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Fall 2011 A Pinch of Masala, A Dash of Salsa:
Ethnic Mall Enclaves

With America’s minority population on the rise, ethnic malls that cater to these different demographics, are in a unique position to capitalize on their increasing buying power.

At the Global Mall in Atlanta, GA, cricket gear and chaat (Indian street food) compete for shoppers’ attention, while at the Great Wall Mall in Kent, WA, herbal medicine specialists and bubble tea attract local customers.

Such malls that cater to a specific ethnic group or culture are not a new concept but recent years have seen a real boom in ethnic malls. By definition, ethnic malls are shopping centers that provide goods and services of particular sub-cultural tastes and mainly serve the corresponding ethnic and/or racial group. The cultural characteristics exemplified in goods and services as well as the ethnic identity of customers are defining features of these malls and plazas.

Ethnic malls have garnered some increased attention over the past couple of years as many say they have weathered the recession better than most mainstream U.S. malls. One factor contributing to the growth in ethnic malls is the increasing buying power of ethnic and racial minorities. According to a study by Selig Center for Economic Growth at University of Georgia, “the combined buying power of racial minorities will rise from $1.6 trillion in 2010 to $2.1 trillion in 2015, accounting for 15 percent of the nation’s total buying power.” Specifically, Asian buying power is expected to grow 42 percent, from $544 billion in 2010 to $775 billion in 2015; and Hispanic buying power is expected to grow 50 percent in the next five years, from $1 trillion in 2010 to $1.5 trillion in 2015.

Indian in Georgia

Shiv Aggarwal saw a need in the local Indian American community in Atlanta, that inspired him to open a one-of-a-kind mall targeting Atlanta’s large Indian population. The Global Mall, a 220,000-square-foot mall, caters to the needs of the greater Atlanta Indian American community, which Aggarwal estimates to be over 100,000. The mall’s design and development were inspired by the large malls in India, Aggarwal’s native homeland. It distinguishes itself from mainstream malls by carrying items of interest—such as Indian-inspired clothing, jewelry, artwork and even groceries—to the demographic it serves.

Equally important, Aggarwal, the mall’s president, says it is a “community center for the local Indian and South Asian communities in the area.” Global Mall brings the community together for more than just shopping by offering a learning center, a banquet hall, and a temple. The Indian American community showcases its ethnic flair by hosting regular cultural activities and performances such as dances and Indian music shows at the mall.

Service providers such as dentists, beauty salons, permanent make-up salons, accountants and dance studios, have also set up shop at Global Mall. In addition, the mall boasts a wide array of Indian food vendors and restaurants. Aggarwal sees only advantages to his business being an ethnic mall. “There’s no other mall in the U.S. like us. There’s no comparison to our products and cultural activities; it’s like the big malls in India,” he says. Although the local Indian population makes up most of his customers, the mall is also popular with the rest of the population, particularly for the food.

Appealing to Asians

The Great Wall Shopping Mall opened its doors in 1999 in Kent, WA—an area where the Asian population has grown tremendously. Christine Lee, the mall developer, says that when the mall opened, the local Asian population represented just about 2 percent. “Now it’s closer to 40 percent Asian,” she says. Her mall is a place where the Asian community can feel at home. “We have groceries, books and newspapers that cannot be found elsewhere in our area,” Lee says. Because of its unique environment and product selection, she says customers regularly come from a 50-mile radius and from as far away as Oregon to stock up on Asian essentials. The cultural flavor of the mall is not lost on non-Asians either; the mall tends to be a favorite tourist stop for visitors of various ethnicities and those that come to the area on cruise ships.

During the recession, gross sales did fall slightly. However, the anchor store, 99 Ranch Market, a major Asian supermarket has continued to do exceptionally well; so have other stores that provide basic necessities. Lee says she has also opened the doors to many more entrepreneurs wanting to open new store concepts after losing their jobs in other industries.

Similar to Global Mall, The Great Wall Shopping Mall also hosts Asian events and entertainment and raises money for causes like the local Children’s Hospital. Free breast cancer screenings are offered occasionally. The mall also provides a free bus service for local seniors to come to the mall and have a free lunch. The racial make-up of visitors to the mall is approximately 85 percent Asian, and 15 percent other races including Caucasian.

A cause for a fiesta

Ethnic malls such as Global Mall and The Great Wall Shopping Mall are likely to continue growing and being developed as one in three U.S. residents belong to a minority group, says the Pew Research Center. Furthermore projections are that number will increase to one in two by 2050. Hispanics alone will go from 14 percent of the population today to 30 percent by 2050. Latinos in the U.S. controlled $951 billion in buying power last year, up by 349 percent since 1990, reported the Pew Research Center. Hispanic buying power is expected to hit $1.4 trillion by 2013.

Additionally, population growth among Hispanics and Asians is faster than the total population, said the report from University of Georgia. Asian and Hispanic populations are relatively young which means that proportionally more Hispanics and Asians are starting their careers and moving up their career ladders. Increased entrepreneurial activity and a rising level of educational attainment also illustrate the upward mobility of Hispanics, the report found.

These facts are not lost on the developers of Latino-focused malls such as La Gran Plaza in Fort Worth, Texas and Plaza Mexico in southern California.

Plaza Mexico, located in Lynwood, CA, is a 600,000-square-foot mall with 250 stores that targets the area’s Latino population. It occupies a central location in southern California just minutes away from the Los Angeles airport, Hollywood, and Orange County. The mall opened in 2001 with a charming design inspired by the Mexican town of San Miguel de Allende. The picturesque mall includes a center courtyard, called the plaza, built as the heart of the mall just like plazas in towns and cities all over Mexico. Traditionally plazas are outdoor areas where families meet and enjoy each other’s company after church on Sundays and for holidays and various celebrations, says Carlos Villar, Marketing Director. The mall’s designers were very careful to create an environment that transports visitors to a scenic Mexican setting by importing the mall’s entire infrastructure from Mexico, according to Villar.

