Mumbai - The Centre One shopping mall on the outskirts of Mumbai is bereft of customers, even during India’s annual festive and wedding season, when retailers traditionally cash in.
“Business is dull, usually weak,” said one bored-looking fashion salesman. The mall’s empty look is no exception. In the past decade, supermarkets and malls have spread across India’s cities and towns, fuelled by fast economic growth and excitement about middle-class buying power.
A Malls in India report by Images Research last month found 470 shopping centres were operational this year, up from 50 in 2005, and were expected to soar to 720 by 2016.
“But over 90 percent of India’s malls are struggling,” said Susil Dungarwal, the founder of Beyond Squarefeet, a mall management and advisory firm in Mumbai. “Just 15 of these can be counted as running successfully.”
But Dungarwal and other analysts say the majority of India’s shopping centres are struggling under a potent mix of high property prices, bad planning and sluggish demand as the economy slows.
In the past year alone, Milan Mall and the City Mall in Mumbai have shut down, while others such as Evershine and Mega Mall are struggling to stay afloat, analysts say.
India’s slowing economy, with growth at a decade low of 5 percent in the year to March, has put a firm dampener on spending. But other factors are compounding the troubles at the tills. Over the past decade, builders and developers have rushed to build without paying sufficient attention to what a mall requires to survive.
Until recently, most ignored the so-called “catchment” area from which a mall attracts visitors, experts say. In Gurgaon in Haryana state is “Mall-Mile” – a stretch of nearly a dozen malls, built almost one after another.
The oversupply of malls means many have empty space: about a fifth of Centre One lies bare and so does up to 75 percent of the Dreams Mall in Bhandup, Mumbai.
Nearby, Sobo Central is unable to draw the crowds as it does not offer a food court nor a multiplex. “People do not go to a shopping mall to shop. They go there for the experience, to hang around,” Dungarwal said.
Retailers also face growing competition from online retailers such as Flipkart.
“Malls will have to do everything to drive footfalls. They will have to make sure there is enough excitement to attract people,” said Devangshu Dutta, the chief executive of retail consultancy Third Eyesight. – Sapa-AFP