It is not just the north of the country that is seeing a furious construction of malls. Visakhapatnam, a fast-growing city in the southern state of Andhra Pradesh, is witnessing a huge demand for shopping malls. The biggest of them, CMR Shopping Mall, occupies 60,000 square feet over five floors. The throng of buyers who visit the mall are working class and office employees of the numerous public and private sector outfits that are based in Visakhapatnam.

Similarly, Ahmedabad in western India is slowly becoming a magnet for shopping malls. More than half a dozen malls have sprung up in Ahmedabad, known as a fading city of dying textile mills until a few years back. The biggest of them, aptly called Super Mall, occupies a gargantuan 90,000 square feet and has 200 shops in its folds.

But the biggest mall-construction activity in India is taking place, as expected, in Mumbai, the country's financial and business capital. In all, 25 malls are under construction, each measuring anything between 90,000 and 600,000 square feet. A hefty Rs4 billion (US$87 million) is being pumped into these projects by 20 investors. About a dozen malls are already up and running in the upmarket south side of the city, as well as the downmarket distant suburbs.

The anchors that first pull the crowds here - and at other malls all over the country - are as varied as they come. There are the US and European chains such as McDonald's, Lacoste, Pizza Hut, Benetton, Subway, Marks & Spencer and Mango. Their success has spawned the emergence of successful Indian chains such as Pantaloon, Globus, Shoppers Stop, Giant, Lifestyle and Big Bazaar. Stores named after popular branded merchandise also act as effective anchors. These include the likes of Tommy Hilfiger, Swatch, Arrow, Louis Vuitton and Nike.

Foreign mall operators cannot enter India as foreign companies are not allowed to own real estate in India. Companies like Nike, McDonalds and Reebok sell at mall outlets through their Indian subsidiaries or franchisees. McDonalds, for example, has appointed two master franchisees in India, and these in turn have appointed numerous sub-franchisees all over the country. A sub-franchisee, therefore, could open a McDonalds outlet either as a stand-alone store or as one of the many stores in a mall.

Making the job easier for the anchors is a gradual change in the Indian economy from a socialistic to a capitalistic one. This has led to a rise in the numbers of middle-class consumers, their wallets stuffed with more disposable income. According to one estimate, over the past three years, consumer spending has increased at a respectable rate of 12% per annum.

Earlier, a large majority of Indians believed in the Spartan asceticism of the Father of the Nation, Mahatma Gandhi. But the new generation of shoppers - like their contemporaries worldwide - believe in living for today and splurging at the mushrooming malls over the weekends. These consumers, many of whom have been exposed to shopping trends in the West, are also more aware and discerning.

Another reason for the ongoing boom in mall activity is the opportunity to retailers for a greater accessibility to real estate at affordable prices. Part of this is due to easier availability of bank and institutional finance. And in places such as Mumbai, the freeing up of much-needed real estate. This has happened with the many closed textile mills in the central part of the city now being allowed to exploit their real estate for other commercial purposes. Investors are attracted by the 14% returns in the malls business, compared to 11% in the office segment and 6% in the residential segment.

For the young crowd, malls have become areas in which to "hang out", to catch up with friends in stores like Cafe Coffee Days and Barista, each vying to be the Starbucks of India. There's also an entertainment factor, with more and more of the youngsters beginning to see shopping as an enjoyable pastime. Many of these are working women; the goods in the malls are now not only enticing but attainable as well.

The mall phenomenon is vividly captured by Paco Underhill in his book Call of the Mall (Simon & Schuster), and when he writes "the mall is the venue where the young have their first taste of social freedom and the rest of us compare notes", he could be talking about a location anywhere in the world, including India. "Malls are very much like television. Another totally fake environment that attempts to pass itself off as a true reflection of who we are and what we want. We disdain it, and yet we can't stop watching. Or shopping," elaborates Underhill.

The mushrooming of the Indian malls is being followed by a process of segmentation, each trying to project a particular environment, a specific image. In Mumbai, for instance, is Crossroads, the country's first mall (opened in 1999), a chic, ultra-modern collective of international brands including Swarowski, Lacoste, Tag Heur and Marks & Spencer and eat-outs such as Pizza Hut, Subway and McDonald's. At the other extreme is R-Mall in suburban Mulund, proudly displaying homegrown retail labels such as Big Bazaar (household items), Hakoba (ladies' wear), Planet M (music), Food Bazaar (groceries), Weekender Kids (children's wear) and Pantaloon (men's readymades).

The phenomenal success of Pantaloon if proof enough that the successful mall of the future will store goods that are more accessible to a broader segment of Indian society. Launched in 1987 as the country's first ready-made trouser brand by Kishore Bayani, Pantaloon has now grown into the Rs4.5 billion (sales) Pantaloon Retail (India) Ltd. Two months ago, Bayani launched his own mall, the six-storied Bangalore Central, stocking more than 300 brands across a 120,000-square-foot area. Bangalore Central also houses Central Square - a dedicated space for product launches, impromptu events, exciting shows and art exhibitions. Biyani will soon open new malls - Hyderabad Central and Pune Central - in other Indian cities.

Another group in expansion mood is Shoppers' Stop. The Mumbai-headquartered chain employs 2,000 people at 16 stores and has ambitious plans to expand to 25 locations by 2005. Lifestyle India is all set to open seven shopping malls - each at a cost of Rs100 million - over the next three years. By then, its turnover expected to jump to Rs7 billion from the Rs4 billion at present (from seven malls). Lifestyle India is looking at smaller Indian cities like Kochi, Indore, Ludhiana, Chandigarh, Lucknow and Jaipur for its plan to fan out all across India. Similarly, Piramal Holdings Ltd, which pioneered the concept in India with Crossroads, is planning to set up malls in four other cities besides Mumbai.

But Bayani has a word of caution for would-be entrepreneurs trying to cash in on the booming mall business. "The taxation and legislation system is complex and difficult to navigate," he has said. Some analysts also warn that too many malls are being built, creating a bubble that is likely to burst. "The developers have to watch out that they don't oversupply," cautions Megha Shenoy, a Mumbai-based real-estate analyst. "As it is, only a handful of them [developers] understand the retail property business property. The majority are jumping onto the bandwagon without even realizing the pitfalls."

According to a survey conducted by global property consultancy firm Cushman & Wakefield, not all mall operators are likely to benefit equally. "Only the ones in favorable locations and having the right format and suitable strategies are likely to remain long-term players," informs the report.

But Indian businessmen are known for their sheep mentality. A single success in any new field spawns many me-too imitators. However, as is evident from Indian business history, many private airlines, courier companies and granite exporters have bitten the dust.

The survivors in the mall sector will emerge only once the dust has been cleared from the frenetic mall-construction sites.