From the outside what looks like a crammed neighborhood, opens up to a huge field with a fete-like commotion. Once known as Mumbai’s Shor bazaar, later rechristened to Chor bazaar(a.k.a. Jumma bazaar as referred to by natives), comes alive in the wee hours of Friday. Chor bazaar (thieves market), is one of the oldest (150 years) flea markets in the country. Though, its former name Shor bazaar, still befits its noisy chattering of sellers and even noisier buyers.

Accompanied with a friend I enter the market much before the dawn breaks, as suggested to us by some frequent visitors. It was really difficult to see much amidst the hullabaloo and the dark of the early hours. Slowly as it shone upon us, we could to see more than a hundred traders, offering anything to everything that could fit on the mat (mostly made out of old newspapers) upon whi

ch the stolen goods were kept. The first sight was that of umpteen mobile phones, ipods, mp3 players, transistors, audio cassettes,and others going back as far as gramophones and their LPs. Then there were other electronics ranging from televisions, both new and old (including an LCD), washing machines, computer monitors, laptops, juicers, mixers and grinders, irons et al. Then there were jeans, trousers, shirts, lowers, uppers of any brand you could name along with a good pair of sho

es to go with them. There were watches, sunglasses, a huge array of antiques, jewellery, household crockery and cameras.

Anyone new to the place would have been overwhelmed. So were we and hence started looking out for some good bargains. Obviously, it’s hard to hold yourself back when there are Nike shoes on offer just for Rs40 and Rado watches for Rs 120. Your ability to negotiate with the vyapaari decides how much and how fast you can buy. It is advisable, though, to start bargaining only once you have decided on what to buy. It is always helpful to carefully inspect the good before buying as no product from the Chor bazaar comes with any kind of guarantee. We were lucky to get our hands on some unseen goodies. The first purchase was an antique compass in a classic wooden case covered with plush velvet on the inside. The next was again something from yesteryears. A table top three dimensional timepiece which came with additions such a metal piece which looked like a sword only with it’s tang, along with a few other baubles, all in silver. By the time we moved on to our next and as it turned out the last buys, the sun had risen and things became quite visible. Lastly, we got two wrist watches, both from acclaimed brands. All this within Rs 300.

If you happen to visit Mumbai do take some time out on Friday early morning to experience the madness at Mumbai’s Chor Bazaar. Be sure to carry a torch and an empty bag to amass all that you buy.

- Vivin

The Indian mobile handset arena, at present, appears fully packed with numerous options to look at, with models varying from the cheapest across the world, the Vodafone 150 (VF 150) sold for INR 799 (USD 18) featuring only the basic attributes of a cell phone, to the likes of iPhone that feature some of the most sophisticated technologies. At the first look, this reflects the focus the domestic market is receiving from some of the world’s leading handset players such as Nokia, Samsung, Sony Ericsson and Motorola, which are betting high on the fast-growing demand for mobile handsets across the country. The same understanding has exactly been the trigger behind the flood of new handsets launched in the past couple of years, as players struggle to capture a larger pie of this hot cake.

Taking a look back to the past decade, when owning a handset symbolized a high status among people, the Indian cellphone market has come up very strong, riding on the wave of rising wireless subscriber base, which recently crossed 600 million mark in mid 2010, and consistent decline in the Average Selling Price (ASP) of handsets, which has come down to INR 2500 (USD 50) in 2010. A few other key factors known to have contributed to this phenomenal growth are rising disposable incomes, affordable SIM registration and airtime charges. All these factors have assisted in owning a handset increasingly affordable to masses in the past 10 years. Additionally, with the rapid advancements in the technological field, the introduction of innovative features with sophisticated technologies that have potential to live up to the customers’ growing expectations has become more of an industry norm and a challenge for existing players to survive in the market.

