Home Retail India has always been pro-luxury!

    India has always been pro-luxury!


    , who was earlier looking after , has recently been appointed as the Vice President and Mall Head of too. She talks about the future of luxury retail in India and her strategy to run two of the most popular malls in the country… in an interview with Shopping Centre News.

    The DLF Emporio mall in Delhi has become synonymous with high-end shopping in India. The property houses a number of global luxury brands and is perfectly complemented by the shopping-cum-entertainment mall, DLF Promenade, located right next to it.

    SCN: How do you see the future of luxury retail in India?

    D Madhukar:
    Luxury retail in India has been growing by leaps and bounds. Contrary to popular belief, the country has always been pro-luxury. It has a lot of money and, again, it is one of those countries which have a high number of high net worth individuals (HNIs). Right now we rank 15th in the world for the sheer percentage of HNIs! More and more Indians now want to experience luxury and once they have experienced its quality, there is no going back for them. Indians are very tradition-bound. No occasion in the country is a small-ticket item. Everything happens on a very large scale, be it weddings or festivals such as Diwali and Holi.
    If we talk about individual brands and how they are performing, every brand in DLF Emporio has registered a two-digit growth. In fact, some of them at the mall even had a growth of as high as 70 percent y-o-y!

    What do you think ensures the success of a luxury mall?

    As far as the luxury malls are concerned, their success depends upon the amalgamation of everything, including brands, services, location, management and infrastructure. It is very critical to decide what all brands should be present in the property. Location is also extremely important. If a property is housing luxury brands, it needs to have the right ambience percolating throughout its infrastructure and also provide unmatched service to customers.

    The reason for the success of DLF Emporio are many. We were very clear about the kind of brands we wanted to bring to the mall, even if it required us to partner with them, which we did initially.

    Apart from this, the mall’s infrastructure is top-notch, better than any five-star hotel in India. Even our services are unmatched, such as hands-free shopping which is inspired by the bell-boy services in hotels. Under this concept, the shoppers do not have to carry their bags while shopping. There is also the concierge services, the pick-and-drop services and arranging for a private stylist for the customers. DLF Emporio provides all the possible services that our customers can associate with luxury shopping.

    Since Emporio began operations in 2008, very few luxury malls have become functional in India. What can be the reason behind this slow growth?

    As far as I think, DLF Emporio is the only true luxury mall in India. The reason is that it was planned from the ground-up to be a luxury mall. The other properties, including the one in Mumbai, were not planned as luxury malls. They were planned as ordinary malls, and converting them to luxury was an after-thought. In Mumbai, there is paucity of space for brands to come through, and so the mall in Mumbai got approached by luxury brands for stores, and they realised the potential in the concept. So the other “luxury” malls are a mixed bag and not pure luxury.

    Unfortunately, when DLF Emporio opened, the world was going through recession. From the DLF perspective, we have always planned to expand, but we slowed down on our expansion plans because of the global recession. We put all our onward projections on the back-burner.
    If we talk about the slow growth of the luxury properties from the perspective of other brands, they also needed to have a certain comfort level. Everyone was waiting and watching to see what happens with the first such mall (DLF Emporio). Was it going to be a success? Now that we have proven to be a success, there is a bandwagon of people wanting to get on the luxury train.

    Brands however are still a little apprehensive because the other developers getting into the luxury mall business are unsure whether they will be able to work up to the required level and deliver what is expected of them. Many brands are waiting for DLF to come through because we have already been there, proved to be a success and are now moving forward. They would rather invest in a second store with DLF than going with someone else.

    What should be the survival strategy of a luxury mall in India, considering the recent slump in the economy?

    Any luxury brand coming to India knows it is not a short term game. They are currently entering the country from the brand investment perspective and are not expecting immediate returns. At present, DLF Emporio is in a very comfortable position as we are 100 percent leased. All our tenants have re-affirmed their faith in the property and all the brands have signed on for the second set of lease periods.

    With the opening up of 100 percent FDI in single-brand retail, more international brands are going to come to India. To bring them to our property, we are actually trying to convince other brands in Emporio, which are occupying large areas, to return some space to us.

    Do you have plans to come up with more luxury malls in India?

    DLF has two additional luxury projects that are being worked upon. They will get operational in 2013 and 2014, respectively. One of them is going to be about 20 percent larger than DLF Emporio, while the other will be niche and have very few luxury brands. It will be about half the size of the Emporio. One of these will come up in Delhi while the other one will be situated in Gurgaon.

