As per ANAROCK data, as many as 32 new malls spanning nearly 13.5 million sq. ft. area are slated to be operational in 2019 across the major cities and several tier-2 & 3 cities. Among the major metros, Bengaluru and NCR are expected to see 7 operational malls each, followed by 5 in Hyderabad, 3 in MMR and 1 in Chennai.
However, the boom in India’s smaller cities is impossible to ignore. As per industry estimates, the market size of tier-2 and -3 cities is expected to grow from the current $5.7 billion to $80 billion by 2026. These cities are definitely well-set to be the growth engines of the country’s retail future, and mall developers as well as retailers are actively looking to expand there.
In 2019, mall developers will continue to give major emphasis to F&B, multiplexes and entertainment centres in malls as shoppers’ quest for ‘experiential’ shopping will only rise. The influx of international retailers, growth of F&B coupled with increasing entertainment offerings will continue to make malls key recreational destinations.
Besides being mixed-use businesses that incorporate social entertainment options, malls will strive harder in 2019 to provide unique appeal along with more depth in shopping experience. Any new mall ventures in 2019 that are designed to succeed will focus on prime locations that are easily accessible by both public and private transport.
Tech-driven aspects such as Artificial Intelligence (AI), data analytics, geo tagging, and omni-channel shopping networks, and consumer-centric platforms such as Augmented Realty (AR) or Virtual Reality (VR) will play an even bigger role in 2019. Innovative theme-based marketing techniques, social kiosks, buy-online-pick-up-offline facilities… anything else that adds to the ease and enjoyment of the shopping experience will be winning tickets for mall owners.
In fact, the key differentiator of the malls of the future vis-à-vis those of today will be the increasing integration of such technologies and multi-channel strategies in retail developments.
… And Not A Few Challenges
E-commerce giants will continue their inexorable penetration of smaller towns and cities to leverage their current advantage. In fact, retailers will need to leverage e-commerce channels more to reach more customers in tier-2 and -3 cities and thereby save significantly on real estate.
However, physical retailers cannot afford to hand over the game to e-commerce in these cities and must simultaneously strive to offer a superior shopping experience to customers.
Both retail real estate developers and retailers will have equal roles to play in 2019, and we won’t see the year favouring either side. In fact, there will be some degree of consolidation of both retailers and mall developers. Even though the Indian retail market is growing exponentially, some retailers will have to shut shop owing to the rising rentals in malls across metros. Many such retailers will need to re-strategise their businesses in 2019 and probably look at alternatives, including e-commerce.
The key for retailers to remain successful in 2019 will be to be present in the right location, offer the right product and become unrelentingly customer-centric. Developers need to build their malls in not just the right location but also have the right mix of brands, and provide a holistic shopping and entertainment experience to ensure flow of customers in sufficient numbers.
A.K.