Malls are on the rise in India, despite the fact that online shopping is gathering pace in the country.
“There is so much talk of the death of brick-and-mortar retail as a consequence of the aggressive advent of e-commerce into the country, when the fact is that shopping malls have just got started in India - and they are definitely here to stay,” says Anuj Kejriwal, the managing director and chief executive of the retail division of Mumbai-based property consultancy Anarock.
An indication of the strength of the retail sector is that private equity players invested more than $700 million into Indian retail in the first three quarters of last year - 90 per cent of the investments that came in over the course of the previous two years, according to Anarock.
There have been some poorly planned malls that have failed in India, but Mr Kejriwal says this is not indicative of a wider trend, and that developers have learnt from those mistakes.
The fact that open spaces are vanishing in India's cities us helping to make shopping malls more attractive to Indians as they look for entertainment options, he says.
Almost 85 malls are expected to open in India over the next five years.
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“Overseas retailers are now expanding not just in metros but even tier two cities, namely Ahmedabad, Chandigarh, Lucknow and Jaipur,” says Mr Kejriwal. “This has led to mushrooming of malls all across the country. We are definitely not looking at a deathbed scenario here.”
At the same time, India's e-commerce sector is expected to expand at 30 per cent a year to reach a gross merchandise value of $200 billion by 2026, according to Morgan Stanley. There are 60 million online shoppers in India currently, but the bank forecasts that this will rise to 475 million, or more than half of the country's internet users, by 2026.
Anupam T, the vice president of Oberoi Mall in Mumbai, says that his shopping mall is seeing an increase in visitors and higher spending, including on its food and beverage outlets, and he only expects this to grow as the country becomes more affluent. Customer spend at the mall is up four-fold over the past seven years, says Mr Anupam. But he says shopping centres have to work hard to keep attracting consumers.
“We've continuously added more food and beverage, more entertainment, and better fashion brands, so that customers keep coming to us,” he says.