Lakshya 2010

Trinity – A Journey to Fun Earth

On the launch day, December 23, 2007, oceans of people crowded inside and outside the
mall on Maitri Road, Jaipur in Rajasthan. It was North Western India‟s first air-conditioned,
family entertainment centre. The shining new mall was truly a marvel, beautiful and grand
with a stylish lobby and filled with national and international brands, a hypermarket – Big
Bazaar – an attractive food court and a multiplex cinema with 5 screens. For the first time,
the people of Jaipur were offered a shopping experience that was available only in the metro
cities of India and in foreign cities. As he looked down at the crowds, Vikram Rathore,
Managing Director of Fun Earth Private Ltd (FEPL) reflected on the long road that brought
him to this day and wondered what lay ahead of him.

The Trinity: An Idea is born

In the late 1990s, Vikram travelled to many metro cities in India as well as abroad to
meet financial institutions and bankers in order to help his family overcome the financial
crisis at Cochran Ltd, a company established by his father P.S.Rathore, an enterprising
and successful business man and managed by his elder brother Suresh Rathore. On
one such trip to Mumbai, he was particularly struck by Blue Mountains, one of the first
shopping malls in the city. He wondered why Jaipur could not have something similar, an
idea strengthened as he visited other malls across the world. He spoke to lot of his
friends and other executives from Jaipur, and found that they were spending their free
time visiting shopping malls while travelling to Mumbai, Delhi and other metro cities in
India. Even while travelling abroad, shopping malls were a major attraction. It became
clear in his mind that the people in Jaipur would definitely welcome a mall, and also he
decided to look further into the project.

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Retail in India

Organized retail in India was new, but was already making financial headlines. The
growing cosmopolitan culture of the metro cities attracted shopping malls and big real
estate developers such as Raheja, DLF and Hiranandani. Some of the first
developments were the Gurgaon Stretch in Delhi, Forum in Bengaluru and Inorbit in
Mumbai. Now, it appeared that the international giant Wal-Mart as well as Indian
companies such as Reliance industries was also exploring retail ventures in India.

It was a different story in cities like Jaipur. The existing retail scenario of Jaipur is
dominated by the unorganized sector. One may call it semi-organized since there were
different markets in the city which specialize in various products. Apart from this, there
were small retailers scattered all over the city.

Jaipur – The Heart of Rajasthan

With a population of about 3 million, Jaipur is considered to be the commercial hub for
soya, steel and yarn industries. The software and financial sectors also have marked
presence in the city. Its prominent medical sector and well known educational institutes
attract large number of population from within and neighboring states. Jaipur generates
60% of the state revenue. The culture of Jaipur can be described as a combination of
traditional and metropolitan. The people are open minded and ready to accept new
things. This is evident from the fact that the local residents welcome any new food joint
or recreation centre or any public facility that comes to Jaipur.

The Mall: Go Ahead Decision

Vikram hired a consultant for feasibility study, since there was no market study available
for the retail sector and specifically for Jaipur, concluded that it was not the right kind of
city for such a mall. Even the big players in the retail industry who had pioneered malls in
Mumbai and Delhi were skeptical about tier II cities.

The early efforts to bring organized retailing were not successful which was consistent
with consultant‟s report. Several complexes built during the early 90s met with failure due
to lack of maintenance and acute parking problems. Such organized retail efforts
resulted in either of these 2 outcomes. One, initial attraction was good but not able to
cope up with prices and Two, it was seen as a barrier for the middle class who perceived
such outlets to be upper-class stores.

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Despite all these, Vikram thought Jaipur was ready for a facility which is truly world class.
He felt he knew the instinct of Jaipur people quite well. It was also his observation that
90% of entertainment for an average Jaipur person came from three sources – watching
movies, eating out and shopping. So, he was confident that if a facility offered these
three options under one roof, and the facility is truly world class, people would definitely
love to come to such a place. Finally, he made up his mind to go ahead with the project
and build a world-class shopping mall and the concept of Trinity – the first shopping mall
in North western India. After much discussion and persuasion, Vikram finally convinced
his family about constructing a shopping mall at Jaipur.

