Small city, big battle

Big Bazaar sales remain unaffected amid slowdown. Reebok too observes zooming revenue figures. High profile Westside is all set to mark its presence. Metro-centric entertainment chain PVR is ready to compete with Inox. With just one operational mall to be followed by four more soon, this sugar bowl of India is claimed as one of the most promising retail destinations. 

Spread over an area of 108.66 square kilometre accommodating about 758,181 people (ICMR Estimation, 2008, based on NRS Data, 2006) with a population density of 6,166 persons per square kilometer (Census, 2001), the capital city of newly formed state Chhattisgarh, is Raipur. Raipur is proving its critics wrong who categorised it among the laggard cities. With the city’s primary commercial occupation being agriculture and mining, this rice bowl of India is capable of fulfilling high promises for the staggering growth of the retail industry.

Raipur is the hub of activity with an existing mall City Mall 36 . The mall by City Mall Developers spreads across an area of 50,000 square feet. Talking about the success of City Mall 36, Sanjay Gupta, managing director, City Mall Developers, says, “To facilitate the success of the project we focus on varied tenant mix i.e. we look forward to maintain a good tenant mix to ensure maximum spend by consumers and leave no other option for the visitor to feel deprived of their needs and go some place else. We also have good parking facility for 600 cars in open area, 200 cars in basement and parking for 1000 two wheelers. Apart from that, we are fortunate enough to get the Raipur City Bus facility service with a proper bus stop in front of the mall entrance providing economical conveyance to the general public.”

Retail Experience

The only mall currently operational in Raipur currently is City Mall 36 which has vertical length up to the fourth floor. Some of the brands present in the mall include Big Bazaar, Reebok, Biba Apparels, Globus, Color Plus, Adidas, Provogue, Levis, John Player, INOX multiplex, Moti Mahal and Music World. While talking to the heads of few of these brands, IndiaRetailing discovered that the brands are faring well above their expectations. 

Rajan Malhotra, president, retail strategy, Future Group says, “Our store is reasonably doing well in Raipur. But we prefer to be more in the centre of the city rather than in the suburbs. No regret, the store is doing reasonably well.” 

“We have now 110 Big Bazaar stores and we are doing well in all the locations. The maximum consumption is happening in tier I and II cities only. In tier III cities, consumption rate is still low. Having said that I must also say that the slowdown impact is very less in tier III cities and thus the stores are performing at constant levels,” he added.

“We have started Big Bazaar chain with three stores in different towns that include Bengaluru, Hyderabad and Kolkata (the then Calcutta). We had experimented with three different properties. The first one in Hyderabad was an old market property, which had gone down over a period of time; the Kolkata was an out of town property, it was a highway model and we wanted to check whether the model/concept works. The third one was in Bengaluru and at that point in time it was a new catchment where there was no market at all. We wanted to check whether we can open in a place where there is no market and develop a market out of that. We had three different strategies and we found that over a period of time (7-8 years), the dynamics of all these locations have changed and our market grew out of no where.”

“Basically we look for three core things: where it is, the catchment potential and the size before opening our stores in any particular locality. We look at city wise trends as well,” he added.

On the plans of expansion in Raipur, Malhotra commented, “We won’t open a store in any of the three malls being developed in the adjoining areas of Raipur. We have one market city property coming up in the heart of the town and we will open our store there. "

Sanjay Bindra, director, Biba Apparels says, “In terms of performance, the sales figures in Raipur are very decent.”

On the same lines, Subhinder Singh, managing director, Reebok India, talks broadly on the strengths of tier II and III cities. “Overall our experience is good in small cities. In smaller towns customers are pretty prone to trying out new products. They aspire to get a better lifestyle. It’s a great opportunity to cater their demands.” 

“In tier I, normally we have very big stores and the number of stores is also large. In Delhi itself, we have over 100 stores but in Raipur, we have only one store. In terms of the number of stores it is higher in tier I, but in terms of the performance of stores, even in tier II it is very good,” he added.

About the expansion, Singh disclosed, “We are definitely planning for expansions in small cities, but about Raipur, I am not sure whether we have any store in the pipeline or not for the city.”

Upcoming Malls

Raipur is all set to witness the advent of three other malls soon. While Magnetto mall will start operations this June, City Centre cum Multiplex (RDA Mall) is under construction. Treasure Island is another mall that has also been announced and will be built on the Eastern fringe of the city along GE Road. 

