What to Expect When Mumbai Retail Goes 24/7

Adding the next level to the legendary nightlife of Mumbai, the Maharashtra government has finally given a thumbs up to a proposal with far-reaching economic ramifications.

From January 27, select malls, eateries, multiplexes and some other retail establishments can remain operational 24/7.

To begin with, only a few establishments will actually remain open all through the night, and it is strictly optional. The state government has also mandated that establishments operating round the clock will need to comply to certain set guidelines, or lose their licenses.

The city that never sleeps is living up to its reputation as it joins the ranks of global cities such as London which operate 24/7. It is a definite boost to the financial capital's overall economy. One of the main advantages is that it will help generate more employment opportunities as retailers looking to avail this option will need to hire more people to handle the night shift.

Elsewhere in the world, this approach has worked quite well on that front. According to available data, employment in London rose perceptibly on the back of its night-time industries. Between 2001 and 2017, this sector grew by 2.2% a year compared to the overall growth of 2%.

Obviously, the state government will generate considerable additional revenues even as retail establishments tap into a great opportunity to counter the ongoing consumption slowdown.

Perhaps on the most significant benefits for brick-and-mortar retailers is their increased ability to compete more convincingly with essentially 24/7 online retailers. It will be interesting to see how e-commerce players respond at a time when practices like deep discounts are already under the scanner.

The positive impact of this move is quite location-dependent, and will therefore not benefit all retailers and customers in the city. The major impact zones would be retail establishments in and around offices that operate at all hours, such as BPOs and other IT/ITeS entities.

On the flip-side: There is always a price to pay for progress. A more active night-time economy means that a larger workforce will commute at night, so public transport facilities will need to be considerably enhanced. Also, apart from the fact that providing more night-time distractions will certainly not improve overall Circadian rhythms, disturbance to people living in areas which have both residential and commercial elements must be considered.

The state will have to drastically revisit the whole law and order situation, with round-the-clock patrolling and improved situation response mechanisms. While only time will reveal the long-term implications of this move on the city's safety levels, certain aspects such as women's safety must be accounted for from the word 'go'.

The need to up the ante on basic civic facilities like water and electricity during the wee hours is a given. Round-the-clock retail activity and accompanying footfalls will significantly increase the requirement of these utilities.

All things considered, it is at the very least an interesting socio-economic experiment which will hopefully work out well on all fronts. The retail sector currently accounts for about 10% of the country’s GDP. If round-the-clock retail operations become a reality in more cities, this contribution can increase significantly, but not without commensurate investments both at the retailer and municipal levels.