Understanding the growing appetite of Indian consumers, a large number of local players such as Micromax, Spice, LAVA, and Lemon have jumped into reap profits on the back of local advantage such as relatively better consumer understanding. And, to everyone’s surprise, these players have also been successful in their drive as they now enjoy a huge share in the domestic handset market. While the leader, Nokia is way above other players, in terms of market share (volume), accounting for more than 50% of the domestic handset sales, the new players have miraculously grabbed approximately 14% share of the overall market, as per the industry figures.

These are the companies which seem to have hit a jackpot in the domestic market in terms of volume sales, as they now jointly stand at the 3rd spot in the Indian handset market, right behind the market leader Nokia, and Samsung. The level of achievement for these players seems way higher when one comes to know that almost all the global handset manufacturers are already present in the market. A key point which has enabled these players to grow so fast is the level of innovation they have brought into the market, something which seems to have forced even the leaders to follow. The trend is validated by the recent launch of dual-SIM handsets by domestic leader NOKIA. It were these local players, which introduced such innovative and value-added features in mobiles, as the one with nearly 30 days of battery back-up, and dual SIM card options.

Future Prospects:

Presently sprinting on a high speed track, the Indian handset market is poised to touch record levels by 2015 in terms of volume sales. A major sales growth is expected to come on the back of rising disposable incomes, growing demand for innovative features, applications, and offerings such as the ones recently introduced by local players Micromax, KARBONN, and LAVA.

The mobile handset teledensity (handsets per 100 inhabitants) in India currently stands at nearly 45%, representing a huge untapped market, especially the rural sector. The industry leader, Nokia seems to have felt the market pulse as, during the period 2009-10, the company introduced more than 20 devices through a vast distribution network of 200,000 retail outlets, out of which nearly 45% were based in rural areas. Moreover, with the urban markets touching saturation levels, the focus is bound to shift towards rural sector, where customers are highly price sensitive and most of the purchase decisions are taken on the POS (point of sale) only. Additionally, in the rural sector, sales are primarily driven by factors such as easy affordability, quality, and at times easy-to-use features.

The introduction of 3G services is expected to be another crucial growth driver in the domestic market as it is expected to push demand for high-end handsets to new highs, especially for the ones with 3G feature. This would certainly work in favour of handset manufacturers which are increasingly strained by the ever declining handset ASP. The forecast is validated by the huge interest received from mobile network operators during the recently completed auction of 3G licenses, reportedly generating a whopping INR 650 million for the government, as operators realise the untapped potential of these services across the country. However, in contrast to the global counterparts, India, though being a developing nation, lags way behind many developed nations, such as South Korea, Japan, and the US, where 3G entered almost at the start of the 21st century. That’s one of the reasons India offers a lot of potential for global handset manufacturers in terms of both new and replacement handset sales, compared to the developed economies where mobile teledensity ranges between 90%-100% and hence offer less scope for new handsets.

Hence, it can be inferred that as the country enters the 2nd era of revolution in mobile handset market, where focus shifts from mere owning a cellphone with limited features to the one featuring all the advanced capabilities, such as QWERTY keypad, 3G, and high quality camera, the high-end models, especially the smart phones, are expected to witness a steep growth curve through 2015. On the other hand, despite the estimated growth in demand for high-end handsets, it would not be illogical to forecast that the low-cost handsets would still account for a majority share in the handset market in terms of volume sales, considering the fact that this category continues to witness consistent decline in ASP, as majority of the new players are targeting this category with innovative offerings.

—

Vinay Mudgil

The Indian retail industry has been hailed as sunrise sectors of the economy. India has been recognized as leading Retail destination and whole world is eying on it. Retailers globally are effected by stagnation in consumer demand in their home countries, and so double digit growth in consumer demand in India looks like hot cake to them but the same is secured by FDI policies in India. Keeping these facts in mind, it was no news that US President Barack Obama was pushing India to liberalize and open its FDI policy for multi-brand retailing. He said that the stereotype concern that small shopkeepers in India will be impacted, ignores today’s reality.

