World Market, which will allow wholesalers to own shop space of 200-500 sqft in an air-conditioned mall, is being positioned as an expansion option for wholesalers housed in traditional markets that are often overcrowded, inaccessible and where they run the risk of not holding legitimate title deeds.
“Our aim is to create a modern and a non-intimidating environment for the wholesale segment with a quintessential Indian lilt to it,” Sumit Dabriwala, managing director of the Group’s real estate arm Future Market Networks, says.
“Real estate developers have built infrastructure only for organized retail so far,” he says. Wholesalers are crucial in the distribution chain as they buy merchandise in bulk from manufacturers to sell it to retailers in smaller quantities.
At 10-lakh sqft across 10 acres of land, World Market in Bangalore’s Old Madras Road will have around 10 designated zones for categories such as fashion accessories, electronics, crockery, plastic, hardware, leather and stationery.
The company plans to expand World Markets to Kolkata, Ahmedabad and the national capital region and may use land parcels owned by the company for this purpose. In Mumbai, it is experimenting with a similar model at Future Group-owned The Orchid City Centre Mall, which will be rebranded, Dabriwala says.
Dabriwala, a realtor in his own right, merged his real estate interests into the company in 2011. Future Market Networks, which was hived off from Pantaloon Retail in 2010, is setting up logistics parks with IL&FS and owns majority stake in mall development company Star Centres.
The company had inked a 70:30 joint venture with Fung Properties, the private investment arm of the promoters of Hong Kong-headquartered supply chain management company Li & Fung.
This joint-venture company, Future Trade Markets, in turn, has entered into an equal joint venture with Sattva Group, which is developing the real estate for the first mall. The partners have together invested Rs 70 crore in the project so far.
It will also set up food and beverage facilities and overnight accommodation for retailers travelling from suburban locations to strike deals with wholesalers. Analysts say wholesaler interest in the mall would depend on the cost of such services.
“In large cities, traditional wholesale markets are very active. For retailers to come to the mall, the concept would be heavily dependent on how different these wholesaler’s product portfolio is,” Debashish Mukherjee, partner at management consultancy AT Kearney, says, referring to how multinational cash-and-carry chains are faring much better in smaller ciites as they fill a need gap there.