A PROJECT REPORT ON KHAN MARKET, NEW DELHI
TABLE OF CONTENTS
1. Introduction 2. Acknowledgement 3. Types of retail Locations 3.1. CBD 3.2. Shopping Center 4. A brief on Khan Abdul Ghaffar Khan 5. Khan Market: An Overview 6. Tenant Mix 7. Merchandize, Price & Display 8. Market Location For Khan Market 9. Annexure
INTRODUCTION Khan Market is a very well-known place not only in India but in the world as well. It has many striking features associated with it that makes it score over other markets in Delhi like CP or GK market.
This project not only throws light on features like tenant mix, merchandize, price, display & market location classification of Khan Market, but goes a step ahead by discussing the different kinds of market location classification that is practiced in the retail world. Market location or site selection plays one of the most important roles when a retailer is planning to enter the brick-mortar format of retailing. It is one of those decisions that if gone wrong, may cost the retailer a substantial amount of money. It is so difficult to reverse the decisions that go bad. Even in terms of rentals, it costs the retailer around 20-30% of his total operating costs. So whether the retailer is looking to buy a property or rent it out for his venture, he must take into consideration the viability of such projects. It is for this reason only that the retailers expand their businesses through the franchisee model. However, it does not mean that the retailer should back out of any such location that has exorbitant rates. Take the case of Khan Market in New Delhi. This particular market has the highest rentals & property rates in the whole of India. Even worldwide, it was ranked as the 16th most costliest retail location by global real estate consultancy firm Cushman & Wakefield in 2007. However, the business is so good here that even such high rates do not deter the retailers from opening a shop here. A retailer identifies locations according to the image of his brand. Depending upon the image, he may choose a high street, city center, mall or a neighborhood location, among others. Besides, the catchment area & the customer profile in & around the area is another important factor that is given a lot of weightage. Further, a retail location may not forever remain relevant to a brand or retailer. Over a period of time the profile of such location may undergo a change. Sometimes the development work carried out by the Governments of states proves to be one such factor. Case in point MG Road, Delhi. Here, due to the ceiling drive carried out by the Delhi government in the early 2007 led to the demolition of many showrooms, either partially or completely. Sometimes, a flyover comes up right in front of the showroom. Thus, creating unwanted blockage in front of the store. Sometimes, even the competition makes a retail location irrelevant. So, the best strategy is to keep an eye on the factors mentioned above, besides many more, in order that the retail location continues to be a viable & thriving business venture for the retailer.
ACKNOWLEDGEMENT We all group members take this opportunity to thank our faculty Mr. Shankar Sahay for his effort in making us develop useful insights that govern the dynamics of site selection for any brand. He made it a point that we benefit from his vast knowledge on the subject that he had acquired from his association with the retail industry for more than a decade.
We also thank Mr. Manish Chawla, who gave a guest lecture in our institute on the same topic, from TITAN for increasing our knowledgebase & developing a practical approach in us about the application of the concepts that we studied in our classes. Last but not the least, we express our gratitude to all those customers, shopkeepers & sales staff that helped us develop an understanding of the Khan Market. They were the source of first hand information, who has watched all the actions unfold at the Khan Market for many years.
TYPES OF RETAIL LOCATIONS Basically there are two types of retail locations. These are further divided into sub parts. (1) CBD or Central Business District: Includes the high street or down town area of the city. (2) Shopping Centre: It has the following sub classification
Shopping Centre
Strip Centre
Shopping Malls
(1) Neighborhood Centre
(1) Regional Center
(2) Community Center
(2) Super Regional Center
(3) Power Center
(3) Fashion Center
(4) Theme Center
(5) Outlet Center
CBD It is a traditional down town business area in a city or a town. Due to business activity, it draws people in the area. People usually visit the area for work. It is a hub for public transportation. It has a high level of pedestrian traffic. Successful CBDs have a large number of residences living in & around the area. Also, there is a presence EBOs, also known as Exclusive Brand Outlets, of the national & international brands. The people who are fond of latest fashion trends usually throng this kind of place. From the retailer’s point of view, this area has the following disadvantages… • • • • •
High real estate cost Higher security required to avoid shoplifting Parking problems Lack of planning Sub urban shoppers may get discouraged over period of time.
Shopping Centre
It is a group of retail & other commercial establishments that is planned, developed, owned & managed as a single property. It has two main classifications, namely, shopping malls &
strip centers. Strip centers They have parking in front of the store. They do not have enclosed walkways linking the stores. They have the following advantages… • • • • •
Convenient location Easy parking Low real estate rates Less time consuming for shoppers Sometimes low prices for the customers
Three types of Strip Centers Neighborhood Centers: They provide convenience shopping for day-to-day needs of the consumer in the immediate neighborhood. It is anchored by a grocery store or a chemist store & supported by stores offering food, miscellaneous products & a variety of personal services like dry cleaning, tailoring, haircutting, etc.