As we know, currently India allows 51% FDI in single-brand retail and 100% FDI in cash-and-carry stores who can only sell to other retailers and business concerns and not to individual consumers who shops for home consumption.

FDI in Retail has always been a very sensitive issue in India. Supporters of FDI have been highlighting positivity it will bring to Indian economy like greater efficiency, better selection, improvement of living standards, integration with global economy and of course price reduction as a result of better technology and knowhow. But at the same time, people opposing it feels that it is a labor displacing act and will jeopardize unorganized and small retailers of India as well as Indian Retail Players. They believe it will effect balance of our economy when these foreign investors will draw billions of rupee as profit out of our consumer spending.

But if we see many other developing nations like China, Malaysia, Thailand etc., have opened up there Retail Sector without much problems. They faced some hiccups but then they introduced conditional laws to check expansion of foreign Retailers in their country and hence restored wellbeing of locals too. India also need to adopt similar approach where they analyze possible barriers to FDI and ensure that they are addressed in their policies while lifting FDI.

If we see GDP composition of Indian economy, Service sector contributes most, followed by Manufacturing and then Agriculture. But for a developed economy, contribution of Manufacturing sector should be most as it indicates more of saving for the economy. Opening up Retail may result in some losses in Service Sector but if it is accompanied with proper conditions and policies safeguarding interest of domestic retailers and small players it will be fruitful. We need to open it up with conditions which will boost our Manufacturing and Agriculture sector which will not only compensate loss in share of Service sector, but will also bring Profits from rise of Manufacturing and Agriculture sector. Some of the conditions and their benefits which I can think of are as follows:-

• Fixing quota of Indian make products in their offerings in India. Say for example if they are offering Rs. 100 values of products, than Rs. 80 worth products should be made in India. This would increase demands of Indian Products and will boost Manufacturing sector too.
• Above clause will encourage them to get manufactured some goods in India as there private label. Cost of manufacturing some of these labels may be too less and so Retailer may export it to their outlets in other countries boosting India’s export.
• Govt. can impose that 100% of Fruits & Vegetables they are offering are produced in India. This will encourage contract farming by these Retailers in agreement with farmers ensuring high quality produce and better earnings to poor farmers of India.
• Further Govt. needs to monitor Prices in order to ensure that price efficiency of these retailers is not killing small Indian players. One of the way will be higher taxation on foreign Retailers.
• Government need to analyze the possible harm it could do to Indian Retailers and put appropriate conditions to ensure safeguarding their interest.

But again a big question which arises in our mind is that is our Govt. capable of finding such conditions and open Retail Sector in structural way? Keeping in mind corruption and bureaucracy in India, implementing it would be a challenging job. And if Retail is opened up without such terms and conditions, then it may turn as a grave error for India!

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

- Rajeev Damani

Its about your image, its about your brand, its about your fans and its about your positioning. A Logo of a company depicts lot about it. It is a face of a company which talks to its customer and consumer feels attach to it and to its owner company. And company spends lots of million for the same to promote it and make it a top of the mind recall for particular commodity. So when its done, when a company have a perfect, popular brand logo, then why they changed it. Like Rebook, B.P., Pepsi to name some, even having a good and recognized and honorable logo, they changed it and then again spent some more millions on marketing campaign to make their new logo their new identity.
But the question is why they did that, why they spent a good portion of their bottom line on redesigning a logo which was already on its ace. The reasons can be many depending on what the company trying to achieve. One of the obvious one is “connect with new generation”. Every new generation likes new stuff as they can connect with that really well. It’s the thing which is happening right in front of their eyes which they remember. They don’t even bother about what happened before their birth. At least I never liked History (as a subject ). So for every generation a re-branding should be done. And to give a new look to logo is a best way to do it. Very recent example which I can think of to demonstrate this reason is redesign of “Belk department store”. Other reason which I can think of is, we become habitual to things we see every day and we generally skip those things unintentionally. So until and unless you see any new thing your eyes won’t get attracted to it and thus normally we skip all the big hoarding and marketing done by our old renowned brands. But when they change their logo we tend to look at it, we notice the change and we recall the brand. Some more reasons can be brand imitation, merger or new identity of company itself, or may be if company wants to change their positioning.

