A few friends of mine have requested me to comment on stocks. Now technically I have no interest in stocks, but I do find it interesting to analyze the underlying business. Anyways, stocks are part ownership of businesses. Plus analyzing businesses gives me the opportunity to analyze private businesses as well. Now for the disclaimers, I might have made mistakes on my analysis and I would be glad if people could spot them out. But remember, just spotting it out won’t do. You must also carry it forward and show how the entire analysis and the end result changes through your observation. Further, I am not here to spurt out textbook stuff to you. I will explain things how I see it. So don’t be surprised if you get some shocking results at times.

Today, I will analyze the ‘Mall Phenomenon’ – why some malls do better than others. For starters I will analyze Atria Mall in Worli, Mumbai. The mall is in troubled time compared to other malls in the city. A few shops have shut down as well. I visited the mall for 15 minutes yesterday and I made the following observations:

1. The Mall is made up of all niche and luxurious brands i.e. it has been made for the rich
2. 75% of the shops are related to women’s clothing, fashion accessories and shoes
3. There are just 2-3 shops for children’s stuff
4. The remaining are shops for electronics and men’s clothing and accessories
5. There is no movie screening halls there
6. There is no place made for children to play
7. The mall is made in such a way that it maximizes the area for the number of shops
8. It’s one of the few malls in the city that actually charge for parking

So, what does this tell you? First, it’s clear that they want only the rich or the ultra rich. It’s almost impossible to go to a shop and come out with a bill of less that Rs. 5,000. This automatically reduces your market to sell the goods. There are no movie screens and no hang out place which means you also eliminate college groups. Men generally don’t like to shop much. Plus men don’t like paying too much for their clothes. Thus you have narrowed your market even further. All this leaves you with is rich women, daughters with rich parents and obviously rich families as a whole.

But there’s a catch here. In Mumbai, it is the current generation of parents that have made the money. Hence most of these “rich families” or “rich men” are married and have kids. When such families go out for shopping they would any day prefer a place where their kids can enjoy too. When you enter Atria mall, you can immediately say that it’s the most unfriendly place to kids. Kids will start getting irritated because there is nothing interesting for them there. Parents are not that addicted to shopping that they will go out Atria to buy expensive stuff and make their kids suffer. They will not mind going to a place like Phoenix Mills where your stuff is probably of a little lesser quality but your kids can have a ball of a time at McDonalds.

So, now that we have eliminated most of your families. All you are left with is rich girls/women as your potential market at Atria. Now 75% shops are for women. That means she has a huge variety. And due to that each shop losses its unique selling point. Thus the average turnover of the shops will reduce and most shops will struggle to remain profitable.

All this analysis was done in a 15 minute walk in the mall. It’s amazing how you can find so much information in such a short span of time when you pay attention to your surroundings.