Community Centers: They offer wider range of apparels & other soft goods then a neighborhood center. The common anchors are grocery store, chemist shop, discount departmental stores supported by apparels, furnishings, toys, home improvements, shoes, electronics, sports goods, etc. it has the highest range of formats in strip shopping centers.
Power Centers: They are dominated by several large anchors including discount departmental stores, off-price stores, w/h clubs or category killers. They include several free standing anchors & a minimum number of small specialty tenants.
Shopping malls They have pedestrian focus. Customers park their vehicles in outlined areas & walk to the stores. However, in India, mostly the parking facility is in the basement of the shopping malls in order to save space. They have the following advantages…
• • •
It is one stop shopping, food, entertainment, outing, socializing, hanging out, etc. Tenant mix can be well planned & balanced. External environment taken care of by factors like Common Area Maintenance (CAM), external signage, etc.
These have their own dark side as well. The disadvantages can be summed as under: • • •
Higher rents Tenants may dislike the control of mall management May lead to tuff competition within the shopping mall.
Types of Shopping Malls Regional Centers: They provide general merchandize, mainly apparel & services in full depth & variety. The main anchors are traditional mass merchant, discount departments stores or fashion specialty stores. The stores are connected by common walkways. Parking is in surrounding areas outside the perimeter or basement.
Super Regional Centers: They are of larger size than regional centers. There are more number of anchors & deeper selection of merchandize. It draws from a larger population base. It is an enclosed mall frequently with multi levels.
Fashion/Specialty Center: These are composed of upscale apparel shop, boutiques & gift shops. They carry selected fashion or unique merchandize of high quality & price. They have sophisticated design emphasizing rich décor & high quality landscaping. These are mostly found in trade areas high income levels, tourism areas or some CBD. Also, they have large catchment areas due to specialty nature of retailers & their products.
Theme Center: They have a unifying theme carried out by individual shops, architectural design & merchandize. They mainly appeal to tourists. The tenants are similar to specialty centers except usually no large specialty store or departmental store. These are anchored by restraints or entertainment. Generally, they replicate a historical place or create a unique shopping environment.
Outlet Center: It consists mostly of manufacture’s outlet stores selling their own brands at a discount. Many a times they have a strip configuration like the power centers. Located at some distance from the regional centers. They can also be located in strong tourist areas. Beside the above mentioned retail locations, there are others which are relatively much smaller. They are… • • • • • •
Free Standing Units Cart Kiosks Retail Merchandizing Unit (RMU) Tall Wall Unit (TWU) Mixed Use Development (MXD)
A BRIEF ON KHAN ABDUL GHAFFAR KHAN Khan Market is named after Khan Abdul Ghaffar Khan. Besides this, there is another market in Karol Bagh, Delhi, that is named after him & is known as Ghaffar Market. Khan Abdul Gaffar Khan, more than anything else, was a man of God who believed in service to the humanity as service to God. Any religion that provoked conflict and fomented hatred, divided people and destroyed the unity of mankind, Gaffar Khan condemned as not true religion. Gandhiji was struck by Gaffar Khan's transparent sincerity, frankness and utmost simplicity. He was, in his view, a true Khudai Khidmatgar, Servant of God. He struck to the three prime ideals of life-amal, yakeen, muhabbhat--right conduct, faith and love Born in the North-west Frontier Province in 1890, Khan Abdul Gaffar Khan missed the opportunity of going abroad for studies because his mother would not let him go. He started a number of national schools, so that the sturdy Pathans could first educate themselves. He organized the Pathans as the Khudai Khidmatgars-Servant of God-with brownish (or red) uniforms--they were called the Red Shirts. Gaffar Khan attended the Karachi Congress of 1931. He was arrested along with his elder brother, Dr. Khan Saheb in 1931 and jailed in the Hazaribagh jail of Bihar. Gaffar Khan was a member of the Congress Working Committee (CWC). When the CWC adopted the Mountbatten Plan for the division of India, Gaffar Khan was the saddest man among his compatriots. He spent the major part of the rest of his life in Pakistan jails. He attended the Congress Centenary session in Bombay in 1985. He was honored with the Award of Bharat Ratna in 1987. He passed away
on January 20, 1988. He was a lifelong pacifist and a devout Muslim. He was known as Badshah Khan (sometimes written as Bacha Khan), the King of Chiefs, and Frontier Gandhi.
