The development of unorganized retailing into an organized one in the form of shopping malls was a new concept for India until recent years. With the changing shopping needs and aspirations, consumers are finding it easier to shop at malls where a wide choice of merchandise is available under one roof which comprises the reasons for the growth of shopping malls in India. Thus bringing hundreds of bulk buyers under one roof is fast emerging as a new concept in the country. It gives a far better ambience removing the hustle and bustle of the narrow lanes of market.
Malls have changed the way people used to shop but its time when malls too are changing. The emerging concept of themed based malls also called as specialty malls has changed the traditional outlook of the regular ones. They provide better shopping experience to their customers. The themed based mall caters specific need of the people and have specific target market segment. The success of these malls is entirely dependent upon the catchment areas, diversity with the product category and brands, the demand of the product/brands in the city and overall experience in the mall by the niche segment of customers.
In such kind of malls, the range of goods plays a critical role in attracting customers. India is still a nascent market for this kind of malls. These malls are now operating in many cities in India including tier 2 and 3. Prosperous northern cities like Jalandhar, Ludhiana, and Patiala are gaining importance among retailers for theme based malls catering to niche customers for automobiles and jewellery. Some of the theme based malls existing in India are- Gold Souk (jewellery malls), Wedding Mall, Electronic Mall, Auto Mall, etc.
With a rapidly expanding population of high net worth individuals, India has become one of the world’s five largest markets for luxury products and this sector is expected to grow at a rate of 15-20 percent per annum over the next five years. According to the retailers association of India these malls will take up 10% of the total malls in India in near future. There is great diversity in the Indian customer base and developers are beginning to understand the particular needs and aspirations of different market segments.
In the last ten years, there has been a proliferation of traditional malls across India but demand is now creating a focus on niche markets and the necessity to provide differentiated shopping experiences. Success here is not judged by footfall but by high conversion rates as they target serious buyers. Research has also shown that the conversion rate for customer walk-ins into sales are as high as 70 to 80% in speciality malls as compared to 8% to 10% in traditional malls. The entry of organised players into retail development and mall management in India would help address issues like project execution and operational efficiency.
The concept of theme-based retailing is likely to gain more momentum in the coming years. For India to grow further in this industry, it will require investment by both domestic and foreign players, attracting international retail investors wanting to enter newer markets. The ramping up of operations with big investments by both domestic and foreign participants in retail is likely to facilitate greater diversification, leading to the growth of specialty malls, thus transforming fundamental shopping format to unique selling proposition/concept.