Trinity - Choice of Location

Vikram was aware of the retail mantra – location, location, location! Maitri Road was
considered to be the central thoroughfare of the city. Initially a residential area, it had
become the centre of upper class markets and shopping centres. The road connected
Surya nagar, the elite locality of the city to Gandhi nagar, which was heart of the city. It
was the best location, according to Vikram. He told his father Mr.P.S.Rathore, “I think
Maitri Road is the ideal location for the mall as this road is easily approachable from
every corner of the city. Moreover, the upper middle class and the elite class population
of the city are in vicinity areas like Surya nagar, Gandhi Nagar, etc. But I am not able to
spot an ideal property that can be bought. Most of the properties around here are still
residential and the real estate prices in this area are climbing sharply. It will be quite
difficult for us to arrange for funds to buy a suitable property.” His father, a mature and
progressive businessman, listened intently and said finally, “The place where we are
living is an ideal location for your mall; Maitri Road is bound to become even more
commercial over the next few years. This is no longer a suitable place to live. I was
thinking of selling this house to some real estate developer and buying a new house in a
more peaceful locality. The valuation of this property is around Rs. 30 crores. Why not
use this land to develop the mall? The size is so ideal – the house sits in a land area of
100,000 sqaure feet. Your problem of generating funds for the land will also be solved”.

Planning and Implementation of the project

By March 2004, the Rathore family had agreed to demolish the ancestral house and
construct the mall on the same land. To construct the mall, the status of the land had to
be converted from residential into commercial property by Jaipur Municipal Corporation.
It was a long bureaucratic process requiring state cabinet approval routed through the
Ministry of Urban Welfare. So, FEPL applied for the land conversion in early 2004, and
estimated receiving the approval by September 2004. They planned construction to
begin in December 2004.

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Engineering and Design

Mr.Madhavan Nair, a civil engineer working with Rathore Industries since 1996, was a
man with vast experience in construction. Vikram shared his idea of constructing a mall
with him in August, and invited him to become the CEO of the new organization. The duo
invited concept plans and design ideas from well known architects around the world.
Vikram wanted everything to be world class.

Madhavan‟s past experience was a great asset for such a big project. After having seen
all the concept ideas, he recommended the one proposed by Ranthomb & Associates, a
well-known Indian firm of architects. Madhavan rated them as one of the best architects
for big projects in India. He told Vikram, “They have designed many big hotels including
Oberois, Raj Vilas, Udai Vilas and others throughout the country. Recently, they have
started specializing in designing malls. They designed the Inorbit mall at Mumbai.
Furthermore, no architect from abroad will be able to customize to any of the local
problems faced during construction; their cost will also be very high”. Vikram was
convinced and the company zeroed in on Ranthomb‟s design in December, 2005.

Financing the Mall

Based on previous experiences in construction, the mall project was estimated to cost
around Rs.90 crores. The market price of the land was estimated around Rs.30 crores
which was the promoter‟s contribution. With a lot of struggle Vikram managed to
convince HUDCO, who sanctioned a debt funding of Rs. 53 crores. This still left a gap of
Rs.20 crores that needed to be raised from other sources.

Overcoming Construction Hurdles

December 2003 proved to be a fruitful month for the company. With land conversion
permission coming in, Vikram, to his great satisfaction, had successfully resisted
pressures to define his mall project as a mixed residential-commercial project in order to
expedite the bureaucratic approval process. He was proud that Trinity was set to
become the only legal commercial project on Maitri Road.
After successfully handling the local residents and traffic department who initially
opposed the project due to a possible increased traffic congestion that could be caused
by parking spaces of the mall, in March‟06, the bhoomi pooja was carried out. Cost
saving measures was taken as key measures in each and every aspect of the project
owing to tight funds position.

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Attracting Retailers to the Mall

Abhinandan, childhood friend of Vikram, joined FEPL as its Head of Marketing. He

started visiting various malls in India to see what brands were sold and how they
attracted footfalls. He met consultants and started carving out the marketing strategy for
Trinity very carefully. He started approaching retailers to buy shops space in the planned
mall, but to his surprise, the retailers did not show much interest in buying the shops.
Upon hearing this, Vikram said, “We need to sell the shop space; that is how we can
close the Rs.20 crore gap for construction. Moreover, in Jaipur no retailer would like to
take a shop for rent.” But the mall was not going to succeed with only Jaipur based
retailers. It had to attract large national and international brands. Madhavan suggested a
middle path, “We can plan the mall as a combination of sold space and rented space.
We rent out part of the space to crucial retailers like hypermarket, food joints and
multiplex cinema. This will ensure the footfall in the mall. Rest of the space can be sold
to small, local retailers interested in buying shops. If they closed the deal at the earliest,
some cash would be available for the construction to continue.”

After a lot of struggle in convincing the retailers to commit for taking shops for rent
through various tactics they were able to rent out ground floor and first floor to one of
major hypermarkets in the country; Big Bazaar took the entire basement of 55,000
sq.feet for their hypermarket. PVR, McDonalds and Pizza Hut were the next to follow.
The response was encouraging. This model of giving the space on rent instead of selling
was proving to be a hit because of 2 reasons – One, the retailer got more space for less
investment and Two, the ownership remained with FEPL which would be helpful in
maintaining the mall. The company did not sell a single square inch of space in the entire
600,000 sq. feet of construction. They even bought back the 2-3 shops that they had
sold at the beginning.

