Contrary to popular belief, shopping malls are not dying. In fact, they are growing bigger and better in India’s top cities. Here are some of the reasons why mega malls are attracting more investments and what advantages they offer to shoppers and retailers.
Increasing Demand for Organized Retail
One of the main reasons for the expansion of shopping malls is the growing demand for organised retail in India. According to a report by Knight Frank, the organised retail penetration in India is projected to increase from 9% in 2017 to 12% by 2020. This means more consumers are seeking branded products, quality services, and varied options in a comfortable and convenient setting.
Shopping malls meet this demand by offering a wide variety of products and services under one roof, from fashion and lifestyle to entertainment and dining. They also provide a safe and hygienic space for shoppers, especially in the wake of the Covid-19 pandemic.
Changing how consumers like and do things.
Another factor that is driving the growth of shopping malls is the shifting consumer preferences and behaviour. With rising disposable income and urbanisation, consumers are becoming more aspirational and experiential. They are not just looking for products, but also for experiences that enrich their lives.
Shopping malls are adapting to this trend by creating more experiential zones, such as multiplexes, gaming zones, food courts, and live events. They are also using technology to enhance customer engagement and loyalty, such as digital kiosks, interactive screens, and mobile apps.
Higher Returns for Developers and Retailers
The third reason why shopping malls are growing in size and number is the higher returns they offer to developers and retailers. According to a report by Anarock, the average rental yield for shopping malls in India is around 10-12%, which is higher than the 7-8% for residential properties. Moreover, the vacancy rate for shopping malls is lower than the office space, which indicates a strong demand and occupancy.
For retailers, shopping malls provide a platform to showcase their brands and products to a large and diverse customer base. They also benefit from the economies of scale, synergies, and cross-selling opportunities that malls offer. Furthermore, malls help retailers to reduce their operational costs, such as security, maintenance, and utilities, by sharing them with other tenants.
Shopping malls are not only surviving, but thriving in India’s top cities. They are satisfying the increasing demand for organised retail, catering to the shifting consumer preferences and behaviour, and offering higher returns for developers and retailers. They are also evolving with the times, by incorporating more experiential elements, technology, and sustainability features. Shopping malls are here to stay, and they are getting bigger and better.