CASE STUDY 4
Cross Roads
The Crisscross of Two or More Roads, Crossroads, a central meeting place where a crucial decision ought
to be made. For Bombayites, Crossroads means more than this. It is where 'world class shopping facility
and entertainment' are available under one roof. Crossroads, officials of "India's first real mall claim",
offers a wide variety of products, seemingly endless choice of theme restaurants, entertainment and fun
games for all ages and all classes, daring to argue that what Chennai and Bangalore claim are giant-sized
'arcades'. The most happening place in Mumbai has undoubtedly been Crossroads, Almost all roads in
Mumbai seem to go to this one location which has an answer to all your shopping as well entertainment
needs. No wonder the management prefers to call it a `destination landmark’ for Mumbai. India’s first
international class shopping mall, opened on 5th spetember,1999. The mall is spread over three building
and four storeys. There is Pyramid, which is a departmental store by itself. In addition there are most of
the big names in fashion and lifestyle. Shyam Ahuja, Ensemble, Swarovski, Lacoste, L’Oreal, Zegna,
Hallmark, Danabhai, Aria, Rohit Bal, Ashley shoes, Levi’s Planet Kids, Lee, Nike, Addidas - you name it
they have it. The focus being on `Shoppertainment’ you have Jammin’ the recreation arcade for fun and
games. The gourmet in you is also catered to with Food Court, which offers six types of cuisines
including Indian, Pizza, Curry and rice, Chinese, Lebanese, coffee and desserts. There is also the Italian
restaurant Biscoti, and Cafe Ole, the sports cafe. Retailing in India, with a few exceptions, mostly consists
of small family-owned shops that stock particular kinds of goods. So you have kirana shops that stock
grocery or clothes shops that stock clothes. Needless to say, retailing is scattered and un-organised.
Organised retailing first came to the South and is now spreading all over India by the entry of a number of
companies — notably, the Tatas with Trent, the Piramals with Crossroads the Rajan Raheja group with
Globus, the Goenkas with Food World and so on. Prior to the formal launch of the Piramals-owned
Crossroads, Mumbai’s first shopping multiplex, Piramal Holdings chairman Ajay Piramal at a press meet
said at Crossroads "there would be something for everyone." The implication clearly was that most people
could do some shopping at the mall. As things later turned out, maybe he meant window-shopping! For,
that is all most would-be shoppers could do when Crossroads opened to the public. At that time, the mall
was abounding with exclusive names like Shyam Ahuja, Ritu Beri, Rohit Bal and Swarovski — of course,
at an astronomical price. Two years down the line, exclusivity at Crossroads is being replaced by
affordability. Now pedestrian consumer durables shops selling Whirlpool refrigerators and Videocon
televisions rub shoulders with Swarovski’s outlets. And the evolution is still on. The Trents and the
Crossroads soon proved with their high prices that, they were not for everyone and only the well-heeled
could afford to shop there.
Subsequently, when the climb down started it became clear that this is not the way it should be.
Retail industry experts say that in 2001, retailing entered a new phase in India. Established retailers are
now experimenting with new formats in infrastructure, pricing and customer-care. The biggest change in
2001, therefore, was on the price front. The urban population was increasingly strapped for time, and
sought a shopping environment that let a family spending time together. A survey by McKinsey and KSA
Techno Pak observes from their research, that people wanted three major things from retailers –Shopping,
Environment and Food. Mumbai’s first tryst with tryst with world-class malls is proving to be a rich case
study for the 20-odd malls expected to come up over the next 2 years. Keeping the shopping, environment
and food theme in mind, crossroads model was developed. The pyramids dept store was set up to act as an
anchor tenant. Apart from it, a gaming venture jamming and a food court offering about five cuisines
came up. Another major anchor tenant is McDonalds and Pantaloons. When the mall opened in 1999, the
response thrilled the management .weekdays saw 30000-40000 people walk in. On weekends, this would
go up to 100,000. But most walk-ins were curious on-lookers. Crossroads had relied on the basic principle
of mall management: it used a clutch of anchor tenants like McDonalds and Pantaloons – to attract traffic
to the mall.
The Rationale: This traffic would then disperse into the rest of the mall. But it says it also took care not
to position the mall as too upmarket by broadening the mix of tenants.
The reason? The problem with going too premium, says Mckinsey an associate, in that a mall would end
up with a client base that probably visits it one a year. Instead the ideal mix would have people dropping
in one every month. An indulgent shopper, Anurag Khosla, says, "I think it'll take some time for people to
digest the whole concept. That's because people are not very brand-conscious yet. But once that happens,
the conventional idea of shopping will change." While other shoppers, excitedly comments that she can
"get all you need under one roof. I'm having a ball out here. It's one place where everyone can leisurely
spend time.The wide variety of glitzy shops, the energetic crowds, the general hustle-bustle, the hiss and
the buzz of the marketplace.” There is nothing like this in the whole of India”.
