India's $300-billion retail industry is gripped by a new concept — discount malls. Top realtors and local retail chains are developing malls in regional boroughs, specifically to sell premium branded goods at prices 30 to 40 per cent cheaper than the maximum retail price (MRP).

At least 50 discount malls are expected to come up in the next two years across the country, positioned in the middle-to-the-premium end of the market.

In what could be one of the largest discount malls, Royal Palms is developing the Orchard Road Mall in the western suburbs of Mumbai, expected to be ready by Diwali this year. The project will have 60 per cent (3 lakh sq ft) of mall space for factory outlets and 40 per cent (1.50 lakh sq ft) for private labels.

Here, top international brands will be 30 per cent to 40 per cent cheaper compared with the prices in premium malls such as High Street Phoenix, Infinity and Atria.

Dilawar Nensey, joint managing director, Royal Palms, says, “Spread across 2 acres of land owned by the Royal Palms in Goregaon, Orchard Road Mall will have branded outlets such as FCUK, Welspun, Provogue, Calvin Klein, Louis Philip, Adidas, Nike and Kouton as anchor tenants”.

“As for private labels, we are planning to source home products from China, Thailand and Italy and sell them at discounted rates through our mall. We are investing Rs 80 crore in our retail venture,” he added

Another player, Akruti Nirman, which is planning to brand its upcoming discount malls in Kanjurmag, Ghatkopar, Mumbai and Thane as ‘Cityworld’, has decided to develop discount malls in tier II and tier III cities — where land will be cheaper — after the next six months. Hemant Shah, chairman, Akruti Nirman says, “We will develop discount malls with an area of 1 to 3 lakh sq ft, compared with 6 lakh sq ft of malls we are developing in the metros. The return on investment through a discount mall will be the same or even more as the positioning and land will cost less.”

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