Is it Game Over for Malls?

Whose fault is it, I wondered, when I entered this iconic location last weekend. The Mall was nearly empty on a sunny Saturday afternoon. Car Parking area, which is the core identity of any Mall or Shopping centre such as a Retail Store or a Hypermarket was barely full, with a few cars parked intermittently.

The ground floor has a Mercedes Benz Car parked in the atrium, with curious onlookers not even sure if they would like to go closeby. Basics, which has won the hearts of Chennaites being a local brand with an International appeal has shut store. And so have so many stores. Lifestyle Department Store, the Anchor store of the Mall wears a dull look. The security guard at the entrance seems unhappy and bored with almost no visitors for a while. Even some of the food outlets and a café which were doing some basic business seem to be shut. I walked up the Escalator and was surprised to see empty stores all over!

The Foodcourt was the saddest. Half the counters were shut. The one or two who were functioning were neither providing tasty food nor were bothered about customer service. They were just serving a need, of thirst and hunger and nothing beyond. The dining areas was hardly populated, with many tables not even having chairs, forget patrons. Those who were having a meal were merely passersby and I couldn’t notice even a few of them with shopping bags.

McDonalds continues to attract crowds, perhaps the brand pull makes all the difference. The play area did have some crowds, but not sustainable to send them to other parts of the mall.

Inox Multiplex with half a dozen screens was barely empty, with 4 new releases this week. That food prices in the canteen area of Inox is a put off is another blog column by itself! Even then, people should come to watch a movie in the weekend? That was also not to be seen.

Despite being in the centre of the city (and hence its name), why is the mall so empty? What went wrong with the Mall which was once the pride of Chennai? A decade back, rental costs in the mall used to hover around Rs. 180-300 per sft. Now there are hardly any takers. Retailers have shunned the mall. Food Outlets, which would anyway attract crowds and make some decent revenues seem to dislike being in the Mall. Whose fault is it anyway? Is it that the customers walked away from the Mall to bigger and better options such as Express Avenue Mall which is about 5 kms away? Or have they gone farther to the likes of Phoenix Market city or Vijaya Forum Mall?

This Mall has huge potential given its location, a stone’s throw from the Marina Beach and easy access from the rest of South Madras. It has enough parking space for shoppers, enough shopping space, cinema, foodcourt, play areas, what not. With a little bit of effort, this Mall can be turned around. Will the authorities get a good consultant and work in the renovation? Time will tell.

Casenation Bloggers Meet

I was invited to attend a blogger meet a few days back, which was organized by Chennai's leading social Media Agency EchoVME's DInfluencer outfit. The location was none other than Coffee Tales, a neighborhood cafe tucked in the bylanes of Anna Nagar East. We were all seated by 6.30pm and in a few minutes, Sorav Jain of EchoVME gave an introduction about Casenation, a budding startup from Chennai which makes premium back cases for various smartphones. He showcased some unique products of the brand and later invited Amit, the Founder of Casenation to present the brand.

Amit introduced himself as a thoroughbred Madrasi with strong roots with the local culture. The BRand was incubated a few months back by his friends and him and they are currently self-funded. They have a manufacturing facility in the outskirts of the city and have a dedicated design team which creates unique and funky stuff periodically. They have cases for almost all smartphone brands and are increasing the portfolio regularly. On the distribution front, they are currently present online through their dedicated website http://www.casenation.in which seems to have a neat interface although they could add a lot more features such as add to cart from the product icon, compare products, etc. to name a few. 

They also have a physical presence at cafes such as Coffee Tales. Amit insists that this is a product that potential customers should touch and feel and hence they are focussing on offline expansion as well. This hybrid expansion, popularly known as Omni-Channel Retailing is fast catching with the likes of Croma and Ezone promoting a similar experience where customers can order online and collect the products offline.

Amit also proudly says all his products are locally sourced and manufactured giving a fillip to the Make In India Initiative that is promoted by the Narendra Modi Government. Later he showcased some of their unique products among which what caught most of my attention was a wireless charges for iPhones! A small extension needs to be added to the iPhone on the charging point and the phone needs to be just placed on the device - bingo! it gets charged... He also showed some very interesting wooden cases which were, though a tad expensive had a great fit and finish. 

