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Vol. XXXI No. 24, April 1-15, 2022
Much Ado Over Malls
by The Editor
The Hon’ble Chief Minister has just returned from a quick visit to the Middle East. The details of the business deals concluded have since appeared in the Press – Rs. 6,100 crores worth of MOUs have been signed and these cover a wide range of industries – food processing, retail, steel, textile, healthcare and logistics. The news has created quite a buzz around Tamil Nadu, which has been set a target by the present regime to become a trillion dollar economy by 2030.
The excitement needs to however give way to some clear reflection on the composition of the industries that have promised to invest. It is also important to remember that these are MOUs – which are expressions of interest. Not all such promises become reality and with the passage of time, many of these are forgotten. It therefore becomes necessary for the voting public to monitor the progress of such projects very closely.
A Chief Minister of a State of India going abroad to drum up trade does make the news chiefly because it happens rarely even in these liberal times. The big names of the past in Tamil Nadu never stirred out and it was after a long such hiatus that the immediate predecessor to the present CM went on a road show in 2019. When he returned it was with a declaration that the three countries that he visited would be investing a total of Rs 8,830 crores with an employment potential for 37,300 people in the State. Reality after the four years makes for sobering reading. The Middle Eastern leg of the former CM’s tour had netted a total of Rs 3,750 crores worth of MOUs, of which as per The Hindu, only Rs. 450 crores have actually materialised. The others are all doubtful. It is no wonder that the present CM has trashed the MOUs signed by his predecessor as worthy only for making paper boats. But it is important to make sure that the fresh batch of MOUs don’t end up becoming the same.
It is also necessary to consider the composition of the current lot of MOUs. Almost 50 per cent of the total value comprises one deal with a prominent international retailer, whose malls are famous all across the Middle East, and Kerala. While the deal also includes a food-processing unit for export, it is to be assumed that the bulk of the investment will be for putting up malls across the State. Rumours are already rife that the location for one in Coimbatore has been decided while the site for one in Chennai is still up for grabs. A few large parcels of land and landmark properties are being bandied about.
It is the same excitement that prevailed when earlier malls were constructed in various cities and towns in the State. Speculation about the location, tall claims as to how the proposed structure would wipe out old forms of retail, high profile inaugurations, breathless descriptions about the facilities and then the anxious wait for footfalls. That is when reality hits – the crowds come to the food court and the movie theatres. They also like to walk around the corridors to savour the air-conditioning. They hang around the common areas enjoying any free entertainment that is being offered. As for the designer outlets and high-end shops that pay the bulk of the rentals, hardly anybody steps in. Time and again this pattern has played itself out. The older malls rapidly fall by the wayside even as newer ones come up and corner all the crowds – that is until the next mall comes up.
The Indian consumer has proved to be a very different breed when it comes to retail and the shopkeeper by the side of the street may still have the last laugh. In the light of this, the promise of a new mall may not be all that much of news after all. We however wish it all success.