Anand Singhania, managing director, Avinash Developers, which is developing the Magnetto Mall in the city, says, “State capital city Raipur is truly loaded with myriad opportunities as it is in nascent stage of development of real estate and retail. The city embodies a tremendous economic potential with an imaginary annual growth of 20 per cent and the city is fully taking shape as one of the most prominent industrial and commercial hub of central India. It is also showcasing mammoth number of steel rolling mills, sponge iron plants, steel plants and other agro industries. The capital city enjoys surplus electricity, drinking water and paramount connectivity with all metros and big cities with road, rail and air.” 

Transport

Raipur being the capital of Chhattisgarh state has a four lane road to the nearby city Bhilai, which is planned to further extend to Durg city. The Chhattisgarh government also plans to develop another four lane road till Bilaspur city. As far as location of City Mall 36 is concerned the main road of Raipur City coming towards the mall has been widened and reconstructed under the project named as Gaurav Path, which is going to provide good transport. Further, Raipur municipal corporation is also planning to put on the roads the highly mordernised air-conditioned city bus.

Raipur city is situated on the Mumbai-Howrah route of Indian Railways and is well connected with such important places as Mumbai, Kolkata, Delhi, Amritsar, Chennai, Bengaluru and more. Air links to the city connects it with Bhubaneswar, Delhi, Mumbai, Chennai and Nagpur with aviation players including Indian Airlines, Air Deccan, Jet Airways and Kingfisher Airlines. 

Electricity

The fledgling state of Chhattisgarh is fast emerging as the `power house' of the country with energy starved states rushing to its coal pitheads to set up thermal power stations. NTPC already has a 2,100 MW power plant in the Korba region. In the Sipat region, NTPC will have power generation of 1,980 MW in the first phase, while the second phase will witness 1,000 MW. 

A special high- tension line is being laid between Raipur and Rourkela, in the Eastern grid. With its 'Power Hub' strategy, the state will remain power surplus for all times to come. Hence it would be the preferred destination for all power intensive industries. Jindal Steel and Power Limited too has announced an investment of Rs 160 billion for 1,000 MW power generation from its units that are under construction at Tamnar near Raigarh.

Consumers

The total population of the city according to the SEC classification, as per NRS data, is reported to be 731,429. The percentage distributions of household belonging to various SEC categories in the city are: SEC A1: 9.9 per cent, SEC A2: 9.7 per cent, SEC B1: 13.2 per cent and SEC B2: 8.7 per cent.

The population distribution of SEC A and B has been estimated on the basis of NRS data and this has been estimated by taking into account the proportionate distribution of SEC A and B population in the city.

Structures of consumers comprise of local, adjoining urban and village people along with the inter-state consumers like Orissa, east Maharashtra, east Madhya Pradesh, north Andhra Pradesh and south Bihar as Raipur is the nucleus of trade and commerce of above localities and regions since last six decades. According to our estimation, 73 per cent of the customers fall under the business class, while service class and others contributes 17 per cent and 10 per cent respectively,” estimates Singhania.

The existence of a mall in the city has already influenced the consumers' buying behaviour. The survey undertaken by ICMR in Raipur reveals that the people of the city staying in the trade area are generally aware of the malls, both existing and upcoming, along with the shopping complexes and high street shops. The survey reveals that about 81 per cent of the respondent visit malls, shopping complexes and high street shops at least once in a month and this trend was found uniform in all the age groups and SEC covered. About 97 per cent visit malls for shopping other than grocery shopping. The people visit mall generally with the family and spend at least 1-3 hours.

According to Sanjay Gupta whom we have already introduced as the managing director of City Developers, City Mall 36 currently enjoys a footfall of 10,000 during the weekdays and 45,000 footfalls during weekends. 

Security

Raipur is proving its critics wrong who categorise it among the laggard cities. Like metros, the last movie show at INOX in the City Mall 36 ends at 1.30 pm and it runs to full houses consisting of families and couples.

Naya Raipur

Naya Raipur is the upcoming capital of Chhattisgarh being built near Raipur Airport. The new city is about 20 kilometres from Raipur between two national highways -- NH 6 and NH 43, and the new city and the old one are separated by the airport. Naya Raipur covers an area of about 8000 hectares. The urban design of the new city will incorporate the best of international cities as well as traditional Chhattisgarh culture. The design is the grid pattern city plan. One of the major influences of the design was Kuala Lumpur's new capital complex at Putrajaya.

“New capital – Naya Raipur will be a unique and ultramodern city having international grade facilities and infrastructure in all spheres which will make the city ahead of others. All these ingredients will boost the scope of retail of all formats like apparel, entertainment, food, shopping and amusement which will be offbeat and record making in the retail sector,” says Singhania.