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New Malls Change Indians' Way of Shopping - 2004-01-17

India's economy is booming, and the boom has Indians looking for new ways to spend their money. To accommodate them, hundreds of Western-style shopping malls are being built across the country.

Measuring 400,000 square feet, featuring air-conditioning, underground parking, a multiplex movie theater and a food court, the Metropolitan Mall is considered one of India's trendiest shopping locales. On weekdays, up to 25,000 people come to Gurgaon, a suburb of India's capital, New Delhi, to shop at the Metropolitan. On weekends, that figure doubles.

Metropolitan manager Baljeet Singh says the pace of life in India's cities has sped up in recent years, and consumers want a shopping experience that takes their faster lifestyle into account.

"People don't have the time and energy to be going around from a shopping area to a shopping area to a shopping area," he said. "They want it done all under one roof, and they want to do it fast."

India's economy has boomed with the emergence of new industries. Millions of new jobs are being created, and growth is expected to reach seven percent for the year ending in March. Expanding numbers of middle-class wage earners have more disposable income to spend on consumer goods.

Despite the numbers, there is just a handful of finished malls in the Delhi area, all built in the late 1990s. Harminder Sahni, a management consultant for KSA Technopak in New Delhi, says that, for a long time, investors were afraid of the risk.

"Most of the people putting money in the malls have been shopping in the malls, I'm sure, internationally, but they never, putting your head first into it, was the big key," he explained.

Now, Mr. Sahni estimates that there are 450 malls in various stages of development across India, 60 in the greater Delhi area alone.

While the malls tempt customers with international franchises like Nike, Reebok, Pizza Hut and McDonald's, they also represent new opportunities for local retailers.

The Qutab Crescent mall in Delhi is one of many under construction. At just 40,000 square feet, it is on the small side, but at five stories, it towers over the city's bazaars, which, until recently, have been the only places to shop.

Neeraj Vadhera, executive director of the Hans Group, is the Qutab Crescent's promoter. He is also a retailer, who plans to sell Italian lighting and tableware in a shop in the mall.

He doubts the malls will put the bazaars out of business. He says bazaar merchants usually keep their traditional shops open, and sell a different or more modern version of their line when they set up in the malls.

"So he'll still have his roots pretty much in the bazaar, and then he'll be selling the same merchandise probably, packaged in a more Western way," he said.

Some analysts warn that too many malls are being built, creating a bubble that is likely to burst. But many will survive, providing new opportunities for investors and retailers, and slowly changing the way Indians go shopping.