26-04-2014, 12:44 PM
Mall Management – A Growing Phenomenon in Indian Retail Industry
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Executive Summary
• The Indian retail market is expected to
continue its growth trajectory into 2010.
• Mall management has been identified as a
critical factor for the success of malls and the
retail industry across the world.
• Mall management broadly includes mall
positioning, zoning, tenant mix, promotions/
marketing and facility/finance management.
• Currently, the Indian retail market lacks
designated mall management firms. Large real
estate developers and retail chains either have
their own mall management arms operating
as subsidiaries or have contractual agreements
with international property consultants.
• Till recently, mall management was limited
to facility management by a majority of
developers in India, leading to gaps in mall
management practices.
Introduction
Organised retailing in India witnessed a gross
turnover of USD 320 billion1 in 2006. Although
this figure is low compared with other developed
economies, industry experts expect the growth rate
of this sector at 35%2 until 2010. At present, about
100 malls are operational at a Pan-India level with
a total area of 19 million sq ft. As per the current
estimates, about 3003 additional malls are expected to
be constructed across the country by 2010.
Positioning a Mall
Positioning a mall refers to defining the category
of services offered based on demographics,
psychographics, income levels, competition in
neighbouring areas and extensive market research of
the catchment. For example, if the market research
indicates that the average number of households
living in a particular area belongs to the upper middle
class, then a high-end retail mall would suit the
location. An example of this practice can be seen in
the upcoming malls, Select City Walk in Saket and
DLF’s Emporio in Vasant Kunj. We believe that these
retail developments are prime examples of good
mall positioning. These malls have been specifically
designed after an extensive market research, based on
the catchment area of South Delhi. The malls provide
high-end luxury products catering to the elite class
(socio-economic classification A and B consumers)
residing in South Delhi.
Promotions and Marketing
Promotional activities and events in a mall form an
integral part of mall management. Activities like
food festivals, handicraft exhibitions and celebrity
visits increase foot traffic and in turn sales volumes.
Organising cultural events has time and again
proved vital in attracting consumers to a mall. Such
activities may also act as a differentiator for a mall.
Developers can work on drafting marketing strategies
for individual malls to meet the needs of the local
consumer base and the challenges of local, and in
some cases, regional competitors.
Ansal Plaza, the first mall in Delhi, is an example
of a successful mall led by good promotions and
marketing mall management practices.
Indian Scenario for Mall
Management
The partial foreign direct investment (FDI)
relaxation in 2006 allowed 51% ownership in joint
ventures by single-brand companies in the retail
market. This triggered high international single-
brand retailer interest in the Indian retail market.
Additionally, large Indian conglomerates such as
Reliance Industries and Aditya Birla Group are
commencing their foray into retailing across the
country. This prompts the Indian retail industry to
undoubtedly move on a high growth curve. However,
at this juncture, retailing is still faced with one major
challenge: systematic mall management.