During India ‘s misplaced years post-Independence, business and commercial activity was treated as a ‘necessary evil’. Businessmen were labelled as rapacious, self-interested people who needed to be kept under strict control. And shopkeepers were possibly among the lowest on the social ladder according to the economic and governance pundits.

In the last 20 or so years, fortunately, that tide has turned significantly – the role of business in economic and social growth is publicly acknowledged. Inspiring leaders such as Narayana Murthy of Infosys, Sunil Bharti Mittal of Bharti, and Ratan Tata of Tata Group offer aspirational models for a new generation of Indians.

Yet, retail, for all the zillions of column centimetres and hours of airtime that it gets, is still seen as a slightly dubious activity.

For most planners on the government side, it has been and remains an afterthought. Often, a few poorly developed square feet are allocated when a new community or urban development is being planned. On the other end, a number of massive glitzy shopping malls are being set up by real estate developers that have no correlation to their surroundings and catchment.

To my mind, retail developments need to be seen as part of urban infrastructure and also, more importantly, as part of the social fabric of a town or city. Government at all levels, especially state, district and municipal level, need to understand that the presence of successful retail developments in their population centres are an indication of the social and economic health of their localities.

A well-planned retail centre not only creates income for the local population and the local government, but also provides a very important socio-cultural platform for interaction between the different segments of a community. The presence of successful brands and retailers acts as an attractive beacon for other businesses, small or large.

Internationally several examples exist – especially in Europe – where after decades of suburban growth, town planners are focussing on re-developing ‘inner cities’ with a mix of large and small retailers, in environments that are shopper-friendly in every way. They are rethinking public transport connectivity, planning in pedestrian-only walkways, greening and sheltering, effective lighting, open spaces, and cultural centres. And yet, this mix would be incomplete without food and shopping.

Government bodies also need to realise that it is not productive to simply hand off large chunks of land to private developers to put up concrete-steel-and-glass blocks in the form of shopping centres. One should be able to look back 30-40 years hence, and say that the development added something positive and organic to the urban landscape in that town or city and was truly beneficial to the local population.

Visionary shopping malls like the Kapaliçarsi (“Covered Market” or Grand Bazaar) of Istanbul that was established in 1461, are obviously few and far between. Bluewater near London in the United Kingdom , and inner city developments on continental Europe offer more contemporary examples. However, India ‘s own traditional markets, at least until a few decades ago, also offer points of reference and inspiration.

I believe a rethink of the role of retail is highly overdue. If urban planners in the government and private developers can work together to plan and create more complete and ‘organic’ retail centres for the future, India ‘s urban centres will be far healthier and dynamic places to live in.

Mall Mania, Mall Madness – alliterate as you will – it’s a phenomenon that is certainly taking over the newsprint, airtime and, quite possibly, your neighbourhood.

A study published in 2005 estimated that by 2007 over 360 shopping centres would be operational around the country, with approximately 90 million square feet. A meagre increase of 0.08 sq. ft. in per capita shopping space doesn’t seem like much in a country of a billion-plus people.

But most of it is concentrated around the big cities – Delhi and Mumbai account for more than half of the total space projected, with the other metros and mini-metros such as Bangalore, Pune, Hyderabad etc. taking the total up to 90% of the space.

One may argue that money (real estate development) is only following the money (consumers) – after all, there are more consumers and higher incomes in these major urban centres.

But why would mall developers expect Delhi’s consumers to suddenly switch en-masse to shopping in Gurgaon, where 6 malls are already active in a short distance of about a kilometre, 3-4 more under hectic construction in the same area and several more scattered around that suburb? Or why do Mumbai’s developers expect people to drive several kilometres from the suburbs on a regular basis to the centre of town to grace only their shopping centre? It is only such expectations that can explain the gold rush mentality that is overpopulating certain areas with shopping centres and malls.

While per-capita availability of A-grade shopping real estate looks really low, in certain areas we foresaw oversupply, with developers thinking in terms of “property” rather than as retail space managers.

