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For shoppers in Mumbai seeking year-round discounts on big brands, Ambedkar Road in Parel has long been the preferred destination. Delhi has its fair share of bargain hunting havens, from Chattarpur to Karol Bagh, GTB Nagar to Laxmi Nagar.
While high streets have traditionally attracted factory outlets of big brands from Nike to Puma, Adidas to Calvin Klein, there is a new retail concept that is catching the attention of mall developers and retailers alike: Outlet malls.
Outlet malls
At least eight to ten such outlet malls, which are one-stop shopping destinations for bargain hunters, are coming up across the country, according to retailers and mall developers that FE spoke to. These malls will typically house around 80-100 different brands across clothing, footwear and accessories, offering 50-70% discounts year-round. The area for each mall is around 300,000-600,000 sq ft, with the rent (per sq ft for retailers) being a tenth of that in regular malls.
“Outlet malls world over are typically located outside large cities, near highways and expressways, offering low rents to its retailers, who are assured of a dedicated space for discounting selling. In India, the concept is picking up, mostly at the periphery of large consumption centres to take advantage of low rents in these places. High streets within cities are also increasingly becoming chaotic and crowded, aiding the growth of outlet malls,” said Prakash Patel, MD, Bhumi World. The latter is building a 600,000 sq ft outlet mall in Bhiwandi, near Mumbai, which will have 86-90 top brands on discount year-round.
Experts view
Experts such as Susil Dungarwal, a retail and shopping mall specialist, who runs an advisory called Beyond Squarefeet, said that retailers at outlet malls can pass on the gains made in rentals to consumers and are ensured of a premium space to liquidate their inventory. But other experts such as Gulam Zia, executive director, Knight Frank India, said that online shopping channels as well as the propensity of retail brands to offer more sale days at their existing stores and the location of outlet malls outside cities makes it inopportune for retailers to take to this concept just yet. “Outlet malls are at a nascent stage and will take time to pick up,” he says.
Yet, some retailers remain optimistic about this trend. Manish Kapoor, MD, Marks & Spencer India, said that popular and premium brands are looking at outlet malls seriously, while luxury brands remain slower to accept this concept here. “Uptil the premium end of the fashion and lifestyle market, outlet malls are becoming an interesting route to liquidate stock for retailers. Many have no problems selling at discounted prices. But super premium, bridge-to-luxury and luxury brands remain skeptical of outlet malls fearing that it may dilute their brand proposition,” Kapoor said.
While Punjab has taken the lead in launching outlet malls, catchments such as Bhiwandi, near Mumbai in Maharashtra, or Erode, near Coimbatore in Tamil Nadu, or Kolar, near Bengaluru in Karnataka or Patancheru, near Hyderabad in Telangana or cities such as Faridabad, Ambala and Sonepat, close to the Delhi-NCR region, are seeing the development of outlet malls.
Most of these outlet malls are being set up by local players rather than large real estate groups. The only exception here is the Delhi-based Pacific group, which has an outlet mall in Jasola, South Delhi. Cities such as Ludhiana, Bathinda, Jalandhar, Amritsar and Barnala in Punjab, meanwhile, are already home to outlet malls, set up by small players.
“Punjab is a brand-conscious state. Even a farmer’s son could be wearing Puma shoes. So, it is not surprising that outlet malls which is a western retail concept, notably, the US and Europe, has picked up in the state. There are at least 5-6 good outlet malls that are doing brisk business in the state, and the number is set to rise with nearly 10-15 more under construction in various cities,” said Gurcharan Singh Wahi, director of GSW Infra, a real estate developer in Punjab.
While Wahi has an outlet mall in Bathinda, his company is setting up one more in Ludhiana, which will be up and running in the next couple of years.
“As more retail brands set up base in India and expand their operations, the need to liquidate their inventory will grow. Outlet malls offer consumers the option to touch and feel what they are buying as opposed to online shopping, which does not give them that option. Outlet malls are also evolving to include food & beverages and entertainment options to make shopping well-rounded,” Dungarwal said.
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