MALL IDEAS BIG BUSINESS

From gaming to magic shows to fashion events, small players are cashing in on the growing opportunities in mall entertainment

THE prefix of shopping-malls just got swapped with entertainment. While shopping very much remains the staple, entertainment options within malls are increasingly becoming the numero uno draw. Gaming, magic shows and events today account for a considerable pie of mall monies. Industry players estimate the market for mall entertainment at more than Rs 1,000 crore and growing at an average rate of 15%. "By 2010, the number of malls in India is expected to cross the 600-mark and the mall entertainment business is bound to increase at a tremendous pace to attract consumer footfalls," says Sanjay Prabhu, GM, Inorbit Mall, Malad. Now this calls for a wide swathe of players who provide entertainment and event platforms to these malls.
    There are specialists who conduct magic shows, kids' amusement zones and video gaming importers and distributors, as well as providers of bowling alleys. SN International, a Delhi-based company, is into distributing entertainment machines, like Sketch Express, a machine that draws black-and-white and colour photographs of consumers standing in front of the machine.
"Apart from the metros, we are also
present in Shimla, Ranchi, Surat, Indore, and Bhubaneshwar. We are in 43 malls and still growing," says SK Narang, president of SN International.
    Besides, the company provides entertainment equipment, like Salto Trampoline, a product of Maxi Fun, Switzerland, which can make a person jump safely up to 25 feet without any training. And to add screens around malls, it has a tie-up with Photo Play, a product of Funworld AG, Austria, having the largest network of touch screen terminals in the world. The investment in such equipment, though reasonably large, rakes in good revenues. "The investment is around Rs 5 lakh but we do good business, especially on festive occasions," adds Narang. SN International has clocked a turnover of Rs 2 crore for 2007-08.
    On their behalf, mall developers either provide space to such vendors, or tie up with them. "The endeavour to start such a venture is in-house, but the facility is outsourced from a third-party. We provide space for these activities (entertainment), while companies like Amoeba, in our case, throw up gaming options. Malls are getting into such activities in order to become a one-stop-shop for consumers. It is also because nowadays children mostly drive a family's buying decision," claims Mridul Mishra, head marketing at Spice Malls.
    Take the case of the Rs 10 crore Kool Kidz, which ties up with developers to provide amusement material for children. "Presently, we are in 20 malls all over India. Apart from existing collaborations, we have also tied up with Ansals for their upcoming Greater Noida project, Ansal Plaza-II. We would also be in Meerut for the upcoming Melange Mall," says KS Gill, senior manager- corporate marketing, of Kool Kidz.
    "We have toys that require physical activities for children and are not batteryoperated, we also have soft toys as well rock climbing facilities and trampolene that caters to children in the age bracket of 8-14 years," adds Gill. Apart from malls, schools and educational institutions are also separate revenue streams for the company.
    According to a study by Colliers International, the average conversion for shopping accounts for about 20% of the footfalls, while for food and entertainment, it sits higher, at about 40-45%. Malls are increasingly tossing up a holistic experience to draw in footfalls. Earlier, multiplexes were a major draw for people to check out the malls. Over the last year or so, the revenue sharing agreement between exhibitors and mall developers has seen a sea change. Sources indicate that if it was 50:50 in the past, the more demanding exhibitors are now asking for as much as 60:40, or even 70:30 in their favour. So savvy mall owners are carving out their own entertainment options.
    Among them is Mumbai-based Miracle Magic Entertainment Company, which is helping break the clutter, literally by organising magic shows in malls. It also provides artists, mascots, caricature artists and other promotional products. "We are into this business for the last 10 years but it has been just four years that we entered the malls," says Ketan Lotia, CEO, Miracle Magic Entertainment Company. "Initially, we used to cater to companies, individuals and institutions but now with the malls, our business has grown manifold and we are being invited by mall developers as well as the retailers, which keeps us busy all year
    round," adds Lotia.
The firm, which has grown at 10-15% over the past two years to Rs 50 lakhs in revenues, has identified opportunities in the southern states and is on expansion mode.
    Again, take the case of Firstvision, which does bungee-trampolene, soft play centres and redemption games in a number of malls in Delhi. Anuj Matta, director of the company, says that the most feasible model today is the revenue-sharing model. "With mall rentals going through the roof, we are looking at revenue-sharing with developers. In fact, most of the developers are keen to share revenue today as they can earn better if the mall does well," he adds.
    Gagan Singh, head of Sandalwood, which is an integrated retail development and management service provider, and a JV between Jones Lang LaSalle and Colonial First State Property Management, says, "Revenue-sharing is the best way to go forward for both tenants and entertainment companies doing casual leasing of space in malls." Adds Paras Arora, associate director of Colliers International, "To promote shopping, developers today want play areas and newer entertainment options within the malls. This adds to the footfalls for sure." Arora explains that today, malls need to get the mix of retail, food and entertainment and the location right within the malls to be successful. Inorbit Mall in Mumbai, for instance, has facilities like air shooting, simulators, arm wrestling and virtual boxing, apart from a kids' amusement zone like toy train and virtual cricket. The gaming area covering a sprawling 30,000 sq ft, does Rs 30 lakh in turnover, and is managed by Time Zone Entertainment. Sanjay Prabhu, GM at Inorbit says that the mall works on a 7-10% revenue share arrangement with Time Zone.
    Jatin Desai, head-planning and strategy at Spectrum Strategies, says that his company's events attract at least 20-30% extra footfalls into the malls. Spectrum does a lot of events for retailers and mall owners. Recently, it did an Art of Living event at Thakur Mall in Dahisar, Mumbai, and an Ugesh Sarcar magic show for RPG, at another mall. A new event is also being planned in the form of a fashion show involving all brands within a mall. Apart from events, it also undertakes digital advertising within malls, using LCD screens, urinal TFTs and magic mirrors. Spectrum Strategies works with eight malls across Mumbai and is looking at going national too. "We have got offers from malls in Bangalore and Hyderabad but are held back due to lack of trained manpower," says Desai.
    Amoeba, one of the largest brands in the gaming and entertainment space, has 20 outlets across the country, including the metros and Tier-II centres such as Jallandhar and Surat. With about Rs 2 crore as its target investment per store, Amoeba is looking to expand to 100 centres over the next 2-3 years. "We will be adding five more stores within this year," says K Nandkumar, GM at HM Leisure, the holding company for Amoeba.
SHOW STOPPERS
Delhi-based SN International, is into distributing entertainment machines like Sketch Express that do instant people sketches Kool Kidz, ties up with developers to provide amusement material for children in 20 malls all over India Miracle Magic Entertainment organises magic shows, brings in artists and mascots with inputs from Ravi Teja Sharma