Never ________________________________________________________________
12) Personal details:
Name: ________________________________
E-mail: ________________________ Tel No _____________
Age: < 19 yrs 20 yrs- 25 yrs 26 yrs – 40 yrs 40 yrs – 55 yrs > 55 yrs
Area of Residence:________________
Monthly household income
<10,000
10,000- 25,000
25,000-50,000
>50,000
Retailer’s survey:
Retailers
Are you present as only a stand-alone store or also in a mall?
115
If present in a mall:
• Which malls are you present in?
• Where do you get more footfalls?
• Where is the turnover/sales more?
Do you think malls are competing your existence as a stand-alone store?

Yes No
How?
If a mall were to come up in this area will you be ready to relocate?

Yes No
Why?
Which do you think is better, being in a mall or existing as a stand-alone outlet?
116

The Mall Boom in India

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The “Mall Boom” in India

 The current retail scenario in India

CHAPTER CHAPTER NAME: PAGE

CHAPTER 1: OVERVIEW OF INDIAN RETAIL

Exclusive Brand Outlets

Source of Neighbourhood stores/ Availibilty, Shopping

ORGANISED RETAILING- THE EMERGING REVOLUTION

WHAT DROVE ORGANISED RETAILING IN INDIA?

The factors that led to organized retailing in India are:

 Retail space no longer a constraint: Pro-active steps taken by the government

BROAD CLASSIFICATION OF THE ORGANISED RETAIL SECTOR:

selling, tele-marketing and e-commerce. The common formats of brick-and-mortar

FORMAT DESCRIPTION VALUE

2) EXCLUSIVE BRAND Exclusive Stores owned/ managed Or Complete range

4) CONVENIENCE Small self service formats located in Convenient,

8) HYPERMARKET Hypermarkets offer a large basket of Low prices, vast

GROWTH & PROGRESS OF ORGANISED RETAILING:

Source: Images Research

POLICY ON FOREIGN INVESTMENT IN RETAIL CONTINUES TO HOLD

CHAPTER 2: MALLS AND ORGANISED RETAILING

“EMERGING MALL LANDSCAPE”

Driven by the increase in number of organised retailers, a distinct change in the

STAGES OF EVOLUTION OF MALLS:

2. Acceleration: India is currently in this stage. Beginning 2001, mall developments

CHAPTER 3: PROFILE OF THE INDIAN MALLS –

SIZE OF AN AVERAGE INDIAN MALL

Classification of Indian Malls on the basis of size:

SIZE DESCRIPTION AREA (Sq. ft.) LOCATION EXAMPLES*

An evolving concept: As discussed earlier, professional mall management is not yet a

ADVANTAGES OF PROFESSIONAL MALL MANAGEMENT:

1.Ability to maximize revenue: A mall manager earns a fixed percentage of the

2.Allows developer to concentrate on core business: A professional mall manager

3.Value-addition to malls: The overall valuation of a professionally managed mall tends

5.Ensure transparency of dealings: A mall manager acts as an independent third-party

FOOTFALLS AND CONVERSIONS

Source: Images research

Increase in Conversions: Most operational malls, on an average, have experienced an

Note: the data is for Crossroads mall, Mumbai with the

Example: A revenue-sharing agreement between Shoppers' Stop and Nirmal Lifestyle

In mall communication includes the following methods:

External advertising is done by the following methods:

 Newspaper ads: Malls generally advertise in newspapers, magazines etc. These

 Hoardings: Under this method of advertising, big hoardings are put up at

 Slides: A new method of advertising that is being used is a slide which is

CHAPTER 4: SEGMENTATION, TARGET MARKET,

SEGMENTATION AND TARGET MARKET OF MALLS

Crossroads: But an exception to having a clear positioning strategy would be that of

DIFFERENTITATION STRATEGY FOR MALLS

Thus, some of the specialty malls in existence are

S.No. Mall Product Category Location Description

180,000 sqft. Is promoted by

CHAPTER 5: MALL MIX

The factors influencing the establishment of a mall are as follows:

 Intra-city analysis: A Detailed Intra-city analysis has to be done to

• Proximity & Suitability: Proximity to, and suitability for, the

• Cost factor: The cost impact of the locations is governed by

• Parking: Reaching the mall or entering it should not be a

LAYOUT PLAN & DESIGN

 Optimum Utilisation Of Space: The design of the mall should be

 Amenities And Structure: Amenities such as a controlled

 Synergies of Adjacency: The layout and the design of a mall should

 Comfort Factors: Among comfort factors, those that address hygiene

 Circulation Space: The design of the mall should ensure proper

Market Value Coverage = AcceptabilityAffordabilityAccessibility*Awareness