Now in the age of social media, companies can opt for a better way to redesign their logo which is contemporary and close to their target audience. They can use social channel to involve their fans and followers to suggest new look they want in their fav brand. This way the process make brand closer to their customer and definitely it’s a plus point for a company. In this consumer driven era this is a right thing to do I guess.
BTW logo of Google on their webpage, is a totally different story and a different approach which I think can only work online.
Readers do share your views on re-branding and new logo for brand. If you have any case study to share, please share it and we can have a discussion on the same.

-Prateek Katiyar

The annual AT Kearny GRDI report ranks the 30 top retail destinations across the globe based on its growth, risks and markets. The ones mentioned are a few of several other parameters. India slips to third spot after emerging as a leader last year. Shuttling back to the top spot is China going all out to grow its confidence to the world retailers. And a surprise entry at second rank is Kuwait.

India today is considered as a mature market where there has been significant growth and now can only has to sustain its growth. Although there are tough challenges that lays ahead, retail in itself is undergoing a consolidation process of its own. If the economic downturn brought some sense into the retailers, there is still a lot of sensibility that has to grow in. Having deep pockets isn’t just enough to give you the biggest pie share. Consumers are now used to the buffet of services which the retailer had once used to lure them in the race to grow and now, they are setting up standards of their own. Global standard on sustainability and greening is just piping in more standards. The new taxing systems to be induced will make life difficult even for private labels. The real estate bubble finally went bust and the rentals gave some respite but still don’t deliver on quality space even today. The retailers in my opinion should keep it tight, close and integrated and stop experimenting with formats.

The most preferred way of entry for retailers and consolidation according to the report will be the Tier 2 and 3 cities where the whole focus has now shifted. The mad expansion in the metros is now over; it’s the time for the other tiers that prefer the Hero Honda to the Harley, to get flooded. The retailers propose to tap the bludgeoning middle class population, but they mustn’t forget that they will still be the stricter price and quality conscious customers. I have seen V Marts, Vishal’s and Big Bizaar’s close and cut down floors in these towns. Seasonality of shopping marked by occasions and festivals will be the key to the survival here and so, the franchising model looks as promising which will kick in the go-getters of these towns.

A major challenge to the retailers is the ongoing debate on foreign direct investments, which doesn’t seem to end anytime soon. The Indian Government still bears the fear of compromising their locals’. They fail to understand that high flying brands won’t be much effect but to allow investor groups to retail firms which can make a significant improvement in the Tier 2 & 3’s. That’s what is going to keep the GDP a flyer. Has it ever considered Wall Mart, Carrefour or Tesco to partner in absolving the misery of food grains rotting in the godowns and allow them use their masterful supply chain accomplishments? Not to forget the jobs it would create. A quick look at the FDI index will allow you to measure that access to new markets and building capacity is on priority list of all investors.

Green everything, is the new mantra. I just wonder what future it holds to JV’s, acquisitions, mergers and investments hold as the carbon credit values go under revision. Under strict EU norms and the UN (CDM) the Europeans will reach out to countries which will minimize their carbon taxations. What happens to India as a destination with the entire infrastructure lying haywire? Is a Green Supply chain even remotely possible?

Now, is the time for our domestic retail conglomerates to let go and share some of individual resources and build upon a collectively strong unit, one which is capable of rebounds.

