S. Rao, Catalyst (The Hindu Businessline)
9 October 2014
Amma, can we whatsapp the photo to Pramod in Dubai?
asks the youngster excitedly, after his mum has taken a picture
of him in front of a towering grey-and-yellow model of a Transformer.
She nods, and he grins happily, proud that he can show off his
very own bit of high-end retail to a friend in the Gulf. Its
this spirit that seems to imbue the hordes of shoppers and visitors
to Kochis retail mecca LuLu Mall.
Opened just over a year ago, the complex covers a sprawling 17
acres near an intersection of three highways and houses over 215
retail luxury and lifestyle brands, including those in the food
court and entertainment areas, with more waiting to set up shop
in the 25 lakh sq ft of leasable space.
Owned and managed by the EMKE group, the LuLu retail chain has
had a strong presence for over two decades across West Asia, with
over 90 malls and 110 hypermarkets in 34 countries, including
Dubai, Abu Dhabi, Doha, Bahrain, Kuwait and Saudi Arabia. Setting
up shop in Kochi in early 2013 was a considered decision based
on the recognition that, with rising disposable incomes, shoppers
in the region had more cash in hand, not to mention the ennui
that had set in with the sameness of merchandise on offer at all
the glitzy retail spaces nearby.
Typically, malls need to target the population within a few
kilometres radius. However, due to the large square footage,
a mall such as Lulu needs to build its brand as a destination
catering to a highly mixed profile of customers, says Devangshu
Dutta, Chief Executive at consulting firm Third Eyesight. A
destination malls viability depends on a large enough pool
of customers with a high discretionary income and a positive spending
outlook, as well as infrastructure that supports ease of travel
to the mall. Economic conditions in recent years have been conducive
to large shopping-entertainment developments like the Lulu Mall,
On a humid Sunday afternoon, the enormous and cool interiors
draw swathes of visitors, generations of families out to shop
or just to have a good time for instance, among the many
wonders at the packed Sparkys fun and games zone. This is
a fantasy land of golden roundabouts, bump-a-cars, a 5,000-sq
ft ice-skating rink and a 12-lane bowling alley, as well as a
But this is Kerala, and any mall here would have to be different
in one key respect jewellery stores. There are about half
a dozen of them in the mall, traditional old-world stores jostling
for attention with others offering trendy, offbeat designs.
At 4 pm, they are already full of shoppers. Theres an NRI
family buying wedding jewellery at Bhimas, while a group
of chic Kochi ladies is inspecting a new line of gold-and-silver
necklaces at Avatar Diamonds.
The 25-year-old Avatar brand has branches across the State and
abroad. There is a big spike in sales to locals during the wedding
season, a salesperson says, but over the next few months, the
main shoppers will be NRIs visiting for the holidays. There are
customers from Bahrain and Saudi, for whom the brand has created
Across the corridor are designer Western wear outlets. Business
is good, especially during vacation time, say the store managers
at Vero Moda and Jack & Jones, while the manager at high-end
leather goods store Calonge says discerning clientele seek out
its trademark braided leather products. Everyones on the
lookout for promotions and offers, though, and there are plenty
LuLu Celebrate, the malls three-storeyed flagship store,
specialises in bridal wear but also offers a wide variety of sarees
and salwar sets. If luxury is in focus, quality and affordability
are also important, says Ajmal, a floor manager at Celebrate.
This is why the shop is so popular with people from Kochi and
nearby. Looking to pick out a traditional Kerala saree for a friend,
I find the offerings range from the simplest mundu with a plain-coloured
border for less than ?500 to a beautiful cream-and-gold designer
affair for about ten times that.
Nearing 6 pm, the crowds are so thick that there are small queues
near the escalators though there are 18 of them! Shoppers
can take breaks at the many facilities on offer. There are water
fountains, baby-rooms, rest-rooms, ATMs, even a bank that is open
365 days from 10 am to 11 pm. Prayer rooms, first-aid and ambulance
services are on offer too. A 300-room JW Marriot hotel is located
within the complex, and PVR Cinemas runs a busy multiplex.
The most crowded part, though, is the 2-lakh sq ft LuLu Hypermarket,
Indias largest. If we thought getting into the mall was
difficult (car lines were three abreast and about 300-m long),
this would be even more challenging, with a surging wave of people
trying to get in. Queues at each of the 27 check-out counters
were about 10-people-deep each, forcing us to reluctantly give
up the idea of sampling its fresh and frozen delicacies and the
diverse cuisine at its hot food counters. There was also no time
to check out the 2,000-seater food court with 22 kitchens, nine
restaurants and many coffee shops. Lulu Mall Kochis Marketing
Manager Aiswarya Babu later says the hypermarket not only stocks
international foods but also believes in sourcing local and encouraging
growers of organic produce.
Brand-aware shopper Madhulika Menezes, who lives in Chennai,
says she spent a brief but interesting time at Lulu Mall some
months ago. All she had time to shop for was some deliciously
flaky and flavourful baklava at the hypermarket, but it gave her
a taste of what to expect. When she goes back, she will allot
at least a day to tour the mall.
Built at an investment of over ?1,600 crore, the mall, which
now has an occupancy of 95 per cent, is operating at a trading
density that is among the top 10 in the country, says Shibu Philips,
Business Head, Lulu Mall, Kochi. As mall developers and their
investors realise, this is a long-haul business where no one expects
to start earning profits before 8-10 years. For a group that has
been operating malls for over 20 years, the primary concern seems
to be to put customer delight on par with the profit angle. One
cannot happen without the other, as it has shrewdly recognised.
About the impact such large malls have on smaller counterparts
in the vicinity, Third Eyesights Dutta says: A destination
mall that comes up within the catchment of other existing malls
certainly reduces the footfall into those malls this impact
is the maximum in the first two years after the launch. However,
smaller competitors can survive and thrive if they differentiate
and focus their offerings to be highly relevant to the local population,
many of whom still frequent smaller malls, the high street and
traditional markets, and visit the larger mall as an occasional
Aiswarya Babu says that, on an average, 60,000 visit on weekdays,
and the number goes up to 95,000 on the weekends.
Given its success, will there be a rush to emulate the Lulu model?
As Dutta says: Successful destination malls do inspire
other developers to consider similar projects. However, the overlap
of high population and high spend, and the ability to consistently
drive footfall, is a difficult combination to create. At this
time, the number of large malls that can be supported is limited.
So, while new destination malls could cannibalise traffic from
the older mall, a lot depends on how well they are planned and
executed, and how Lulu Mall handles itself in the face of such
A vision statement on the Groups web site quoting Managing
Director MA Yusuffali commits to making the world a harmonious
place to live in, in every way possible. If the Groups vision
is to go beyond the merchandising to create a fun and happy space
for families or a hangout for the young, to offer all sections
of society a global experience, as it were, it has certainly achieved
this. Big retail, it seems, is the new equaliser.
(Published in Catalyst
- The Hindu Businessline.)