Malls are a place to rejuvenate, socialise & entertain

Aman Singh Gehlot, Director, Ambience Limited, feels malls have evolved now as a centre of urban lifestyle and a favourite place to hangout. In a candid conversation with Retailer, he sheds light on the appropriate mall retailing strategy as well.
Malls are a place to rejuvenate, socialise & entertain
Aman Singh Gehlot, Director, Ambience Limited, feels malls have evolved now as a centre of urban lifestyle and a favourite place to hangout. In a candid conversation with Retailer, he sheds light on the appropriate mall retailing strategy as well.
 
Do you think malls are instrumental in changing shopping and consumption pattern of the catchment?
The shopping malls have intercepted the traditional marketplace culture and are instrumental in shifting the consumer behaviour in urban areas. The modern or organised retail sector in India is reflected in sprawling shopping centres in the form of multiplex-malls that offer shopping, entertainment, and food all under one roof—ushering in a shopping revolution in India. An increasingly urbanised demographic, opening of the FDI for retail sector, rapid development of shopping malls, an emerging class of brand-conscious consumers, and various influences from the Western world have changed the face of the Indian retail industry. A growing number of Indian consumers want products, communication, entertainment, and marketing efforts that arouse their senses—they expect shopping to be a fun and entertaining experience. Malls are not only a shopping place but a place to rejuvenate, socialise and entertain. Certainly, shopping malls are bringing in a new culture in India which is different from the traditional culture as far as shopping is concerned.
 
How do you think the mall retailing pattern has changed over the years and what are the five key changes you have observed?
India has witnessed a frenetic pace of retail growth in the last five years. This has led retailers to concentrate their energies and leverage their capacities to harness the potential. The prime reason for a paradigm shift in the shopping attitude of the Indian consumer is the change in their preferences and tastes. Malls today have devised the strategy of adopting quality and styled products with new models and shift of advertising from product awareness to product preference. The idea behind adopting this strategy is to strengthen against competitors. Malls have also begun aggressively campaigning themselves as weekend destinations, and the combination of shopping, food courts, movies and live events all in an air-conditioned environment has begun catching on. 
 
How do you feel international brands have fared in our country and how malls have contributed to their growth?
India is currently attracting considerable international brands and business investment. Almost all of the large European retail chains like Carrefour, Zara, Diesel, Marks and Spencer, Debenhams have a presence in India and many more international premium, bridge and luxury brands are entering into the country. Due to the increasing use of IT and telecom, Indian consumers have become aware of global brands and shops for lifestyle and value brands according to the need and occasion. Consumers will continue to drive the growth in the organised retail by expanding the market and compelling malls to widen their offerings in terms of brands and in terms of variety. This has further opened window of opportunities for more global brands to enter India. The elements of good music, efficient use of space, window-shopping opportunities, a one-stop shopping destination, fine-dining restaurants, and fast-food eateries of worldly cuisines offer a perfect hangout joint for the young. 
 
Do you feel retailers are hesitant these days to select malls because of the high-rental charges?
As the number of malls increased, rentals have moved from flat rates to a combination of rentals and revenue sharing models. In about four to five years, any good mall is able to command as much as high streets. On the high street, most properties are owned by the retailers, thereby shrinking supply and this contributes to escalating prices. People are beginning to see the upside of shopping in the comfort of a mall and that is the way forward for retail. 
 
There is a good number of non-performing malls in India. According to you, what kinds of malls are performing well in India?
Demand projections for mall space in India are lucrative; however, the growth of malls in India over the last decade has suffered from issues such as the high cost of real estate and construction, poor infrastructure, a non-conducive policy framework, lease vs sale model of the malls and the unavailability of professional expertise in mall development and management. This has resulted in undifferentiated malls, plummeting occupancy levels, and reduced profitability for tenants and malls. This resulted in clustering of almost identical shopping malls. Lack of concept planning and zoning is another serious issue. All kinds of tenants are accommodated at all possible locations inside the mall. Such poorly planned and executed malls fail to ensure 100 per cent occupancy at the time of commencement of operations, or see plummeting level of occupancy because of non-renewal of lease by existing tenants.  
Aman Singh Gehlot
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