Executive Director Inorbit Malls India Pvt Ltd
Elsewhere in the US, the demise of the malls is being talked about. What could be the scenario here in India?
With development of micro markets and population growth in top cities, demand for more number of shopping avenues will increase. Unfortunately, India still lacks the supply of malls vis-à-vis the population. Most of the tier I cities have malls and retail stores to fulfil consumer demands. Tier II and tier III cities are still at a growing phase. There is ample potential in these cities.
What impact will implementation of GST have on the retail scene in India?
Introduction of Goods and Services Tax (GST) will be beneficial to the retail sector at various stages. This move will facilitate the ease of procurement of raw materials which indirectly will open gates to new suppliers. In addition to this under GST, the taxes on services can be set off against taxes on goods. GST will help retailers operate on a supply chain model compared to tax model.
The government recently granted permission to keep malls and shops open 24 x 7. What is the feasibility of this model? Has Inorbit implemented it? How has it fared so far? What are the additional costs of staff etc panned out vis-a-vis footfalls and conversions?
Yes, we are positive and we see this as an opportunity. This policy coming into force will take some time to be converted into a law by the state governments. We are also closely monitoring the same since it involves evaluation of costs in terms of water supply, electricity, housekeeping and safety measures. But at the same time, cities which are stressed with infrastructure will get longer operational hours to give to consumers, which will be a boon for shopping.
What are the key lessons that Inorbit has learnt about consumer behaviour?
There is a lot of potential to increase overall consumption, we are still in the nascent phase and have not reached to the point where consumer is fully exploited. If we provide the right services, consumers will spend.
Which cities do you plan on focussing in India? Any plans of exploring tier II and tier III cities?
We usually keep evaluating various opportunities - both greenfield and brownfield from time to time. This again depends on several factors like valuation, location, size of the land etc. In case we come across good opportunities in the Northern part of India we will be happy to evaluate them. We are also evaluating options in the markets where we are currently present to further build up our portfolio.
Apart from tier I cities there are good opportunities in tier II and tier III cities. We have a mall in Vadodara which is performing well.
What are the major challenges that you face currently?
There is no regulatory guideline for the retail-real estate industry which can act like a ready reckoner. Also lack of town planning and poor infrastructure is a major challenge faced currently.
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