newsonretail.com - Regional Brands Continue to Grow in Retail Malls

Regional Brands Continue to Grow in Retail Malls

Wednesday, 20 June 2007

Local brands that have been causing headache to large-scale brands in value segment, predominantly in small Indian towns, are now expanding in retail malls.

Local brands that occupied around 10% of stores in Indian retail malls are now considerably increasing their presence in this market, and represent around 33 % of total stores in retail malls today (in 2006), reports agencyfaqs.

Some Mumbai & Chennai malls are allowing local brands to hold about 25 % of the total stores & the figure is 30 % in Delhi & NCR (National Capital Region). The figure is relatively higher in tier-2 cities.

Various malls in Indian cities like Pune, Jaipur, Chandigarh & Nagpur are accommodating regional brands to make for more than 35 % of total space in stores. Experts suggest the current trend is more prevalent in India's capital city "Delhi", due to 'demolition drive' taking place in the city for the past three quarters, which is sealing commercial shops running in residential areas.

Mall owners are rating this change as an innovation to provide comfortable shopping for customers that they don't find in local bazaars, thus, providing equal opportunities to local, national & international brands. Also, majority of Indian women buy traditional outfits, which has contributed towards the growth of local & national brands in retail malls.

Mall owners are opening up to more local brands and have revealed that majority of their profits are coming from small tenants & wide merchandise. These brands have made some great customer base in specific fields.

"As long as there's money to be made, mall owners will sell anything to make profits, " said an analyst at RNCOS.

Moreover, North Indian malls are providing space for offices, as demand grows slower than supply of retail space. Malls are not getting buyers or are being occupied by unfitting businesses, as per Knight Frank, a real-estate consultant.

"Shopping malls are becoming increasingly common in large cities, and announced development plans project at least 150 new shopping malls by 2008," as per the report "Indian Organized Retail Industry (2005-2007)" published by RNCOS.

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