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Last Updated: Tuesday, 4 October 2005, 05:42 GMT 06:42 UK
India readies for shopping mall boom

By Zubair Ahmed
BBC News, Mumbai

Shopping mall in Mumbai
India's middle classes love the malls

It is a make-believe world.

Once you are inside, you forget about the city's potholed roads, utterly rowdy traffic and in-your-face poverty.

Instead, Inorbit, the biggest shopping mall in India's commercial city Mumbai (Bombay), is buzzing with customers.

It is a rich man's world too, with multi-screen cinemas, restaurants, games and branded shops - well out of the reach of many of the country's one billion people.

But India's middle-classes, widely travelled and with deep pockets, are flocking to malls. "I prefer shopping in malls because I get nearly everything I need under one roof," says Sheela.

Naina agrees. "It's fun to shop here. It's different. It offers more variety than the High Street."

Rapid growth

India's organised retail industry accounts for just 3% of the country's total retail sales, though it is poised to grow by 97% per year in the next five years to a staggering $24bn.

We Indians are not so shop savvy
Arun Nanda, Mahindra and Mahindra

Fuelling this growth are India's sprawling shopping malls, which are increasingly challenging High Street stores, corner shops and village markets alike.

Just five years ago, there were shopping arcades but no malls.

Today there are nearly 100 big shopping malls in the country, more than half of them in Delhi and Mumbai alone.

And in two years there will be 360 malls across the country. More than 20 are in various stages of development in Delhi and Mumbai.

Foreign investors

Among them is India's biggest shopping mall, Ambi, which is being built in Gurgaon, near Delhi.

Shopping mall in Mumbai
Critics say the malls attract window-shoppers in need of a place to hang out

Spread over 3.2 million square feet, it is set to become a virtual town, where multi-screen cinemas, recreational facilities for adults and children, food courts and branded outlets will fill the space

It will have exclusive showrooms of international brands, where, according to the developers, customers will have to shop by prior appointment.

"It'll be like an integrated township, where you'll get everything," says Har Baksh of the developers Ambience.

And it has only just begun.

Developers and promoters of malls believe the face of the industry is about to dramatically change.

Today they watch what we have on display and we hope tomorrow they come back and buy
Nana, bakery owner at Inorbit mall

As soon as the government allows foreign investors to get in on the act, that is. And that could happen any day now.

Commerce ministry official A.K. Dua believes such investment would ultimately benefit the consumer.

"Foreign direct investment will not only expand the market but will also bring in competition and business is likely to get more innovative," he says.

Tomorrow's customers

Moreover, the hope is that the new malls can convince India's seriously wealthy elite to take their custom to local operators, rather than going shopping in Singapore or Dubai. <

"We Indians are not so shop savvy," says Arun Nanda of Mahindra and Mahindra, which makes tractors and vehicles.

"To grow retail we have to promote India as a shopping destination for international shoppers and to do that we need to give Indian retail an Indian face: The malls, the markets, the offerings."

But critics say the malls seem better suited to window shoppers in need of a place to hang out.

Inorbit's chief executive Yogesh Samat, disagrees: "It is not correct to say people who visit our malls don't shop," he says.

"We get more than 50,000 people a day and many of them spend money on buying what they need."

Besides, says Nana, who runs a bakery in Inorbit, Window shopping may not be such a bad idea: "Today they watch what we have on display and we hope tomorrow they come back and buy."

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