#infratalks #ghostmall #shoppingmall #india #malls
Introduction
Recently, a report by Knight Frank revealed that Indian shopping malls are quickly turning into ghost malls. Once prestigious, these malls are now deserted. This is surprising because India is the world's second-largest consumer market.
History of Malls in India
The journey of malls in India started with Spencer Plaza in Chennai, built between 1863-1864. Then came Crossroads in Mumbai and Ansal Plaza in Delhi in 1999. However, the real boom began after 2003, with many malls opening in big cities like Mumbai, Delhi, Kolkata, Bangalore, Chennai, Hyderabad, Pune, and smaller cities like Gurugram, Noida, and Ghaziabad. MG Road in Gurugram saw a row of malls being built one after another.
The Decline
Initially, malls were very popular and crowded. But many visitors were there for leisure and not for shopping. By 2011, malls had become places for entertainment, gaming, food joints, restaurants, bars, and multiplexes. Despite these changes, several factors led to the decline of malls, turning them into ghost malls.
Main Reasons for the Decline of Malls
The Rise of E-commerce
Online shopping greatly reduced the number of people visiting malls. With mobile apps, people could shop from home, the car, or the office, often with good discounts. This trend grew even more during the COVID-19 pandemic.
The COVID-19 Pandemic
The pandemic caused many malls to close for a long time, leading to heavy losses for local retailers. Changes in shopping behavior, with more people preferring online shopping, made things worse.
High Operational Costs
Running a shop in a mall is expensive due to high rent, electricity, maintenance, security, staff salaries, and marketing costs. These costs are two to three times higher than in local markets, forcing many retailers to move to more affordable locations.
Unplanned Construction of Malls
Many malls were built without proper planning. Some were in congested areas with limited parking and poor public transport, making it hard for customers to visit. Others were in places with low population density and purchasing power. Many malls failed because they didn't do proper market research.
Intense Competition Among Malls
In cities, multiple malls often open on the same street, creating tough competition. Newer malls with better facilities attract more people, while older malls struggle due to poor maintenance and outdated infrastructure.
Ineffective Marketing
Effective marketing is crucial for a mall's success, but many Indian malls lack good marketing strategies, leading to low visibility and fewer visitors.
High Cost of Shopping in Malls
Shopping in malls is often more expensive than online or local market shopping. Extra costs for dining, entertainment, parking, and other activities make it less attractive for budget-conscious shoppers.
Current Situation
Today, there are over 64 ghost malls in India, with their number increasing by 59% every year. Many malls have been demolished or converted into co-working spaces. For example, a ghost mall in Jhajjar, Haryana, now hosts a roadside eatery. Before COVID-19, Gurugram's Ansal Plaza was operational but now looks like a ruin.
This issue isn't just in India. In countries like the USA and Canada, ghost malls, known as dead malls, are also increasing. This global trend shows a significant shift in consumer behavior and market dynamics.
Conclusion
Understanding why malls are failing is important for future planning and retail strategies. As consumer preferences change, the retail industry must adapt to survive and thrive.
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22 авг 2024
