Thursday, October 6, 2011

The Phantom-Mall City

- Ruchi Junnarkar

On 30th July this year, Ahmedabad witnessed the shutting down of its first mall and multiplex – Fun Republic. Inaugurated in June 2001, FR, as it came to be known popularly, was the trendsetter as far as malls and multiplexes in the city go. Everyone, especially teenagers, flocked to this new attraction which offered everything – movies, food, shopping – in one place. There was even a bowling alley and a gaming zone. It was the place to be in the early years of the last decade. By the time it shut down, it was run-down, deserted and frequented only by trouble-makers and vandals, who would be looking for a deserted place to carry out their various schemes.

The same fate has befallen almost all the multiplexes and malls that had begun sprouting up in every corner of the city in the wake of the success of Fun Republic. At one point, Ahmedabad found itself in the midst of mall-mania, as realtors and retailers went overboard in trying to cash in on this perceived retail boom. Old housing societies were sold to large builders who would convert the property into a mall regardless of the logistics. As long as the property had at least one of its sides on a main road, it became a mall. Post-2005, one could end up at one shiny new mall or the other every five minutes on the road in the newer, western part of the city. Metros, tier II and III cities all over the country were experiencing a retail boom. Mall culture was catching on all over the country. So why should Ahmedabad, the showcase of “Vibrant Gujarat” not be the same? Overnight Ahmedabad seemed to have turned into “Mall City”, and began to be marketed as the same. The Aditya Birla group, Reliance, India Bulls, every big retail chain wanted to get an advantage over the other in this “growing” market.

And yet, in their hurry to convert every large piece of land into a consolidated retail complex, no one paused to consider whether there actually existed a market for such a large retail base in the first place. As it turns out, it didn’t. Aditya Birla’s More, Subhiksha, Spencers, India Bulls, Pyramid – several retail chains came, failed, packed up and left in the course of 3-5 years. Those that haven’t left completely have had to shut down a number of stores in order to maintain profitability. This includes the Reliance Fresh chain, Big Bazaar and several other smaller players. Yes, the retail scene in the entire country hasn’t exactly been rosy lately. About 2500 retail stores closed down around the country between 2009 and 2010. But with a vacancy level of 30 percent as of 2010, Ahmedabad had the highest level of vacancy in the country.

So what went wrong? It’s not as if the people of Ahmedabad don’t have the spending power. Gujarat had been on an overall upswing in terms of prosperity over the past several years, so there’s no reason why people should stop buying. While business experts have attributed this phenomenon to a number of reasons ranging from faulty patterns of leasing to decreasing profitability margins, I think it goes beyond just the economic aspect. The thing about Amdavadis, as they call themselves, is that they just don’t believe in splurging on fancy things. The consumerist culture that is fast enveloping the rest of the country hasn’t completely caught on in Ahmedabad yet. And when they do want fancy things, they’d rather go to America, or Honkong-Singapore and splurge there. Ahmedabad still isn’t as brand conscious when it come to clothes, shoes etc as say, Bangalore or Mumbai are. And certainly not as much as Delhi. Even when it comes to eating out, most Amdavadis prefer to get chat at Law Garden or Punjabi at Havmor. “Fine dining” is still a very nascent concept.

When malls opened up, Amdavadis went to these malls in large numbers. They walked around the entire mall, checked out all the stores, maybe sat in the food court for a while, and then left. Without buying anything. So footfall, initially, was great. The rate of conversion from footfall to actual buying, not so much. As the novelty wore off, footfalls lessened, leaving what were once shiny malls to be large, bare structures with stores running losses and the air conditioning turned off.

Of course, there is a relatively small proportion of the Amdavadi population that does shop at these stores. However, this small profitable population got spread very thinly over the numerous malls that opened up. A market exists. Just not enough to sustain 30 gigantic shopping complexes. This can be clearly observed from the fact that the footfall to sales ratios have gone up even as the total footfalls have reduced. Only people interested in buying go to the malls now.

With the mall scene not quite working out, businessmen are now stuck with large empty structures on large pieces of land without any idea of what to do with them. There is talk of turning some into 5-star hotels, some into office complexes. But in the meantime, Amdavadis are stuck staring at large, hauntingly deserted building with shutters pulled down and electricity off as they gorge on pani puris at the laari across the street.

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