Luxury brands now get more room for growth in malls
India is replicating the mixed-use model from South East Asian countries as the luxury market is still small
Jun 01, 2013
Source : The Economic Times


BANGALORE: Mall developers in India are setting aside up to 40% space for luxury brands, hoping to tap new money by offering labels such as Jimmy Choo, Canali and Gucci alongside mass-market products.


Developers including Xander Group-promoted Virtuous Retail, L&T Realty, Panchshil Realty, Ansal API and KKA Buildtech are setting up boutique luxury retail spaces or dedicating 20% to 40% of mall space in cities such as Surat, Chandigarh, Ludhiana, Amritsar and Pune to luxury brands.


This mixed-use model has proved a success with shoppers in South East Asian countries like Thailand, Malaysia and Hong Kong. Mall developers in India now hope to pull off the same trick. "India is replicating the mixed-use model from South East Asian countries as the luxury market is still small," said Bappaditya Basu, senior vice-president at retail advisory Jones Lang Lasalle India.


"Only Mumbai, Bangalore, Delhi and Pune understand luxury. There are no other cities that can absorb a pure luxury mall in absence of critical mass for retailers to survive." According to the real estate advisor, Dubai, Thailand, Malaysia , Hong Kong and South Korea have malls with part of its overall development dedicated to luxury. "Big mall development cannot be sustained on pure luxury ," Basu added. In some cities, the mall developers' gamble has already brought smiles.


"I would travel light and stock up on formal wear as it was not available in India. But now I can get access to varied collection of Brooks Brothers from Chandigarh stores," said 27-year-old entrepreneur Arjun Mittal, who until now was picking up luxury brands from the US and Europe during his business trips. Mittal belongs to a growing class of moneyed shoppers that is driving a change in India's retail mix in tier 2 cities and towns, away from the pure luxury malls of Delhi, Mumbai and Bangalore.


"Mixeduse malls ensure footfalls across segments, allowing aspirational customers to experience luxury and convert them into future customers of luxury and premium offering ," said Sangeeta Vernekar, director-retail excellence at Phoenix Group. The Palladium mall in Mumbai , the first mixed-use mall development in the country, houses luxury brands like Gucci, Jimmy Choo and Canali among others.


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