Virtuous Retail has been at the forefront of retail news in India over the past many years. VR, as it is better known, is the retail arm of the Xander Group, and recently marked its 10th anniversary in the retail industry.
Renowned as the forefront of building and operating cutting-edge lifestyle centres, VR Group’s objective is to serve the evolving retail market in India as well as discerning Indian consumers.
Following the successful launches of VR Surat in May 2013, VR Bengaluru in 2016, and the acquisition of North Country Mall and its subsequent conversion to VR Punjab in early 2017, the brand has now moved on to polishing the latest, exciting addition to its kitty – VRChennai.
VR’s current portfolio comprises of 5.5 million sq. ft.of space with these four flagship centres across India. Going by its reputation of leveraging extensive capabilities across the value chain of development, ownership and operations, VR aims to grow its portfolio by adding centers in other key markets, including the National Capital Region of Delhi, the Mumbai Metropolitan Region, Pune, Hyderabad and Kolkata.
Organised retail has taken it slow and steady in India, making impactful inroads in the field to successfully establish organised retail of 4-5 per cent over the years. Today, this rate has grown to approximately 10 per cent.
VR got into the retail business exactly 10 years ago. The group was formed in 2005, ironically at a time when the retail scenario in India was in the doldrums, severely struck by soaring inflation rates.
“Fundamentally from a macro standpoint, we have always believed in India’s consumption story. For us, and the biggest challenge with a lot of people playing the market today is how do you as a retailer get to open quality doors, how do you get quality real estate,” said Rohit George, Managing Director, Virtuous Retail South Asia.
At the sidelines of the India Retail Forum 2017, held in Mumbai, he said, “In 2007, when the market was in a similar kind of euphoria, everyone wanted to build a retail mall, whether it was a land owner, whether it was a developer, irrespective of whether they had done retail before or not. Clearly, over time, people have realised that it’s a specialised business, and it is at some level – every level – a retail business, where it’s important that you understand different categories. You understand essentially how the market moves, you need teams that think how to build a retail scale.”
The Market Standpoint
From a market standpoint, VR has been bullish over the past seven to eight years and will continue to be so in the near future.
“From a market standpoint at Virtuous Retail we have been bullish over the past 7-8 years and we continue to be bullish, today we have 5.5 million sq. ft which we own 100 percent in key gateway cities of India – we are in Surat, Chennai, Bangalore and Punjab We continue to look for acquisition opportunities in the top 10-12 cities of India, That’s where our focus really is and predominantly where the organised consumption is, our strategy to hit the market is multifold – we are looking at buying land and we are looking at getting into brown field developments, we are looking at build up developments that meet our grade and criteria for quality development,” he added.
Importance of Design & Zoning
Beyond the type of tenant, or the size of an anchor, the most important question to ask from a developer’s point of view is what type of a user experience is being created for consumers. From interiors and aesthetics of the interior, but also the need to create a development that offers the consumer a varied and unique experience. The quality of the exterior and interior lighting, the nature of the public realm, the design and placement of the environmental graphics and way finding elements are all designed by specialist consultants that when managed well can add great value to user experience.
The recognition of people wanting to move around quickly with good supporting infrastructure and offering qualitative public spaces supported by a rich offer in tenant mix adds to creating the sense of lifestyle.
Concurring with this, George said, “At some level, we are a curator of experiences from the point of view of the consumer – essentially how the consumer thinks about our product. We make sure that everything is new, innovative. We will not take design which is in Surat and replicate it in Bengaluru or Chennai. A lot of our product is based on history and essentially just what connects the community and the city to our project.”
There are certain other things which need to be kept in mind before developing a mall. Developers need to understand what makes a mall different from others. Is it a high tech interactive facade? Is it a new open public plaza holding a range of events during the day and turning into a performance plaza at night? Or is it a place where people can gather and watch a film via bluetooth on the big screen? Is it the retail supplementary to an even bigger type of offering? The important thing is to think out-of-the-box and find new exciting ways to incentivise people to shop and linger.
Highlighting the balance between the design, branding and zoning, George said, “It is important to understand what brand mix works for a city. Mall developers should also explore other avenues which are important and necessary for a wholesome shopping and social space experience. In the case of Virtuous Retail, we are in the business of creating experiences. At every step we are a master retailer. We bring the right experiences to people. Every place is not about the right retail mix.”
The Omnichannel Approach
Omnichannel offerings and the challenges behind the process are top of mind for every mall developer, retailer, retail analyst, and industry expert.
Convenience and ease of purchase have become key decision-making factors for retail consumers and Omnichannel provides consumers with varied options to achieve this objective.
“We have an Omnichannel strategy. Having said that we are primarily a real estate company … we create social fabrics, which is the real estate space where people can come. The reason we are creating Omnichannel retail is essentially how do we trade up, how do you get our current retailers to increase their trading. We are not going to say that we are going to focus only on Omnichannel and then we need to switch there, we will obviously do a mix of both but our priority is obviously going to really be how we create the experience,” George concluded.