Shopping centers in India is a successful business model. This article is based on the report: ‘TCCx: Redefining the future of Retail Malls – The Interplay of Technology, Capital & Customer Xperience’. Citizens adapted fast to changing retail and habituated to clean malls with air conditioning and parking.
Shopping in India is a popular time pass activity. Because of hot climate it’s really hard to stay outdoors for long time. This is main reason why shopping malls in India on rise (it will never lose popularity). Rapid movement from kirana shops (small, dusty, no air conditioning, only cash shops) to large multi format shopping malls happened in last 20 year. Modern style shopping centers came into existence in the late 90’s.
In 2020 there’s approximately 50 million sq ft of malls in Tier 1 cities (Delhi NCR, Mumbai MMR, Pune, Bangalore, Kolkata, Chennai, Hyderabad) that are leasable. By 2022 expected additional 32 million sq ft of malls in Tier 1 cities. Significant growth expected in Tier 2 and Tier 3 cities.
According to statistics around 91% of sales driven through the brick-and-mortar shops. But with rapid growth and acceptance of online shopping (Amazon, Flipkart, Big Bazaar, Myntra, etc) shopping centers must find new ways how to attract visitors.
Commercial office space (grade A office space) remains attractive for private equity funds and private investors. Recently popularity gained mixed office spaces: shopping center and office space (such as Seawoods Grand Central Mall Navi Mumbai).
Since 2015 created 8 platforms for aggregating investors funds (creating pool of investors) and farther investments. 1/3 of total funding dedicated to warehousing and logistics. Real Estate Investment Trust (REIT) heavily investing into commercial office space, shopping centers, hotels, etc.
Visitors expect shopping malls to be modern, clean, well maintained, hi-tech, energy efficient, well planed. This new requirements create demand for new technologies to be applied. Also it generate business opportunity to tech companies. Managing foot traffic into malls is crucial (not enough or too much visitors). During weekends and public holidays shopping centers overcrowded. Malls security issues could be harmful for revenue.
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