Interview with Sushil Mohta, Chairman & MD, Merlin Group of Companies

Interview with Sushil Mohta, Chairman & MD, Merlin Group of Companies
16/08/2017 , by , in Interview Old

India is the 5th largest preferred retail destination globally. Sushil Mohta Chairman & Managing Director, Merlin Group of Companies briefs on the new and innovative ideas of retailing the real-estate sector has adopted.

Following an analysis of the Indian Retail Industry, India is among the highest in the world in terms of per capita retail store availability. The retail industry in India has witnessed commendable growth over the past 9 or 10 years. As a result, the traditional and unorganized family-run retail shops are facing stiff competition from the Indian and International retail chains.Retail industry in India is expected to grow to US$ 1.3 trillion by 2020, registering a Compound Annual Growth Rate (CAGR) of 16.7 per cent over 2015-20. According to A. T. Kearney, international Management Consultant, “India is the second most attractive retail designation globally, among thirty emergent markets.”

With the new and amended FDI policy of India, it is now easier for foreign brands to set up their stores and kick-start operations in India. This has heightened the demand for retail space. Few of the new foreign entrants in India are H&M, IKEA, Wal-Mart, Carrefour, Bally and many more.

Newer formats of retail space being experimented with

We are now seeing the creative utilization of unused mall spaces and even parking space to incorporate newer retail categories to attract consumers and drive additional revenue. Microbrewery, Fun Dining, Virtual Reality, Kids Educational centers are some of the newer formats. In addition to F&B, entertainment and retail, service industry is getting more and more presence.  For e.g. tattoo, nail art studios, salons, spas, dry cleaning services, mobile recharging booths, Ola and Uber booths etc.

  • Introducing novel categories and brands in spaces that were not utilized properly earlier, thereby generating footfalls in those micro-areas
  • Utilizing parking space and other ancillary spaces for advertisements, publicity and promotional events
    Enhancing advertising opportunities and thereby driving additional income through floor graphics, standees, plasma screens and similar media
  • Casual Leasing: Leasing of kiosks, vacant space or carts to children’s play area, tattoo stations, foot spas, etc.

Developers focus on retail projects as part of their portfolio

Developers are increasing their focus on mixed-use office-cum-retail realty formats. The combination of retail and office complexes is fast catching on.

With introduction of REIT, the larger real estate companies are now looking into real estate assets with an eye to transfer them to REIT in future whereby they can keep a control of assets as well as liquidate their investment to a large extent.  Because of lower interest rate, rent securitization has become easy making funds available against rental income.

Shopping Malls have become an important ingredient for large scale development.  In a large size development, the actual cash flow required for development of a mall becomes available out of the sales proceeds of residential part on one hand and the Shopping Mall becomes an attraction for people to buy homes on the other hand.

The changing trends in consumer behaviour

The number of consumers making purchases online has dramatically increased in last few years making internet marketing to be the most suitable marketing strategy.Buying behaviour of consumers in India is greatly influenced by celebrities, their activities and movements. People in India are becoming more and more responsible towards the environment and this increase in environmental awareness has a great impact on their purchase decision. Products are being bought and sold based upon their eco-friendliness these days. Omni channel is a new way to reach target consumers because of change in consumer behaviour.

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