The mall’s retailers are an eclectic mix of independent and large chain retailers both Latino and non-Latino. Specialty retailers at the mall sell Latino-targeted products ranging from clothing to jewelry to works by Mexican artisans. To generate foot traffic, the mall hosts numerous cultural events—all free for the public to attend. Recently Plaza Mexico hosted the largest public viewing of a World Cup Soccer match, hosted by celebrity Mario Lopez. Villar says the mall also hosts celebrations for all major Mexican and U.S. holidays.

Although the shopping center is targeted at the area’s Latino population, Plaza Mexico tends to draw shoppers from various cultural and ethnic backgrounds, particularly as a cultural destination. In fact, the state of California recently named Plaza Mexico a Cultural Destination Center, says Villar. He considers being an ethnic mall a distinct advantage; he points out that thanks in part to the mall’s economic impact on the local community, South Central Los Angeles has been revitalized. The success of Plaza Mexico has attracted the attention of other metro areas such as Phoenix, AZ, which recently sent officials to Plaza Mexico to see if the concept could be replicated there.

Another mall that caters to the Latino population is La Gran Plaza of Fort Worth, TX, which occupies 1.2 million square feet with over 200 stores and 10 carts and kiosks. Businesses here include a wide array of independent and chain-store retailers selling Latino-inspired clothing, shoes, jewelry, perfume, sportswear and formal wear.

Inside the mall is a unique mall-within-a-mall called the Mercado, a 125,000-square-foot, three floor, trade-show-like space for smaller businesses providing unique products and services. Each of the three floors has 100 booth spaces. Mercado retailers rent a booth space and can set up as they wish, to sell their product or service. As the other ethnic malls do, La Gran Plaza also hosts cultural activities and entertainment and has a Latino movie theater and large children’s play area.

The success of ethnic malls depends in large part on the size of the corresponding community. Property Manager, Melanie Lamb of Plaza Fiesta Carolinas in Fort Mill, SC, found this out the hard way. Unfortunately for the shopping center, the community around the mall does not have a large enough Latino population to support it as a Latino-only mall. In order to revitalize the mall, she’s had to attract a broader base of retailers and shoppers. Now Plaza Fiesta Carolinas has about a 50-50 mix of Latino and non-Latino shops, says Lamb. “We have a huge children’s play area and on any given day you’ll see just as many Caucasian, African American and Asian families there,” she says. “The ethnic concept just didn’t work for this property,” she adds. So although the mall’s façade is Mexico-inspired, Lamb is working hard to make sure everyone in the local community will find something that suits them at Plaza Fiesta Carolinas.

Specialty retail in ethnic malls

At Global Mall in Atlanta, the specialty retail offerings also cater to the Indian American demographic. So Indians nostalgic for a taste of paan, a betel leaf laced with spices that works as a mouth freshener, can find it at “The Pan Stand.” Inline stores that sell health and wellness products from India, as well as other specialized food and services abound. Aggarwal says he is always entertaining new ideas to expand the cart and kiosk businesses at Global Mall.

Although the 99 Ranch Market is The Great Wall Shopping Mall’s greatest draw, customers also flock to other stores such as the ones selling Chinese herbal medicines as well as Asian food. The mall also offers clothing and jewelry stores, video stores that specialize in Asian entertainment, and massage salons. The mall also has a half-dozen cart and kiosk operators that sell cell phones, mobile device accessories, and Asian health supplements. Lee says she also has additional weekend pop-up vendors. These include a local bank, a satellite television provider and real estate brokers. Lee says she is always looking to fill the specialty retail program with services and products that are unique and not currently sold in the mall’s inline stores.

For its part, Plaza Mexico is home to over 20 cart and kiosk retailers, all located outside in the plaza. Villar says the location is ideal because the retailers are that much more accessible to the mall’s customers. “Our carts and kiosks seem to have great personal relationships with our customers,” says Villar. Plaza Mexico’s cart and kiosk businesses sell products that range from cell phone accessories to religious accessories and flowers. “They have very unique products,” says Villar about the cart and kiosk retailers. For example, one retailer is popular for his highly desirable arts and crafts he specially imports from Veracuz, Mexico. Villar says specialty retail is integral to the mall and he is devoted to nurturing the success of the mall’s specialty retailers and help them grow.

It is hard to say exactly how many major malls could be considered ethnic malls; however it is certain that the number will continue to grow as will the opportunities for specialty retailers and entrepreneurs with ethnic products and products that appeal to a particular ethnic demographic. With rising buying power and population numbers, our nation’s ethnic minorities will continue to drive this new segment of mall development. These malls offer an eclectic mix of unique products and retailers as well as basic necessities and services. Mall operators pride themselves in creating a cultural gathering place with frequent entertainment and an experience that is more than shopping, a place to experience a strong cultural flavor and community. “We are a cultural destination,” says Villar, “which we consider a distinct advantage. It’s helped us maintain consistent sales numbers throughout economic ups and downs.”

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Melissa M. Kellogg

Melissa M. Kellogg is a freelance writer specializing in small business, marketing, social media and retail business management. She is based in Edwards, CO, and is a regular contributor to GIFT SHOP magazine. Her work has also been published in various newspapers and magazines in the U.S. and Mexico

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