According to CNN (Money), Indians are no longer satisfied with buying Pantaloons from stand-alone retailers and want to buy all sorts of gadgets from western-style shopping malls. Which is understandable, after all, how likely is it that they will get to buy Pantaloons from Christopher Walken? (Don’t get it, Google it or get out more.)
Apparently all our outsourcing in IT and services has led to the rise of a new middle class in India’s Silicon Valley and they have an urge to spend this new found wealth. As a result, developers are going mall crazy and coughing up oodles of cash for mall development. For example, Sobha Developers is spending $250 M on the Sobha Global Mall, a new shopping paradise to be built around a skylighted atrium on 16 acres and include a 13-screen multiplex, food courts, a rooftop disco, a 300 room hotel, and enough parking for 3,400 cars – in a country where only 4.5% of households have a car (even though there are 12 vehicles per 100 people – highlighting the fact that only the super rich own cars and that those that do often own multiple). Furthermore, there are only 1.5M km of paved highways as opposed to 4.2M km of paved highways in the US, despite the fact that India has 1.1B people compared to the United States’ 300B.
Which, of course, leads me to wonder about the wisdom of investing $250M on a one-of-a-kind experience for the shopper. A shopping paradise sounds great, but how likely is it to be profitable when there is a cost of maintaining a huge parking lot in a country where your average citizen cannot afford a car and where those that can don’t have the roads to drive on? And how profitable is the food court going to be with brand names such as Burger King and Taco Bell in a country where most of the citizens do not eat beef? Maybe they’re planning for the future, like 2020 when the average Indian income will be four times what it is today. But that’s a long time to wait for a return. Makes you wonder.