Cheers

Sudip

Modern Retailers are totally IT dependent. No doubt that IT has helped Retailers to control their operations efficiently and reduce cost but it has few drawbacks too. Retailers become helpless when their IT system fails no matter whether it is a virus attack, software bug or a hardware breakdown. In spite of precaution and preventive measures which Retailers might have taken to avoid these, they are bound to happen sometime or other. And whenever they happen, it causes risk to their most valuable digital asset – ‘’Data’’.

Retailers now a day’s operate round the clock and take care of minute things due to competition but they put their productivity as well as profitability in stale by not taking adequate measure to back up and protect their data. A study revealed that almost 2/3^rd of the retailers takes a day or more to recover data due to system failure. Just imagine a scenario where a retailer is not able to access the data for last 24 hrs:

• No record of what sold in last 24 hrs.
• Stock matching cannot be done.
• No idea of what to order to keep shelves full.
• Record of new customer added to customer database for the day lost.
• Customer queries etc. for the day lost which will cause dissatisfaction to customers.
• Records of CRM and Loyalty program for the day at stake.
• Sales based incentives of employees for the day lost.
• Cannot verify cash.
• Details of the goods returned by customers lost.

Many retailers back up their servers at HO and also take regular backups. Servers are the lifeline of IT infrastructure and it’s necessary to ensure that they are safe and backed up. But still a large chunk of retailers do back up manually on even don’t do at all! Not all data which an employee is working on is on network as they keep them loosely on desktop and work on them even when they are away from network. As per an estimate almost 60% of organizations data are on workstation and not on their servers. Thus retailers need to ensure that both servers as well as workstations are backed-up automatically.

Frequency of Back-up:

How often retailers backs up data is again an important factor. Though most of the retailers back up every day end of the day, many even wait till end of the week which is suicidal. Greater the frequency lesser will be the loss from such disasters. A safer approach is to have automatic back up few times a day.

Test your DR (Disaster Recovery) Strategy:

Having regular successful back-ups and structured DR Strategy makes Retailers confident that they will be able to recover their data. But majority of retailers don’t even test there DR Strategy once a year also. Retailers need to understand that if they don’t test it regularly than it might not work when actually required, putting all efforts in vain and will put all their data on stake causing huge losses. To be on safer side, they should test their DR strategy quarterly.

Off late, loss of data has become a primary concern for retailers and has significant implication on their finance and productivity. A bad DR Strategy can challenge business continuity of the Retailers whereas a sound one can minimize the risk from such disaster.

- Rajeev Damani

With the domestic retail market witnessing a gradual revival, mall owners are implementing various schemes in order to expand the sources of revenue generation.

As store vacancies in malls started to swell during 2008–09 in a psychological recession plagued India, developers tried to hold their bleeding noses, trying to look out for additional sources of income to give a push to their operating revenues. Although necessity is the mother of invention, the latter soon becomes a habit and then culture. Such is the case with most promotional or additional revenue generating activity that present-day malls practice on a routine basis.

Major Sources of Additional Revenue

Some of the non-conventional ways in which additional revenues are being earned by shopping centres over and above the ‘fixed rentals from their tenants’ include the following:

Temporary leasing area: These are referred to the vacant stores that are let out to vendors. It could be a fixed kiosk wherein different retailers display variety of merchandise and operate on a rotational basis. Certain service kiosks are also mushrooming at present such as kids play area, tattoo stations, photo stations and spas, among others. Lately, developers are eyeing to rent out their vacant stores for exhibitions as well as small gatherings.

Events: Almost every mall these days has some buzz in the air about an upcoming or an ongoing event. These events were initially conceived as promotional activities, but at present mall marketers use such events as brand building activity. Either ways the idea is to generate extra revenue.

Over the years there has been a steep increase in the types of events that are organized. Categorically they can be demarcated into:

· Mall events such as celebration on Valentine’s Day, Republic Day and such other
special occasions.

· Mall tenant events such as store launch parties, fashion shows by apparel brands and organising musical evening for brand promotion including visits of brand ambassadors, among others.