Crossroads offers big labels, style, and, of course, reasonable prices." Not everyone agrees.
Sure the mall's location at Haji Ali in south central Bombay is any businessman's dream, its ambience is
exquisite, the shops are stunning, but the prices are exorbitant, say shoppers. "The prices are horrifying
and unbelievable”. .It's definitely not a place for everybody. I think McDonalds is the only attraction of
this place." Shopkeepers at the Heera-Panna complex may nod in agreement. H-P is next door to
Crossroads; it is the favourite hangout of Bombay's collegians. The 100-odd tiny, well-stocked outlets sell
everything 'imported', from perfumes to cigar-lighters, torch lights, branded sneakers, garments, toys,
electronic durables, cosmetic products. "The two complexes cannot be compared at all. They cater to two
different markets. Customers can bargain here." "A new place has its own attraction. Even we were
curious, and we went there to get a feel of the scene. I feel the craze will wear off after a while.
Where are the tenants? An anchoring problem
The biggest casualty is the rentals they could reduce tenant turnover significantly. Hence an exclusive
study of consumer patterns can help in deciding which brands are necessary to be staged in a mall. This is
important as the malls cater to SEC A of the population; the number of brands this class of people buy is
still limited.
Inorbit has also conducted studies to tap synergies that exist between tenants. So it decided to plug its
anchor multiplex (fame) along with food options McDonalds and pizza hut, and an entertainment hub,
Timezone. So, anyone who visits the mall is offered a complete entertainment options. “We really can’t
expect a behavioral sea change from the average Indian consumers .we don’t expect him to buy jewelry or
books when he comes to watch a movie, but we would like to bundle the entertainment and food options
together, because that seems like a good synergistic combinations”. While other malls are trying to sort
out basic infrastructure, the limited basket of large-scale organized retailers makes it very difficult for
malls to get the kind of anchor tenants they want. Hence a mall developer has to approach every available
retailer to get him to anchor his malls. Even today; the country has no big retail chain in the white goods
or the pharmaceutical segment. A high maintenance cost is leading the developers themselves to drive
away their other tenants. This is done by factoring in an additional component to the rentals called the
common area maintenance (CAM) charge. Malls charge as much as Rs 20 per sq ft every month as CAM
and drive up the rentals. Suffice to say, malls will lose these tenants too of they plan to overcharge.
Runwal
The city-based construction group, has launched India's largest shopping mall, RMall, in Mulund, a
northwest suburb of Mumbai. Now functioning over an area of 1.25 lakh sq ft - the planned built-up area
being 4,20,000 sq ft - the mall sports India's first seven-storey car-parking facility and exclusive outlets
such as Lifestyle, Big Bazaar, Haiko Supermarket, Provogue, Planet M, Pizza Hut, Copper Chimney,
Noodle Bar, Bombay Blues, Weekender, D'Designer, Archies, Catwalk, café coffee Day and Pride
Furnishings. Runwal Chairman, Subhash Runwal says the entire mall will be ready by May-end while the
ground, first and second floor will be completely operational by mid May 2003. Besides shopping, RMall
houses restaurants, multiplex theatres, and recreation and leisure areas for kids and family.
Deira City Centre –Dubai
Deira City Center has plenty to offer, a choice of over 250 shops, restaurants, fast food outlets, a
children’s entertainment centre, City Centre Hotel & Residence and much, much more. It is one of the
largest shopping venues in Dubai. It includes: Cine Star Cinema, JC Penny, Woolworths, Ikea, Carrefour,
Benetton, Zara and many more. The Deira City Center is located near the Dubai Creek Golf & Yacht
Club. The layout of Deira City Centre is simply unique. It has been broadly divided into: the Fashion
Court, the Home Court, the Jewellery Court, A World of Good Food, Fun for all Ages, The Winter
Gardens and The Palm Court. The centre boasts of its wider collection of
Shops and has been dubbed the largest venue in the region providing banking facilities for the customers
convenience.
Questions
1. Create a strategy for mall developers, planning to construct one in metros like Chennai, Banglore
and Mumbai? How will it differ if they chose the suburbs instead of the heard of the cities?
2. Bring out a SWOT analysis of Crossroads and draw a comparison with the upcoming other malls
in the cities?
3. Considering the ratio of the urban upper class consumer segment with the wider middle class
segment, should the malls need specific tenants within to cater the majority? How can they devise
a plan to convert most of the casual on-looker to potentials buyers?
4. Discuss and review the major problems in investing in shopping malls in the metros?
5. What are the major differences in the shopping malls of Indian with those abroad? Does the
consumer segment vary or the consumer behavioral patterns? If so, how?