Later, Team EchoVME organised an interesting game - one of us had to start a story with the imagery on the case we had and it goes on like a chain. We started about a girl imagining to visit India, riding on a bike to Ladakh and finally attaining nirvana at a Budhist Monastery and so on. Was a fun and interesting game. The evening ended with a bag full of goodies including a Parker Pen, a Leather Writing Pad and a Gift Voucher from Casenation to buy a case of our choice for ourselves or our loved ones, which was a kind gesture. Overall a very well organized event by Casenation & EchoVME. Look forward to catching up more with fellow bloggers soon!

FDI in Ecommerce

The Govt. of India has recently affirmed through a circular through DIPP that Foreign Direct Investments in E-Commerce companies is allowed upto 100%. There is cheer among a few although there are clauses and causes for worry for many. The notification says that 100% FDI is allowed only in companies that operate as a Marketplace and not on those who operate with their own Inventory. 

Let me clarify this with some examples;

Amazon, Flipkart, Snapdeal and PayTM are the big Four Marketplaces in India and so is my own startup Oyethere.com. In these models, the company doesn’t own any inventory and merely facilitates the sale of products between Retailers/Sellers and Customers. Marketplaces bring together the above-mentioned two parties and complete the transaction. There are several variations here too. For instance, some marketplaces merely connect the buyer and seller (OLX) and the money is paid by the buyer to the seller directly. A majority of them including Flipkart and Oyethere.com collect the money from the customer while the Retailer provides a Bill/Invoice to the customer. The Marketplaces then repays the Retailer with its Sales value after deducting commission, if any. However, there is a catch for the big two companies, Flipkart & Amazon. Flipkart has a subsidiary company by the name WS Retail which is the largest seller on its own marketplace. Similarly, Amazon has a 49:51 JV with Cloudtail which is owned by Catamaran ventures, which is in turned owned by the family office of NR Narayanamurthy, Chairman, Infosys. These two companies could face issues because the DIPP Notification on FDI states that no more than 25% of Sales can be derived from one seller in the marketplace. This could be a potential spanner in the scheme of things until these large companies find a legal way out.

The most affected ones would include the likes of ZivaMe (lingerie), Urban Ladder (Furniture), Hopscotch (Baby Care) YepMe (Fashion) which has Shah Rukh Khan as Brand Ambassador and is also an Investor, Myntra (Fashion) owned by Flipkart and many other small and budding Ecommerce players who have already received foreign funding or are in the process of raising one. These companies are legally not allowed to receive FDI more than 49% which would never be possible.

Having said the above, the biggest beneficiaries would be the offline Retailers like Viveks Ltd. (Consumer Durables) who have already been selling online through Marketplaces. Oyethere.com also enables offline retailers like Café Coffee Day, India’s largest café chain with over 1,500 cafes across the country, Brown Tree (Organic Food), CeeDeeYes Supermarket, Smiling Baby (baby shop) and many others to sell their products online through its portal thereby facilitating the sale between the Retailer and consumer. I am personally meeting several Retailers to convince them to come on board our startup Oyethere.com and benefit from the incremental business opportunity without spending a dime on Marketing or Business Development.

There is a deterrent to Marketplaces as well – they are not allowed predatory pricing, meaning they cannot unduly discount the prices of products and ensure that the prices are merely competitive. This brings a lot of trust on marketplaces like Oyethere to Retailers because they are sure that they, and not the marketplaces, have a final say on the final pricing of products.

One of the promises of the Narendra Modi Government in their election mandate was that they would not allow 100% FDI in Multibrand Retail. And they have stuck to their guns. However, Ecommerce is seen by the Government as an enabler of trade and not a threat and hence this move which is expected to benefit very large marketplaces like Amazon and Flipkart and newbie startups like Oyethere.com.

Look forward to some interesting days ahead in this space.