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How malls are redefining India’s Tier II, III economies

By Retail4Growth Bureau | October 05, 2023

Shopping Malls have not only redefined shopping in India, but have also ushered in a new ethos in the country’s Tier II and Tier III cities, reflecting as they do people’s aspirations in these markets. In this exclusive column for Retail4Growth, Rajan VernekarMD - Rave Designwhich has been working on a number of mall projects, shares his experience of working with mall developers and explains why malls are the great equalizers today.   

We have been observing an increased demand for malls in Tier II & III cities, with a need for being designed along international trends. We have in fact worked with many mall developers quite closely and have gleaned some very interesting insights while working on these projects. 

Rajan Vernekar, MD, Rave Design

Technology, internet, and social media are great equalizers and they have brought the aspirations of people from tier II & III cities almost on par with those of Tier I cities. 

Besides, the pandemic had accelerated the movement of metropolitan dwellers to Tier II and Tier III cities. One of the main driving factors for this migration was the need to get away from the polluted and crowded environments and access affordable housing, competitive education and job opportunities. 

Having been exposed to metro culture, people from Tier II-III cities thus seek the same super brands that are accessible to people in Tier 1 cities. They also want to experiment with lots of new products and hang out in a ‘cool’, stylish place. They too wish to look cool & edgy in their fashion & cosmetics choices, experiment with global/exotic cuisine and want to be entertained in style. A shopping mall is thus an obvious destination for them. 

The first shopping mall of a city in fact transforms the city! It forever changes the way its people shop, spend their time, how they look at things and also their expectations as a consumer. A mall becomes the great social hub for meeting, greeting & spending time together, and creating nice memories for thousands of families.

Also, a successful mall in a Tier II city invariably draws people from nearby places, those who are about 2-3 hours’ drive away. They drive down, enjoy a mall visit which lasts for several hours and then return to their hometowns. It is a memorable day out for those families. 

A mall also transforms the dynamics of the city’s economy. It enhances the prospects of many small-scale businesses in the neighbourhood and generates employment on a large scale. A mall almost always means increase in prices of real estate, both residential & commercial, in the area. It thus firmly imprints its city’s name on the retail landscape of the country. 

Mall Picture

A successful developer who builds a Tier II/III city’s first few malls invariably feels a sense of ‘giving back’ to his city - a sense of pride - and enjoys the glamour reserved for the exclusive club of ‘mall owners’. 

It is no wonder that Tier II and III cities today stand poised as strategic markets for many land owners, mall developers & retailers.

A Case Study: Tapadia City Centre, Amravati

Amravati is a Tier III town in Maharashtra, and this is where a developer built the city’s first mall, Tapadia City Centre.  It went on to become an award-winning mall.  In just a year, Tapadia City Centre (TCC) has evolved into Amravati's beloved social destination, ingrained deeply within the city's culture and character. By embracing local aesthetics, fostering community engagement, enhancing the quality of life, and fulfilling social responsibilities, TCC has become more than just a retail space, it become a thriving community space. 

Tapadia City Centre has played a pivotal role in boosting the local economy by providing a dedicated space for small businesses and artisans to showcase their products for a specific duration. This not only added to the mall's unique character but also empowered local entrepreneurs who then took up permanent spaces in TCC. 

Madhur Laddha, Executive Director, Landmark Tapadia LLP

Our client Madhur Ladha, Executive Director, Landmark Tapadia LLP, shares the experience - the challenges and the achievements involved in the whole journey, especially in terms of collaborating with service/ solution providers and retail brands for the mall project: 

“The world is flat and my consultants for the Mall project were from Kolkata, Mumbai and Delhi and my vendors and contractors were from all over India, and in some cases from abroad as well. I never faced major issues while building the mall. I’d say the main challenges I faced were in terms of building confidence among my retailer partners and convincing them that the design, the brand mix and the management and maintenance of the mall would be just like in any Grade A mall in a Metro city. I am thankful to them because within a year of operations, TCC has become 99% operational and we have quite a few brands on the wait-list. One other definite challenge was getting the right staff for mall management, as most don’t want to leave the metros because of family compulsions. So I’ve had to work extremely hard in putting together a great team for managing TCC. But all that hard work has paid off. Tapadia City Centre, located in the heart of Amravati, opened on 24th June 2022 as Amravati Division's first organised community centre. In the past 1 year, it has transformed into a vibrant community space that has deeply impacted the lives of not only the city's residents but also that of the five districts in the vicinity. We have received a footfall of 3 million during the 1st year of operations and even after a year, I’m being thanked by many for bringing 70 national and international brands to this town. It gives me immense satisfaction to have contributed to the pride of Amravati and it also gives us a lot of responsibility to keep the momentum going.”

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