Statistics in India states that the performance of malls in the top cities is declining with every passing moon. The largest percentage of malls in India is uncertain if they would go on operating or they will close down because their performance is mediocre.
One may not be able to determine the performance of the Indian malls by simply observing the day to day activities of the mall since the malls are ever busy. People prefer shopping in malls which offer commodities at lower prices.
The distinction between successful and unproductive malls is getting wider and wider. It is approximated that there are 260 malls in India. However, there are roughly 70 malls that we can say are successful. The success of a mall is based on the profits obtained by the tenants, vacancy level, and appreciation of the rental values. The successful malls are those with a vacancy of less than 12 %, a detectable growth in rental value, and offers popular brands that attract shoppers.
The downfall of malls in India is attributed to various factors. Some of the key factors are as discussed below.
- Poor construction and designs
Some malls have poor designs and the construction is wanting. Investors who were putting up malls at a high rate have reduced the size for building malls due to high levels of vacancy. Largely a design mistake & you cannot do much with this.
- Lack of experienced developers
Most of the developers putting up malls have no experience or visibility in the trade. They did not embrace the upcoming atmosphere. Most of the people who invest heavily in malls do not take their time to identify on the areas they can monetize. The upcoming malls are also ignorant and may not be offering the new brands and products in the market and they end up performing poorly. People like purchasing trendy products; so if the products are not there they will go to other outlets that offer those products.
- Poor quality goods
Some of the malls go for quantity and not quality when purchasing the products. These malls end up failing badly because they lacked investigation on catchment and choice of wrong partners. Its time to build experience & do it the right way.
- Lack of Active Management
This is a major cause for the downfall of malls in India. A successful mall must have qualified personnel to manage its activities.
A mall requires managers to plan
- The correct tenant mix
- Continuous Study of Shopper’s Manners
- Zone Analytics & Space optimization
The management has to get the feedback from the customers in the mall frequently so as to know the areas that need improvement. This is absent in the failing malls in India.
For the malls to succeed, these factors have to be taken care of since they are the backbone to the success of a mall.
Yogesh Huja, Founder
Freedom Smart Labs Ltd