New Delhi: At least half a dozen factory outlet malls are being planned in India, like in the US and UK, as developers of retail facilities attempt to fight ecommerce rivals in a market increasingly driven by deep discounting.
While such retail space, where brands are offered on discount round the year, is popular globally, the segment is unorganised in India.
“We have opened one such mall in Delhi’s Jasola where all the premium brands have their factory outlets. Some brands have opened their first such store in the country. It is still an early stage, but the concept is expected to gain popularity,” said Abhishek Bansal, managing director of Pacific Malls.
The mall houses brands such as The Collective, The Tank, Tommy Hilfiger, Calvin Klein, Lacoste, Skechers, Adidas and Birkenstock at discounted prices. The company intends to explore more such options.
Factory outlets for premium brands were not getting the right kind of development in India which has now opened up with these premium outlet malls coming up. These malls will have the right environment including food and beverages and movies making shopping a total experience, said Lacoste India managing director and CEO Rajesh Jain. “Till now, most factory outlets were located in high street locations which was a hassle for consumers for parking. Our store in the Jasola mall has exceeded our expectation,” he added.
Industry experts said similar retail spaces are planned in Coimbatore, Bengaluru, Guwahati and Punjab as well.
“Retail will not be limited to mall and high street, but move to highways with more infrastructure being built. On highways, factory outlets mall along with F&B and recreational makes sense. In coming years, this is going to be a popular concept,” said Susil S Dungarwal, founder of Beyond Squarefeet, a shopping mall specialist company.
A mall developer in Erode near Coimbatore has planned over 300,000 sq ft of value mall, which will house factory outlets of brands.
“It is part of 1.8 million development and the idea is to create a destination for value shoppers. People want to upgrade and at the same time look for items at a discounted price,” said P Raajashekar, managing director of Texvalley, developer of the Erode mall.
However, for mall developers, a major challenge is deciding the rent, as the revenue from factory outlets is expected to be low because of heavy discounting.
The top seven Indian cities will add nearly 11 million square feet of mall space, or the size of over 145 football fields, in 2023, the highest ever as developers rush to deliver new malls after a hiatus during the pandemic, according to a report from consultancy firm Anarock Retail.
However, most of these are planned as retail destinations and not many are ready to experiment with factory outlets yet.
“Though the spending power in Punjab is better than any other tier-2 cities, a concept of factory outlet destination will boost the overall retail. We have combined it with the F&B and adventure zone so that it can cater to all the age category,” said GS WAHI of GSW infra, which is developing a mall in Punjab’s Ludhiana to house factory outlets.
By 2026, Indian cities – Bengaluru, Chennai, Hyderabad, Kolkata, the Mumbai Metropolitan Region, National Capital Region and Pune – will add 25 million sq ft of space to the existing stock of 51 million sq ft. Physical retail continues to gain prominence among Indian shoppers even as online retail continues to grow.