‘Lower footfalls,
but higher sales’
Devesh Srivastava
Friday, December 15, 2006 at 1101 hours IST
Updated: Friday, December 15, 2006 at 1245 hours IST
When
the rush to develop malls started within the NCR about four-five
years ago, most developers chose to develop plain-vanilla malls.
Within Gurgaon especially, you had several malls coming up along MG
Road. Most offered the same mix: a departmental store on the ground
floor, similar retail brands, a kids’ zone, a food court and a
multiplex. There was little to differentiate one mall from the
other.
At that point, Aerens Gold Souk International took a gamble by
choosing to set up a speciality jewellery mall. They even chose to
locate it in Sushant Lok, away from Gurgaon’s mall hub, MG Road, as
they wanted only serious buyers to visit their mall. In this
interview with Devesh Srivastava, Surender Gupta, chairman,
Aerens Group explains why his mall has done well when so many other
malls have been plagued by problems like low footfalls, or low
conversion of footfalls into sales.
Your company’s goal is to open 100 souks
within 100 months across 100 cities. How do you propose to
accomplish this?
We will set up these 100 souks in grade A, B and C cities having
a population of 4-5 lakh or more. Within three years we will
finish purchasing land, and by the end of the fifth year we will
finish construction. These hundred souks will belong to all
categories: gold souk, wedding souk, such as the one at
Pitampura in Delhi, and a few general purpose malls as well.
Will the jewellery brands that have come
into the Gurgaon Gold Souk also go to your other souks?
Yes, a lot of these brands will go to the new destinations— at
least 50-60 per cent. But new brands will also come in. At all
these souks we will offer a mix of Indian and foreign brands.
There will be regional variations also. In south India, for
instance, a number of south Indian retailers have taken up
space.
Which are the cities where you have
already acquired land for your 100 cities in 100 months project,
announced earlier?
We have acquired land in Ludhiana, Jaipur, Kochi, Amritsar,
Chennai, Bangalore, Raipur, Lucknow, Ajmer, and Trichur.
Do you also plan to venture abroad? To
which countries?
We plan to set up gold souks in UAE, USA, UK, Canada, Thailand
and China.
You are among the first players who have
made a success of the concept of speciality malls. How easy or
difficult was it to make the public adopt this concept?
Special bazaars, as a concept, are not new to India. Delhi,
Jaipur, and Mumbai all have Jauhari bazaars. The only difference
is that earlier it was on the high streets, and now it has come
into a mall.
Speciality malls serve the purpose of special
customers group, which is why the latter are willing to travel
to this mall from far away places. At the gold souk, customers
get both quality goods and variety. Though footfalls in
speciality malls are not very high, the conversion rate is very
high. Compared to other malls, Gold Souk gets more serious
customers who come here to buy. We get around a 1,000 customers
on weekdays and about double that number on weekends.
What factors, in your view, contributed to
the success of the Gurgaon Gold Souk?
From the customer’s point of view, the gold souk offers variety,
quality and an attractive shopping ambience. The retailers have
done booming business here, so they too are happy. Some of them
have shops in other parts of the NCR as well. But the kind of
profits they have made in their two years here far exceeds the
profits they have made from their other shops over the same
period.
And how has the experience been for you,
the developer?
It has been good. When we started the Gold Souk, the lease rent
was around Rs 55 per sq ft; now it has risen to Rs 400-500 per
sq ft.
What kind of retail planning do you do
within a gold souk?
Normally we give 25 per cent area to city retailers, 25 per cent
to retailers from that state, and the rest 50 per cent to a mix
of brands from across the country. The lease rates within Gold
Souk make it the costliest mall in India.
We follow three models: outright sale, lease, and joint venture.
Most jewellers prefer to purchase space rather than lease it.
What improvements are you planning in your
future projects?
The earlier malls were built on 1.5 acres. Now we are taking up
areas ranging from 4-5 acres. This will allow us to develop
bigger spaces, which in turn will augment the shopping
experience. In future, we will also organise a lot of events
within our malls to attract more customers, especially during
festivals such as Karvachauth, Bhai Duj, Diwali, and Id.
What is the total worth of projects you
are undertaking presently?
The Aerens Group as a whole has projects worth Rs 15,000 crore,
while Gold Souk International is undertaking projects worth Rs
6,000 crore.
Any plans for getting funds from real
estate venture funds or private equity funds? Or are you
planning an IPO?
We are already talking to private equity funds and should be
able to close deals within this financial year. We have definite
plans for an IPO in a year’s time.
Source : Express Estate
