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    Chris LeTourneur, president & CEO, MXD, at ISCF’08

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    MALLSCAPE TO DREAMSCAPE

    Presented by :
    Chris LeTourneur
    President & CEO
    MXD Development Strategist
    s

    Mumbai, India

    March 18th, 2008.

    The Eve of India’s Retail Revolution

    Over past 5 years, India has moved from culture of Traditional Street Retail Markets to a Shopping Centre Culture.

    Over next decade India’s Urban Markets could grow by over Ten Times.

    One year ago less than 5% of Indian retail facilities were within Organized Shopping Centers.

    Rate of Shopping Center development grew by 37%in 2007.

    Expected to grow by a further 42%in 2008.

    In urban markets such as Delhi’s Gurgaon, Retail Spending Power is growing at 24%per annum.

    First Wave of Indian Shopping Center development have evolved as Enclosed Vertical Malls.

    Anchored by local Indian Brand Fashion Department Stores or Hypermarkets.

    Developing Retail in the Indian Market – ISSUES

    However, as India’s retail revolution unfolds, a number of defining issues are framing this evolution:
    • Constraints on land availability and Suitable Plots.
    • Complex Zoning and land use policies and tax structures.
    • Aging Infrastructure and services, such as roads, water & electricity.
    (FDI) regulations.

    The Indian Market – CONSUMER TRENDS

    At the same time, the following trends are fueling the third wave of retail development in India:
    • Increasingly Global, Aspirational and open-minded market seeking International Brands and Luxury.
    • Reduced savings & shift towards Personal Needs & Indulgences.
    • Respect for value while seeking “Affordable Luxuries”.
    • Market polarization between “Value” and “Luxury/Indulgence”.

    The Indian Market – CONSUMER TRENDS
    • Increase in Retail Spending by Young College Graduates, particularly on leisure.
    • Surge in 20 to 34 Year-Old age cohort (280 million) resulting in growth in “Long Term Consumerism”.
    • Acceleration of Suburbanization as affluent residents escape pollution & congestion of central cities.
    • Increasing Car Ownership expanding travel patterns in search of shopping & leisure
    • Decline in Household Size as families shift from traditional joint-family to nuclear families increasing number of households & Demand for Consumer Durables.
    • Increased Participation ofWomen inWorkforce resulting in Higher Disposable Household Income and a rise in demand for Personal Care, Health/Beauty Products, Jewelry and Fashion.

    What is Driving the Growth in Organized Retailing?
    • New-Age Young Indians are main benefactors of India’s growing economy.
    • Joint Venture Activity among brands, retailers, franchisees, investors and malls.
    • India on radar of International Retailers.
    • Many are in planning stages for Roll-Out in India’s primary markets.
    • Many Indian Retailers are Developing Store Networks that could potentially be bought by Internationals for “Turn-Key Entry”.
    • Occupancy Costs (rents) are seen to be high by Local Indian Retailers.
    • Generic Supply of New Malls in size, format, positioning, amenities and merchandise mix.
    • Attempts to Create Specialty Malls.
    • Shake-Out is Anticipated.

    Brand Awareness & “Affordable Luxury” Trends
    • Consumers are blending Indian Brands and Global Brands to create a distinctively unique, “Indian Lifestyle Experience”.
    Value-orientation remains strong, even with luxury consumers.
    Wealth is enjoyed rather than displayed – holdover from traditional Indian values supporting the “simple life”.
    India’s emerging “Shopping Class” are fickle – quick to change brands/shopping centres in their pursuit of the “latest and greatest”.
    11% of Indian consumers claim to buy – 38% would if they could afford it.
    Bang & Olufsen already active in Delhi, Mumbai & Chennai and opening more stores.
    Porsche, BMW, Audi, Bentley, Rolls Royce, Ferrari, Lamborghini & Maserati are all now in India.

    Brand Awareness & Growth Trends

    The more exclusive, renowned or aspirational the brand, the more Indian consumers will seek to acquire it.

    The fastest growing import brand categories:
    • Luxury Watches 40%/yr.
    • Branded Jewelry 40%/yr.
    • Imported Cars 35%/yr.
    • Branded Wine 30%/yr.
    • International Travel 35%.yr.
    • Electronic Gadgets 15%/yr.

    THE DREAMSCAPE: NEXT GENERATION RETAIL DEVELOPMENTS in ASIA, EUROPE, USA &MIDDLE EAST

    Asia: Solana, Beijing
    • Unenclosed Shopping Streets anchored by Entertainment, Dining & Hybrid of Traditional Shops with international Brands.
    • China’s First street-oriented “Lifestyle Centre”.
    • 600,000 sf of Retail Functions, Boutique Hotel & Wedding Centre.

    Asia: La Cittadella, Japan
    • Concentrated Open Space Plaza as a focal point for Entertainment, Events & Community Gathering.
    • 200,000 sf of Retail Functions, inMulti-Layered Compact Site.

    Asia: Namba Parks, Osaka Japan
    • Urban Oasis of Rooftop Open Spaces & Plazas (2.2 acres) serve as the attraction to this Mixed-Use Project. • Over 600,000 sf of Retail Functions, together with 30 Floor Office Tower and 344 unit Residential Tower, next to Mass Rail Transit Station.

    Asia: Langham Place, Hong Kong
    • Urban Vertical Village in the heart of Mongkok District with Mixed- Use Hotel component.
    • 586,000 sf indoor urban shopping centre blurs levels by creating perception of Ground Level at Fourth Level Atrium

    Atrium “Indoor/Outdoor Room” is activated by:
    • Theatrical Lighting
    • “Super-Escalator”