· Events as venue partner are witnessing an upward trend as mall areas are rented for brand launches, IPL related events, events in collaboration with various television/radio channels etc.

· Organizing corporate social responsibility oriented events that are not aimed at colossal revenue generation but certainly help mall retailers to connect with customers. Events organised in association with NGOs on occasions such as Women’s Day and Labour Day along with free health and yoga camp are picking up pace.

Promotion and Advertising: Different revenue generation activity through advertising are not only meant for tenants but are also undertaken by most brands/organizations. New product launches in a particular store can be advertised through floor graphics, standees and even drop-downs leading to the store. Companies utilize digital and graphic signage like Wi-Fi, Bluetooth and plasma screens to promote their products in malls. In return they pay rental charges, thereby generating revenues for mall owners.

Miscellaneous sources: Other sources of revenue churners could be a range of services such as valet parking, gift coupons and crèche facility, among others in order to create extra revenues for the smooth functioning of malls. Although these are used only by a fixed percentage of people, they do provide an impetuous to revenue generation.

Malls developers, nevertheless, have to keep greasing their elbows and constantly strive to differentiate themselves to maintain a competitive edge. Malls will have to keep opening up innovative ways of revenue generation. This will not only keep the average Indian shopper interested but also withstand economic backlashes in times of restraint. Developers will have to conceptualise, plan and provide for these activities
right from the time they are putting up the pillars. Innovations will age and become habit but constant innovation will keep feeding ‘the mall-ers’ with ‘extra bites’.

Himani Paul
Commercial Manager
SEGECE INDIA Pvt. Ltd.

]]> http://bimtech-retail.com/blog/2010/malls-find-%e2%80%98new-ways%e2%80%99-of-revenue-generation/feed/ http://bimtech-retail.com/blog/2010/new-shopping-avenue-for-indians/ http://bimtech-retail.com/blog/2010/new-shopping-avenue-for-indians/#comments Tue, 13 Apr 2010 12:59:55 +0000 Prateek http://bimtech-retail.com/blog/?p=1278

Social media tools like Orkut, Facebook, Twitter, Buzz etc. introduced a fun element in teaching. Don’t be surprised I am not going to talk about education in India. Actually these tools helped India to raise its computer literacy rate from single digit to double digit, which is one of the important factor to promote etailing in India. I will give credit to IRCTC & Makemytrip for making Indian consumer more comfortable in doing online transactions, but will appreciate social media tools how they boosted “e” presence in India.

The volume of online sale is still less but this mode of shopping is catching popularity through word of mouth, and retailers are bidding on ecommerce growth. Thus we can see “Future group” online shopping destination as www.futurebazaar.com, “Shoppers stop” virtual shop as www.Shopperstop.com and www.themobilestore.in of “The mobile store”.

By the way India has its virtual stores since mid 90’s, and the players like “IndiaMart” and “Fabmall” now known as “Indiaplaza” are among those who established a stepping stone for ecommerce in India. Now we have many such online shops where you can find anything ranging from furniture to T-Shirts and books to gadgets such as www.homeshop18.com, www.shopmania.in, shopping @ sify, rediff and indiatimes, www.retailsdirect.com, www.indiavarta.com, eshop.webindia123.com etc but they lack leading brands. They have “Your brand dual sim phone” but not a “Philip DVD player”, but with retailers opening their online store things are changing but they still have very limited merchandise on their online shop. I hope soon we can see range of branded merchandise from Levis Jeanswear to Titan watch.

After doing some research I was able to draw a profile of Indian shopper - An Indian Online shopper is a “male” of age between “18- 35”, is a graduated doing job and prefer to shop from its work location. Women still prefer brick and mortar store and don’t want to miss trails and store ambience.

Recently Google also launched their shopping tool for google.co.in domain where you can search your product and can see results from all this online shops. All these things indicating a detour for shopping – an online store – new shopping avenue for Indian Shoppers.

