by Mr. Pankaj Renjhen,
Managing Director –
Retail Services, JLL India
India is famous for its
traditional markets and shopping streets that offer speciality products,
entertainment and leisure interface. With emergence of organised retail and
shopping malls, there has been profound evolution in the Indian retail
industry.
Due to changing aspirations of Indian consumers and coming up of
international brands, shopping malls are themselves adapting to meet the
changing requirements.
The retail
real estate industry is gradually maturing and going towards the next wave of
evolution because of the increasing competition from e-tailing. Within this
process, there is a need for developing shopping centres that provide a more
specialized experience to shoppers with specific needs.
The Speciality
Malls that
emerged a few years ago to provide such services left a lot to be required.
This is now changing, as well.
What Are
Specialty Malls?
Speciality
Malls cater to a particular retail category. Malls offering brands of a
particular category such as gold, automobiles, wedding, furniture, lifestyle,
home etc. are called speciality malls. Simultaneously, malls which offer
products of a particular positioning can also be termed as Specialty Malls – for
example, malls offering luxury brands can be termed as Speciality Malls.
Currently,
there are very few specialty malls offering focused categories and brands in
the country. From the leasing perspective, it is quite difficult to fill in the
entire shopping area of only one particular category and at the same time
achieve optimal rentals. Also, there is lack of sufficient retail players
belonging to a particular category who can contribute to achieving the depth
and critical mass imperative for the successful functioning of a shopping mall.
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| Mr. Pankaj Renjhen, Managing Director – Retail Services, JLL India |
While some
of the high streets in the country offer speciality products such as ethnic
wear or wedding apparel, they also host other categories working together with
the niche categories.
The
speciality retail real estate developments that are working successfully in the
country belong primarily to the F&B and entertainment category. Such developments include DLF
Cyberhub in
Gurgaon and Sangam Courtyard and Epicura in Delhi, which are dedicated
exclusively to F&B brands. DLF Cyber hub not only offers gastronomies of
various varieties, but is also acting as a cultural centre organising various
art festivals and programmes.
Some
category-specific malls like jewellery malls have also worked well in India.
However, a predominant number of consumers still prefer to visit the
traditional jewellers located in high streets. In some cases, malls which were
earlier developed to cater only to a particular category are repositioning
themselves to include a more comprehensive trade and tenant mix.
For example,
malls which exclusively offer jewellery have also incorporated some element of
F&B, leisure and convenience-oriented categories such as spa and gym.
Globally
also, jewellery malls that are part of a larger or integrated retail development
are operating successfully. For example an indoor souk is located inside the
Dubai Mall.
The other
type of specialty mall that has worked in India is based upon positioning –
such as DLF Emporio, which offers
many luxury retail brands under one roof. DLF Emporio is located in a cluster
of malls that offer premium categories, and also serves as a bridge to luxury
products.
It is a unique luxury shopping destination which dovetails well
with other nearby malls offering a more holistic shopping experience, such as
DLF Promenade and Ambience mall.
As
consumers’ aspirations rise in India, they seek variety as well as depth in
shopping experiences. Therefore, a speciality mall as part of an integrated
retail development offering a niche, or products belonging to a particular
category, would work well. Also, integrated retail developments help add to
footfalls of niche categories, and vice versa.
With growing
competition from online retailing, F&B and entertainment are the categories
which many shopping malls will be focussing on. Retail real estate developments
that particularly focus on F&B, entertainment and niche fashion brands may
be conceptualised in the future. Shopping mall developers are particularly
focussing on international food chains so as to increase the attractiveness of
their retail spaces. F&B and recreation has now emerged as an important
component of the trade and tenant mix for any retail development.
Speciality
malls attract targeted footfalls and a regular customer base; therefore, they
should be lodged in an ideal location and catchment. If there is absence of the
required commercial or residential population, then the success of a speciality
mall would be doubtful. The success of a specialty mall depends on an
amalgamation of location, design, ambience as well as demand from consumers and
supply of enough brands belonging to that particular category.
The
conversion rate in speciality malls is high, as a focussed group of consumers
who are guided by a planned approach visit them. The footfalls may be lower
than in a general mall, but the conversion rate would be high – thereby
generating enough sales for the incumbent brands.
Proper
research and a structured approach is needed to develop specialty malls, as
their success depends upon demand and supply dynamics as well as the financial
feasibility of particular categories. Theme-based malls attracting tourists and
residents alike may be conceptualised in the future, but they would require a
unique offering or differentiated entertainment avenues for attracting large
footfalls.
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