    How has DLF Emporio been zoned?

    We make sure we stick to the integrity of mall zoning. There were some brands which were willing to offer us higher price points to enter the property. But we were very clear that if their concept was not fitting into what is true luxury and was not at the same level that it needed to be, then it couldn’t be a part of Emporio.

    Inside the property, we have international key brands on the ground floor. The second range of brands is on the first floor, while all the couture Indian brands are on the third floor. India has a very strong culture of designers who are a strong brand name by themselves because of the strong ethnic market present in the country. So we have a special ethnic wear collection on the fourth floor.

    As stated earlier, we went into partnership with some international brands initially as we wanted them to come into our property. Thus was formed DLF Brands through which we brought in names like , , and Ferragamo. However, we have now been consciously moving away from this model as it is not our core competency.

    What is the retail mix of DLF Emporio? How has it been kept different from DLF Promenade?

    In both the malls, we have identified our categories percentage -wise and have tried to be honest to that. All the categories have been well represented wherein we don’t over-do any category or under-do it. The main categories remain the same in both, such as fashion, lifestyle, jewellery, footwear, F&B, and so on.

    DLF Emporio, although being a luxury brand for fashion and lifestyle, has a unique range of F&B stores. We have around five such stores, including a multi-cuisine restaurant Set’z by DLF Restaurants, apart from Auma, Cafe E, Cha Shi and ‘On The Go.’ We have 24 expat chefs in Set’z alone for authentic cooking! Cafe E is located in the atrium, and this place leads to impulsive buying by visitors. Soon we will be launching another F&B outlet called Qawali Cafe.

    In Promenade, there is a whole range of restaurants, and we are soon going to also open Mamagoto and Mad Over Donuts. Nando’s is going to open its first outlet in Delhi with us.

    DLF Promenade recently won the “IMAGES Most Admired Shopping Centre of the Year: Marketing & Consumer Promotions” award. How are you planning to take the legacy forward?

    DLF Promenade has always been doing unique marketing and promotional events. They have also launched their mall magazine which comes out every quarter. Promenade indulges in interesting tie-ups and gifting opportunities. It gets the tenants to partner in anything that they do.

    The events organised in a mall cannot work by themselves – they work only when the brands are with you. Now, we are trying to activate additional areas in the property and trying to use the area between the Promenade and Emporio as a cultural hub. We are going to create a calender of events around it. We are also planning to organise events for kids in the Kiddyland zone. We are also coming up with the concept of “child-safe shopping.”

    Is there any difference in the management and marketing strategy for a luxury mall like DLF Emporio and a shopping- cum-entertainment property like DLF Promenade?

    The strategy of managing both the malls has to be different, particularly in terms of the way we portray the brands. While Promenade works on the quantity of the footfall, Emporio works on the quality. How much is spent and what is the conversion rate is what is important for Emporio. This property is a brand in itself, but we also focus on a few key brands. The reason behind this is we want DLF Emporio to be larger than the brands it carries. It is just like the hospitality industry. Do you publicise your restaurant or do you publicise your chef? If your chef leaves, what happens to your restaurant?

    The events organised at the two malls are different. At Emporio, it is more about brand consciousness with a very subtle message of luxury. There, we do larger-than-life events which are more philanthropic in nature. Promenade, on the other hand, is more about interactive activities where we try to pull in the entire family, focussed towards fashion and fun and linked to shopping.

    It is surprising to note that customers are common across the two malls! The same people who are shopping in Emporio are also the ones watching movies in Promenade. They go across for salons, cosmetics, food courts and other services which are not present in Emporio. Emporio has very consciously built its portfolio and even its F&B outlets are very different from the Promenade or other malls.

    How does DLF Emporio and Promenade add to the footfall of each other?

    The beauty of Emporio has been enhanced with the Promenade placed next to it. Promenade too has premium brands but in a separate atmosphere that draws inspiration from Emporio. The entire complex has been planned in a way that shoppers get the same feel in both the malls but get to choose different brands.