- Prateek Katiyar

No, my post is not about any upcoming movie of David Dhavan on his no. 1 sequel.  But it is about we Indians who are consistently topping the survey called ‘Global Retail Theft Barometer’. It’s an annual survey which was conducted third time in 2009 covering 1,069 large retailers spread across 41 countries in globe. India yet again topped the survey with Retail Shrinkage at 3.2%.

In layman’s language it means that Rs.3.20p worth of good is shoplifted in India for sale of every Rs.100 worth of goods sold in Indian Retail Industry. We are not only leading the survey but are far ahead of the runners up. The runner up i.e. Morocco is at 1.79% and then Mexico at 1.75% and so on. Taiwan had minimum shrinkage i.e. 0.89%. Indian shoplifters prefer stealing gadgets, fashion product, alcohol, apparel and jewellery over other stuffs as they are more valuable and easy to lift.

I won’t talk anymore about statistics in my post as they are easily accessible on little bit googling but I would like analyze that why are we topping it regularly. Considering our economy and way of working of Indian Retailers, I feel that followings are root cause for such higher shrinkage in Indian Retail Industry:

• Retailers in India are not tech savvy. They do not use latest security systems for Retail Loss Prevention. This is gives opportunity to commit such offence.
• Most of the processes in Indian Retail Industry are still having lots of Manual Interventions. For example goods receiving process at store. Thus employees take advantage of these manual processes.
• Employee theft accounts for one of the major chunk of Retail Loss.  One of the major drivers for them is lack of job security which in turn reduces their loyalty.  Employee engagement & relationship building activities are very rare. Compensation, HR Policies and incentives are not comparable to other industries. Thus employees don’t have long-term commitment with their employers and they don’t mind committing such nuisances.
• Corruption in India has also played role in it. There are so many scams and crime which keeps happening in India and the culprits are not caught or punished severely. Consequently, customers don’t even consider an act like shop lifting as crime only.
• Retailers in India do not showcase their policies on Retail Theft to customers. It could be a good practice to display them at locations like entrance, cash counters etc.
• Shopping Malls and Stores in India are generally too much crowded especially on weekends and space is too less in comparison to crowd.  This gives opportunity to shoplifters to execute their art.
• We don’t have Retail Laws for punishing the offenders of Retail theft in place and it is considered as normal theft. Moreover Retailers are generally scared of messing up with Customers specially the educated class knowingly that they have committed the crime.
• We Indians are innovative and intelligent breed. Before the development of a security system, we find the way to crack it. So, no wonder that we are leading this survey!
• The global recession which has just come to an end is one of the possible reasons for rise in Retail Theft in India.
• Poverty in India is one of the major reasons for consistent performance in this survey.

These are the possible reasons I can think of as of now. I would appreciate any additions/discussions on these 

———————————————————————————–

- Rajeev Damani

With only a dozen of malls surviving out of more than 200, I think the picture of Indian malls is fading gradually. This is the scenario of the Indian Malls at present and I presume it will be enough for the readers to envisage what I am going to mention.

It has been almost one decade of presence of shopping centres in India, as the first center appeared in late 90s - Ansal Plaza, New Delhi and since then the expansion really accelerated in 2002 – 2003. In the year 2008 – the year of economic slowdown, the development was less than expected and it is evident due to the fact that:

• 34 centres were opened (whereas 74 were planned for opening at the beginning of 2008)

• 8, 50, 000 square meter GLA (whereas 1,800,000 square meter was expected)

Besides the economic downturn, the problem also comes from the developers and retailers. In order to understand them better, a detailed study of the same is given below:

A.) Developers - The Greed for More

On one hand, it is good to see Indian developers investing and providing excellent infrastructure to the country which certainly enhances the overall image but on the other hand it is disappointing to see the blunders done by them for their own properties. Personally, I believe that a developer can accord to both Residential and Commercials at one time but when it comes to Shopping Centres (SC); they should not fire at their own feet!

