than 300 new malls are going to be operational by
India is experiencing a revolution in the retail market.
The organised retail market, which is just 3 per cent
of the overall retail market, is expected to grow
from Rs 28,000 crore to Rs 1,00,000 crore business
by 2010 as per an Images-Technopak research report.
Around 300 new malls are going to be
operational by 2006. The National Capital Region is
likely to see 75 malls coming up by 2007. The mall
mania is spreading from metros to smaller cities with
population between 30 lakh and 50 lakh.
The majority in the market believe
that most of the shopping malls are likely to suffer
from huge losses and those without deep pockets
might shut down in the long run. An average 75,000-150,000
sq ft mall requires an investment of Rs 40 crore-Rs
75 crore. And as per estimates, it takes 3-4 years
to achieve breakeven.
an industry expert, the problem lies with the management
of these malls as he says, "In
India most of the malls are developed by real estate
companies which sell the space at very high rates
to book instant profits. They don't have the expertise
to run a mall on professional lines with a long term
vision. Majority of the malls in India are not planned
and marketed properly."
In India, most of the shop owners
in malls complain that majority of the visitors just
uses the ambience to pass their time. The conversion
rate ranges between 10 per cent and 20 per cent only.
In India, on an
average, on a busy weekday, a mall in a prime location
attracts 10,000 to 15,000 foot falls which goes up
by 75-100 per cent over the weekend. Compare this
figure with China where a good mall gets 600,000 footfalls
in a day!
In the US, the
malls are managed by companies which specialise in
mall management. You might find a number of
companies there which manage even 300 malls also.
The builders don't own or run the malls. That's the
reason why 60-70 per cent of the US retail market
belongs to the organised sector
The industry will cross the Rs 35,000-crore mark
by next year itself. The projected growth rate for
organised retail is 25-30 per cent.
NRI real-estate, large builders and developers,
who are investing in mall projects, now little worried
about this trend of fast decvelopment.