    Delhi has a clientele which likes mixing and matching. You can find someone wearing a Zara outfit with Jimmy Choo shoes and carrying a Louis Vuitton bag. At Emporio, we have given them that proximate-yet-very-distinct differentiation. Serious shoppers come to Emporio Monday to Thursday while cross-over customers walk in from Friday to Sunday. On weekends, the secondary entry between the Hub and the Emporio is busier. On weekdays, the main entries are the focal point. However, the customers are super-imposed and in India, the line is blurring between luxury and premium customers. However, the Emporio customers are sure of what they want and walk out with it. The Promenade customers on the other hand are there because they want to spend the day around.

    How is the design of the two malls different?

    Externally, the design of the two malls is very congenial and symmetrical and flows in harmony with each other. You can find consistency in the kind of material used and flooring for both. Internally, there is a differentiation in terms of the width of the corridors, the size and furnishing of the washrooms, and so on. Emporio is more like a five-star hotel  while Promenade is very upmarket, chic and contemporary. The same designer has worked on the two malls which give the appearance of being situated in the same complex. And this is the reason why my role has been expanded to take charge of both the properties because they have to be treated as one.

    The Vasant Kunj stretch in Delhi seems to be the most hyped mall cluster zone in India. What decides the success of a mall in such a cluster?

    A number of malls situated on the same street can actually work beautifully. The reason why the Vasant Kunj stretch is working very well is because we have all parts of the spectrum present here, right from to Louis Vuitton. We are able to offer the entire range of brands at the complex with adequate parking space. We encourage customers to walk through the three malls – Emporio, Promenade and Ambience – and there is a clear connectivity between them. Such kind of synergy benefits every property and leads to the making of a destination. We have regular interaction and cooperation with each other on issues such as traffic regulations, security checks, rain-water issues, road construction and repair, and so on.

    The success of any mall, whether in cluster or not, is decided by how comfortable a customer feels in terms of security, tenant mix, parking space and location. At Vasant Kunj, customers get all these on a single street.

    What strategies have to be adopted by the malls to retain the retailers?

    It all depends upon the kind of relationship that exists between the developer and the retailer. Price is a secondary factor. If retailers feel that the developer has been their partner in everything – not only physically or financially but also by working with them in dedicating events and explaining to them particular strategies if they are going through a low phase – they are not going to budge away from you at any cost.

    Another very important thing is that the revenue model should also be devised as a win-win formula for both. Till the time a tenant is not doing well, there has to be some small minimum guarantee (MG) in place as the interest of the mall has to be protected as well. But as a tenant starts growing in terms of sales, the property can also benefit from the success of the brands through revenue share.

    The win-win situation can exist for both the parties only when there is MG plus revenue share because with this, the mall basics are taken care of. Revenue sharing makes sense since the developers would already have invested so much of money in building up the property and organising marketing events to bring in the right footfall, that they too should benefit from the offshoot of the sales. However, it is also essential to have MG because when there is revenue share alone, it only benefits the tenants. If they are not doing well, the mall doesn’t get anything.

    How does your team at the mall help you overcome the challenges faced in running the show in two of the most popular malls of Delhi?

    The main challenge that I am facing is putting on a different hat each time because there needs to be a variation in my thinking. Our malls could not have had their existing reputation unless all the teams – whether it is marketing, leasing, security, management or operations – worked to their top level.

    There is a lot of synergy across the DLF retail sector in the form of a monthly review of all the DLF malls together where a lot of give-and-take of ideas occurs.  We have regular training programmes for the staff and bring the right kind of faculty on board to train our people. We also identify the international-level training programmes that are happening.

    The investment on training and security by our organisation is unparalleled. However, we recruit our people on the basis of the attitude they carry because you can train people but you cannot get them the right attitude towards the job. We also involve our tenants in the training programmes so that if any untoward incident happens in their stores, they are fully geared to deal with it.

    How do you think the opening up of FDI will help modern retail in India?

    Opening up FDI will get more global brands into India. At the same time, it will create a lot of employment opportunities. FDI is going to be a positive force, whether it is allowed into luxury or any other area. Right now, some of the global brands are not comfortable coming in with an Indian partner on board.

    However, even if there is 100 percent opening of FDI in retail, I do not perceive too many foreign brands taking total advantage of it. Many of them will still feel comfortable sharing some percentage of the revenues with an Indian stake-holder as the latter will guide them through the ropes, help them come to grips with the culture of the country, comprehend the rules and regulations, run around for the licenses and understand Indian customers.

    *This interview was originally published in August-September 2012 issue of Shopping Centre News.