The following attributes will give a brief idea of the mistakes done by the developers in past:

1. Poor site selection:

Selecting a location without even analyzing about the primary catchment area is a mistake commonly seen. There are many instances in the country wherein erecting a mall at National Highways has been a failure.

2. Vertical expansion:

This country has seen a lot of vacant malls with multiple floors. The ideal case is to have a shopping center with lesser number of floors no matter even if the size of the shopping center is small.

3. Commercialization Issue:

Poor commercialization is like a house built on sand - it will fall down any day. The first objective should be to position anchor stores in their respective position and second is to attract the vanilla brands by using anchors as a tool. It is also important to note here that with a good floor plan and bad commercialization, things could still work but poor floor plan along with good commercialization may lead to irreversible changes.

4. Lack of professional advice:

It is always better to take professional assistance before the commencement of project rather than after its completion, which undeniably reduces the scope of improvement as well as increases costs more.

5. Design issues:

It is rightly said that easy plans normally work, the more complicated you make, the more difficult it becomes. There are many instances like: the strange floor plans - proving to be a hurdle for the shoppers, no sitting arrangements, unplanned tenant mix – not making a mall a destination, low quality local stores or kiosk and so on that is diluting the overall image of the project.

B.) Retailers – Irrational decisions

The slowdown of 2008 has been a great lesson to the Indian Retail companies; they call it lately as correction! Before the year 2008, the expansions had been enormous but now the buzz is “expanding but cautiously.” After reading the factors listed below, one can certainly say the retailers have burnt their fingers themselves:

1. Juvenile expansion:

Before the downturn in 2008, the retailers used to expand frantically almost in every SC without giving much importance to factors like location, catchment analysis, long term vision, presence of the actual buyers, reputation of the developer and much more. These lead to problem of surfeit for which the retailers are still in distress.

2. Sky –scraping commercials:

During this massive expansion, the retailers were at ease to pay high fixed rentals which resulted in high fixed operating cost. Equivalently, the slowdown had a direct impact on the turnover which landed retailers in a miserable condition.

This resulted either in closing down of unprofitable stores or re-negotiations with the developers to reduce the rentals.

Thus, the term Revenue Sharing was introduced; convincing people of the fact it is a Win - Win model.

3. Brand visibility was more important than store profitability:

The expansion (prior to year 2008) accelerated in the most imprudent manner considering the fact that brand visibility* is more important than store profitability leading to calamity for many!

*For retailers, the numbers of stores are directly proportionately to brand visibility whereas store profitability is the result of high turnover and low operating cost.

4. Poor store visibility:

In order to enhance brand visibility; more and more outlets were opened which lead to poor project (mall) and location (store) selection. This yielded in low turnover and wastage of enormous capital expenditure on every store. The selected locations were so poor that even with the best marketing and information tools; no one was aware about the existence of these stores.

Hence, it was a Win–Lose situation wherein; the developer was successful enough in leasing out his space but not the retailer!

The road ahead:

The coming year will have a lot of consolidation. The existing smaller or vacant malls will either be converted into commercials or will be acquired by the larger players. The commercialization strategy will improve as the developers have seen enough and have learned to reject the worst and select the best. The tagline “everybody is welcome” will no longer be entertained and the landlords will be more selective in case of tenant mix and assigning locations.

Conclusion:

To assimilate the above, complete and professional asset management services are required to assist the developers and to create a good balance between the customers, retailers and the owners. It is possible by correct succession of steps beginning from thorough market research till the designing of the property.

Considering the fact that Indian real estate market has high potential and long way to go; the current phase demands improvisation through professional consultancy and other allied services. It is the time to see how owners employ the best use of these services in future.

And if all this is incorporated, one can hope that Indian Malls can once again be on a path of glory.

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Amanpreet Singh Banga
Commercial Manager, Segece India, New Delhi, India