Most shopping centre developers have carried out only cursory studies on the customer catchments that their tenants will be expected to live-off. As a result, conversion of footfall into sales is low for the tenants, except for food-courts, which are benefiting from the window-shoppers rounding off a day or an evening of roaming the malls with a meal. There is a lack of differentiation in product and service offer between the shopping centres and, with nothing distinctive on offer, repeat visits and – more importantly – repeat purchases are a challenge.

Developers in smaller towns seem to be following the same model, scaling up space or scaling it down based on the capital cost vs. expected capital gain and tenancy income. They are pitching for much the same brands as tenants as the developers in the bigger cities.

There is competition for customer traffic between the shopping centres and large stores (such as Mumbai’s newly opened Hypercity, across the street from InOrbit Mall, both developed by the Rahejas), between the shopping centres and the traditional high street, and between large format stores and speciality malls.

For the most part shopping centre development in India in the recent years has been seen as an aspiration to be fulfilled – hence, the most important factors have been the size of the shopping centre, quality of fixtures, marquee tenants who can provide the glamour or the legitimacy). The focus has been more on the “positioning”.

The business will begin maturing and will begin taking developmental leaps forward when centres are seen as commercial infrastructure to be planned with the end-consumer in mind, and to be serviced over a certain lifetime.

Until then, we can look forward to announcements of many hundreds of shopping centres, the launch of a few hundred, and the conversion of many of those into uses other than as shopping centres within a few months or years of their launch. And for investors also it might be a game of Roulette rather than Patience.

Mall Mania, Mall Madness – alliterate as you will – it’s a phenomenon that is certainly taking over the newsprint, airtime and, quite possibly, your neighbourhood.

A study published in 2005 estimated that by 2007 over 360 shopping centres would be operational around the country, with approximately 90 million square feet. A meagre increase of 0.08 sq. ft. in per capita shopping space doesn’t seem like much in a country of a billion-plus people.

But most of it is concentrated around the big cities – Delhi and Mumbai account for more than half of the total space projected, with the other metros and mini-metros such as Bangalore, Pune, Hyderabad etc. taking the total up to 90% of the space.

One may argue that money (real estate development) is only following the money (consumers) – after all, there are more consumers and higher incomes in these major urban centres.

But why would mall developers expect Delhi’s consumers to suddenly switch en-masse to shopping in Gurgaon, where 6 malls are already active in a short distance of about a kilometre, 3-4 more under hectic construction in the same area and several more scattered around that suburb? Or why do Mumbai’s developers expect people to drive several kilometres from the suburbs on a regular basis to the centre of town to grace only their shopping centre? It is only such expectations that can explain the gold rush mentality that is overpopulating certain areas with shopping centres and malls.

While per-capita availability of A-grade shopping real estate looks really low, in certain areas we foresaw oversupply, with developers thinking in terms of “property” rather than as retail space managers.

Most shopping centre developers have carried out only cursory studies on the customer catchments that their tenants will be expected to live-off. As a result, conversion of footfall into sales is low for the tenants, except for food-courts, which are benefiting from the window-shoppers rounding off a day or an evening of roaming the malls with a meal. There is a lack of differentiation in product and service offer between the shopping centres and, with nothing distinctive on offer, repeat visits and – more importantly – repeat purchases are a challenge.

Developers in smaller towns seem to be following the same model, scaling up space or scaling it down based on the capital cost vs. expected capital gain and tenancy income. They are pitching for much the same brands as tenants as the developers in the bigger cities.

There is competition for customer traffic between the shopping centres and large stores (such as Mumbai’s newly opened Hypercity, across the street from InOrbit Mall, both developed by the Rahejas), between the shopping centres and the traditional high street, and between large format stores and speciality malls.

For the most part shopping centre development in India in the recent years has been seen as an aspiration to be fulfilled – hence, the most important factors have been the size of the shopping centre, quality of fixtures, marquee tenants who can provide the glamour or the legitimacy). The focus has been more on the “positioning”.

The business will begin maturing and will begin taking developmental leaps forward when centres are seen as commercial infrastructure to be planned with the end-consumer in mind, and to be serviced over a certain lifetime.

Until then, we can look forward to announcements of many hundreds of shopping centres, the launch of a few hundred, and the conversion of many of those into uses other than as shopping centres within a few months or years of their launch. And for investors also it might be a game of Roulette rather than Patience.