KHAN MARKET: AN OVERVIEW Khan Market Address: Location- South Delhi India Pin Code 110020 At the time of partition, the land was given to the refugees from Pakistan, who came over to India, for business purpose. Since then, it has grown like anything. So, the market is about 60 years old. It is such a hot business destination that the owners have freezed the sale of property in the market. The people who own shops here, are renting them out as it fetches them exorbitant rates. The rates are as high as INR. 950 per square feet. The global real estate firm Cushmann & Wakefield in 2007, gave the 16th rank to this market in terms of world’s hottest retail destination. It jumped eight places from rank 24th in 2006 to rank 16th in 2007. It is the costiliest place in India surpassing the markets like CP,GK, South Ex in Delhi and Mumbai's Linking Road, Kemps Corner and Colaba Causeway. It is ahead of Tverskaya in Moscow and Wanfujing in Beijing. The reason that is forwarded for the high real estate rates in this market is the non-availability of extra space. It is situated in south Delhi, close to the Lodhi Garden. The areas around it are home to a lot of diplomats & expatriates. The bureaucrats who work with the central government also live in great number around this market. A lot of foreigners also throng the market. Also, in proximity are the India International Centre, the India Habitat Centre, offices of the World Wide Fund for Nature, and other organizations. It is the most upscale place to shop in New Delhi. The Khan Market is a U shaped market that has another nested U within its arms and a few straying bits of buildings that distort the pure shape. The parking is done in front of the shops only. As far as the security is concerned, there were several policemen & policewomen deployed at various points in the market. The market remains closed on Monday.
TENANT MIX Khan Market - much used by the expat and diplomatic community. It has excellent book shops, upmarket clothing, a good dental practice, opticians, grocers, photographers, tailors, computer
shops, and a couple of upmarket household furnishing stores. There is also a liquor shop selling imported beer, spirits and wine.
APPARELS Manzoni Atelier Levi’s Fab India Tommy Hillfiger Bizzare Color Plus Giovani UCB Anokhi Park Avenue woman
FOOTWEAR Reebok Nike Adidas Woodland Atlier Puma Finesse Converse Shoe Tree
Bloom
Books & stationery Fakirchand & Sons New Janta Book Depot Narula’s Boutique Full circle
Cosmetics & Saloon Shahnaz Hussain Javed Habib’s Looks Unisex Saloon The Body Shop
RESTRAUNTS Chonas Subway Side Wok Amici China Fare
CAFES Barista Cafe turtle Market Cafe Fab Café CCD
Ginger Moon Big Chill McDonalds Blanco Alfina Kitchen Khan Chacha Ke Kabab
Café Terrace
Designer showrooms Ranna Gill Kavita Bhartia
Others Electonics Jewellery Pet shops Chemists Gift Shops & Street Accessories Dry Cleaners Tailors Hardware & Car accessories ATMs Hidesign Opticians Good Earth
MERCHANDIZE,PRICE & DISPLAY The merchandize in the market is to the taste of its customer base. As is clear from the store list in the earlier part, the market is an excellent place to eat out. Great place to shop for the women folk. Car enthusiasts too can deck-up their cars from the many shops that existin this market. Many shops for the accessories like goggles, handbags, foot wears. One can pick trendy kitchen wares & other household items like furnishing, etc. One can find imported stuff in this market. As far as food is concerned, it is a great place to eat out. It is known for its Italian cuisine. The shopkeepers aim to provide the customers with all the relevant things needed in day-to-day life. The price of the merchandize is on the higher side. The branded goods can be bought at the same rate as elsewhere. However, the non-branded items like furnishings & other household items are relatively more costly. Even the not-so-well known apparel shops for ladies have a merchandize
that costs at least one thousand rupees for one garment. The shops dealing in car accessories can modify your vehicle like anything, although at a great amount that you would have to shell out. The display of the merchandize in the showrooms operated by the organized players in retail sector had a very impressive touch about it. They matched the standards that they have in other stores elsewhere. The visual merchandizing was at its very best in all such stores. Even the notso-well known stores were spot on in terms of store display. Case in point ladies apparel store Bloom. The players from the unorganized sector for the merchandize like home furnishing were as good in display as the organized players.Case in point Good Earth. However, some shops like Allied Stores, a toy shop, gave the sense of clutteredness & overly stocked with products.
MARKET LOCATION FOR KHAN MARKET After analyzing the market, we classified it into the category of COMMUNITY CENTER. The place has a wider range of store formats. There are chemist shops, apparel stores, footwear, furnishing, toys, home improvements, etc. The parking is also in front of the shops only. Quite a lot of planning has also gone in developing this market. It is enclosed by a boundary wall & has distinct entry & exit points with gates. The place bears a close resemblance to a CBD. However it is different from a CBD on some accounts. A CBD has a haphazard development where as this place has been developed with some planning, which of course is not of the same level as those of malls. A CBD is dominated by national & international brands. This place does have such brands, but they are too few in number. Most of the shops here have been like family business, son taking over the business from his father. SO WE CONCLUDE THAT THE KHAN MARKET IS A COMMUNITY CENTER.
ANNEXURE
SIGNAGE
KHAN ABDUL GHAFFAR KHAN
LOOKS SALOON KHAN CHACHA KE KABAB
SECURITY PERSONNEL
SHOWROOMS
