The Hindu Business Line : Specialty malls, the new retail buzzword

Kolkata April 8 Specialty malls seem to be the buzzword in the Indian retail mart. While the current focus for real estate developers seem to be these destination malls, retailers are also queuing up to book their space in them.

Currently, the number of specialty malls in the country is only a handful, but the Retailers Association of India (RAI) expects that over the next three years, specialty malls will constitute nearly 10 per cent of the total malls in India.

Among the most prominent specialty malls in the country is the Gold Souk Mall, a jewellery specialty mall developed by the Aerens Gold Souk Group. The mall houses jewellers providing both consumers and retailers an ambience of security and convenience. Likewise, the Bangalore-based real estate developers, Prestige Group, has revamped its Eva Mall into a super-specialty ethnic Indian womenwear mall.

In Kolkata, a medical mall — Alpha Family Health Mall — has been launched by Alpha Medical Services while another city-based developer, the Merlin Group, has set up Home Land, the country's first dedicated home mall. Several other specialty malls on auto-parts, furniture, home appliances are being planned across the country.

Says Mr Susil Dungarwal, a Mumbai-based real estate and retail analyst, "Traditionally, in India, people prefer a specialty store. Moreover, lack of large space has prompted developers to create niche markets for different segment of customers."

According to Mr Ankur Srivastava, Managing Director, Debenham Tie Leung DTZ, a global property consultancy firm, "In certain parts of the country, this trend (for specialty malls) is emerging. Worldwide these kind of niche models have worked and in India certain models could be successful."

Conversion rate

Industry estimates indicate that although the footfalls in specialty malls are considerably lower than in generic malls, the conversion rate in these malls is high compared to the general malls. "Conversion rate in a specialty mall is nearly 65 per cent while it is only 18-20 per cent in a general mall. The reason is that generic malls attract anybody and everybody but the specialty malls offer a focused merchandise to the consumers," Mr Dungarwal said.

However, not all specialty malls have a success story. "Most developers are using it as a marketing gimmick and in certain cases the concept is not well-thought-out," said an industry expert.

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