Agra malls may find the going getting tough

Tourists prefer shops in lanes and bylanes, says study

It is as if the construction firms have spotted a golden vein in Agra. This "gold rush" in the real estate firms to build metro-class shopping malls in this C-class city has resulted in the launching of at least 10 shopping malls in Agra in the past few months but already, economists have begun doubting the success of the mall culture in small towns.

A market research in Agra conducted recently pointed out that though the shopping malls were being seen with somewhat curiosity by the local residents, the concept being new, the general perception was that when the retail malls were finding it tough to survive in cities like Gurgaon and Noida, which are adjacent to the national capital, it would be far more difficult for them to even manage the daily operational expenses in Agra with a population of just 1.5 million, though the "themed malls" could hope for a better response.

Ashok Dixit, finance analyst and managing director of A K Dixit & Associates, a finance consultancy firm of Agra, said a major part of this town comprised traditional markets or "mandis", selling almost all consumer goods available in the country, be they hi-tech electronics, furniture, or branded clothes, all sold in specialised market lanes, mostly named after a particular trade, like iron goods sold in "Loha Mandi".

He said the company had conducted a market research in Agra recently in order to assess the market response to the entry of shopping malls in Agra.

This research had indicated the shopping experience of the Agra residents was concentrated around the specialised markets of the town and they preferred to buy even branded clothes from these market lanes instead of opting for exclusive showrooms, of which, Agra already had too many.

Similarly, he said, the price factor of multiplex cinema tickets was going to be a major deterrent for the families of Agra seeking entertainment on the small screen.

In a city where the most expensive cinema hall charges Rs 60 for a balcony ticket, there will not be many takers for the Rs 120 tickets of multiplexes even if they offer better services because the largely middle-class consumer of Agra was more conscious of the price he had to pay against the quality of service (QoS), which was the main USP of these malls.

He said another factor that might have attracted the shopping malls to Agra could be the huge inflow of tourists, domestic and foreign, but even the foreign tourists, with their strong buying potential, were more interested in visiting the traditional markets of Agra in order to experience the essence of Indian culture, instead of shopping malls, which was a concept imported from their own countries.

According to Dixit, the tourists arriving in Agra would purchase mostly local handicrafts, shoes, rugs, and "petha"Most of them come via Delhi, where they purchase the articles they need daily.

He said it was most probable that the construction firms were dabbling in the shopping mall business in Agra without conducting adequate market research because if the "themed malls" were set aside, the retail malls had no future in small towns like Agra unless they offered better services at even better prices than the Agra mandis.

Besides, he said most of the shopping mall projects in Agra were located several kilometres away from the main markets.

At least two mega-mall projects were under way near the Taj Mahal, which were almost 3 km away from any residential settlement, a fact that did not slip the eyes of McDonald's, which has chosen a shopping mall located in Sadar Bazar, which the promoters claim is the only "posh" market place of Agra.

In all, he said, the shopping malls could help in developing the city's image bringing it on a par with the metros, but economically, shopping malls were in for slow business in Agra.