Pune, the city which has seen considerable retail real estate developments over the last few years, still lacks a shopping mall like Inorbit, The Phoenix Mills or a Select Citywalk. According to industry experts, the city, which is largely occupied by mid sized malls like SGS Magnum mall, Mariplex and Nucleus, besides speciality and seamless retail destinations like Ishanya and Central respectively, actually has plenty to offer in retail development and prospects.
Pune, which is also called the cultural capital of Maharashtra and is among the educational hubs of the country, is home to a number of transnational companies such as IBM and Dell as well as Indian majors such as Bajaj Auto, Wipro and Infosys. With the influx of young and upwardly mobile professionals, who are entering the city to meet the demands of the burgeoning IT industry, the city has been witnessing a fast changing consumer spending pattern. As a result, retail companies are finding it a potential market for high-end lifestyle products and have been strengthening their presence across the city, giving rise to the corresponding demand for better and quality malls. For instance, after the success of the first Pune Central mall that is spread over 13,000 square feet and located in the heart of the city on Bund Garden Road, Future Group launched its second Central mall at University Road in October 2007, which shows the promise the city offers for retail.
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“Thanks to the burgeoning new-age industries that are transforming Pune into a truly cosmopolitan city, we foresee a very lucrative market, especially for organised retail” – Kishore Bhatija
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Elaborating on the profile of the population and potential customer expectation of the city, Ajit Joshi, CEO & MD, Infiniti Retail ltd., states, “Traditionally, Pune is a city of educated people and recently it has become a hub of the IT industry as well. It’s a cosmopolitan city, with students and army and air force personnel comprising a good chunk of potential customers.”
Retail experience
Croma, the consumer durables and electronics retail chain of Infiniti Retail Ltd, operates three stores in Pune; two in malls and one in a stand-alone property. The two malls in which Croma is operational include Ishanya Mall and Krome Mall, which opened in August 2007. The standalone store is at Aundh, close to the city’s ‘Technology Park’, and opened in the same year. Elaborating on the retail experience, Joshi explains, “Our over one-and-a-half year of experience suggests that although Ishanya has a very good catchment due to its proximity to the airport and the consequent development of residential projects in the vicinity, the mall has been suffering from lack of footfalls due to an inadequate tenant mix.”
The Bombay Store has two operational stores in Pune, one at MG Road — a 12-year-old high street store spread across 5,000 square feet of retail space, and one at Ishanya mall operating from the past eight months.
For both stores the company finds mixed responses in two different locations. Following the observation of Joshi at Infiniti, Asim Dalal, MD, The Bombay Store states, “While the performance of our store on MG Road is overwhelming, the outlet at Ishanya is not satisfactory.” Dalal believes that one of reasons for the low footfalls at Ishanya can be the location itself, which is not in the centre of the city. Perhaps the positioning of the mall, which houses brands predominantly in the home improvement category, also interests a particular section of customers only, he adds.
“I must say that Pune has not yet reached a level of standardisation in terms of retail real estate development, although the city can easily accommodate malls like Inorbit, Phoenix and Forum,” Joshi adds.
Pune at a glance
Key retail stores/ brands operational: Shoppers Stop, Westside, Pantaloons, Lifestyle, Globus, Hidesign, The Home Store, Zodiac, Metro Shoes, Blackberrys, Hakoba, Piramyd, Levis, Spykar, Esprit, FCUK, Gas, Calvin Klein, Nautica, Lacoste, Croma, The Bombay Store, Big Cinemas, Cafe Coffee Day, McDonald’s, Gelato Italiano, Republic of China etc.
Prime retail locations: MG Road, Camp, Deccan, KP Road, Bund Garden Road, Senapati Bapat Marg, Nagar Road, Kalyani Nagar, Aundh, JM Road and FC Road.
Population: Over 5 million of which sub-urban areas constitute around 4 million.
Family income range: Rs 2.5 lakh to Rs 50 lakh per anum
Growth factor: As per Pune Municipal Corporation’s Environment Status Report (2007-08), the IT and Biotechnology sectors have driven Pune’s booming economy to a per capita income of Rs 46,000 per annum, which is almost 50 per cent higher than the national average.
Retail prospects
Sharing his insights on the prospect of retail in Pune, Kishore Bhatija, CEO, Inorbit Malls India Pvt Ltd, says, “Thanks to the burgeoning new-age industries, which have been transforming Pune into a truly cosmopolitan city, we foresee a very lucrative market especially for organised retail.”
According to his observation, Pune today truly boasts of young people who in addition to being well traveled, are now moving towards fashion- and luxury-led lifestyles, whereas a significant part of the population look for a balance between the traditional as well as modern lifestyle and values.
On a similar note, Dalal at The Bombay Store also states, “Going forward, we will open one more store in Pune in the near future, if not immediately.”
Quality retail space
According to the major retailers operational in Pune, the city, which has a mixed consumer structure of all age groups and comprises a big chunk of the young population as frequent visitors to malls, deserves a quality mall culture. “I don’t see any particular mall, which is very significant and operating in a large scale here. We can mention the existing ones actually as shopping complexes only,” Dalal remarks.
Speaking about the purchase behaviour and mall shopping habits of Pune inhabitants, Joshi states, “Consumers here need enough exposure to quality shopping malls. Besides, customer orientation is also a necessity for the success of the malls in the city.”
The dream comes true
Considering the fact that the city lacks quality retail space but has a huge potential, Inorbit Malls, part of K Raheja Group, has been developing Inorbit Pune, which spreads across a total 5.39 lakh square feet of area including 3.15 lakh square feet retail space. Scheduled to be operational latest by the second quarter of 2010, the property will eventually have Shoppers Stop as one of its anchors, besides a four-screen multiplex operated by Cinemax and a hypermarket. Elaborating on the plan, Bhatija at Inorbit Malls states, “The Inorbit mall planned at Pune promises to deliver a world-class, holistic experience at par with the best in India. With a wide range of brands across retail verticals, the mall will also offer adequate parking space, something that Puneites have never experienced before.”
Describing the infrastructural development in the city, Bhatija adds that Pune is still classified as a mini metro. “Due to the fact that Pune is getting the status of an IT and new-age industry hub, infrastructure has been improving by leaps and bounds over the past few years. I believe that organised retail is yet to make its mark in the city and there is every scope for improvement across all formats of retail,” he hopefully concludes.
— Sarimul Islam Choudhury