Getting Ready for the Launch

In a record time of 18 months, the construction was nearing completion and so was the
booking for space. Vikram‟s wife, Priyanka, who had been a close observer of the entire
project, contributed her ideas regarding the interiors and maintenance of the mall.
Vikram immediately sensed that a female touch would add to the aesthetics of the mall.
So, Priyanka Rathore was made the Head for mall management. With her ideas, Trinity
was able to create the most beautiful and grand lobby at the entrance

The company was struck with a shock when the big hypermarket that had booked space
on ground and first floor backed out. The mall could not be opened until the ground and
first floors were booked as this was the prime space in the mall. After a few sleepless

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nights, Abhinandan convinced Pantaloon, the garment retail chain, and Max, the Dubai
based retail outlet to open their first shop in India. Apart from Max, Trinity also convinced
four more retail test models – Collection I, E zone, F123, Barista lounge – to launch their
stores for the first time in India.

Developing the Management Team

During the early phase of the construction project, Trinity was just a 4 member team –
Vikram, Madhavan, Abhinandan and Priyanka. Most of the other jobs were outsourced.
But now the company needed a big team to manage the mall. Vikram hired consultants
to recruit the best talents. He was willing to pay for the best. He planned to offer a unique
ESOP scheme – a promise to own a house if the employee continued to work for three
consecutive years.

On December 23,2007, Trinity was opened to public. The mall became an instant hit.
People of Jaipur went crazy. For the first one month, the mall was jam packed. There
were traffic jams on Maitri Road as expected by the residents of locality. They were
unhappy about the whole situation and raised a protest against Trinity in the local print
media.

The Road Ahead

It was February 2008, Vikram and his senior colleagues sat together to decide the future
course of the company. They had successfully built the largest mall in North western
India and created an organization with over 100 employees. They also had the financial
results from the first year of mall construction and management. But they had other
options too. Vikram had a plan of expanding the FEPL across various Indian tier II cities
where he expects the same success pattern would follow. In January 2008, within one
month of Trinity‟s inauguration, an investor from Israel had visited Jaipur. Highly
impressed by the world class shopping mall, he immediately offered to buy Trinity for Rs.
160 crores. Vikram and his team were wondering what should be their next steps.

Use the attached excel data sheet (if necessary) which contains balance sheet and
details about Trinity Mall.

Note: Tier II cities include Ludhiana, Chandigarh, Amritsar, Udaipur, Bhopal,

Ujjain, Gwalior, Kanpur, Vadodara, Bhubaneshwar, Raipur.

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Questions that you need to answer:

1. Vikram felt still there are shops which have to be rented and the
team decided to bring in more international brands to the mall.
Suggest Vikram and his team with some suitable strategies to
attract international retail outlets and to retain the existing
retailers.

2. Also prepare a market research plan for other Tier II cities and
indicate how Jaipur’s success story can be replicated. Suggest
Vikram how different the approach would be, for other tier II
cities.

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Rules and Guidelines

 It is mandatory for all the teams to perform registration process on LakshWiz website
(http://lakshwiz.nitie.in).

 The team size should be of maximum 2 people from the same institute.

 A participant cannot be a part of more than one team participating for the same case.
However one can participate in more than one Case.

 The participants are allowed to form different teams for different modules.

 The solution should not exceed 2000 words inclusive of all exhibits and appendices.

 As mentioned earlier, clearly indicate assumptions and support them with suitable
reasons under separate heading.

 Solution format:
 Font Size – 12,
 Font Type – Times New Roman,
 1.5 line spacing
 The file should be a Microsoft Word Document/PDF.

 The front page should carry only

 Name of your Institute,
 Team Name,
 Details of the team members (Name, Email IDs, Phone Numbers)

 The details of the participants SHOULD NOT appear anywhere else in the case
solution.

 Send entries to „lakshwiz@gmail.com‟ with the document name as

“Bazaar_Institute Name_Team Name” and subject of mail as “Bazaar_Institute
Name_Team Name.”

 The entries must reach us positively by Friday, September 24th, 2010 23:59:59
hrs.Shortlisted candidates of Round I will be informed via e-mail.

 The results of Round I will also be available on official website of LakshWiz on or

before Sunday, 10th October 2010. The details regarding Round II will be published
later.

 The decision of the organizers of the contest and the panel of judges will be final and
binding on all contestants.

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