In the wake of unprecedented surge in e-commerce, Indian shopping malls — already under huge pressure due to large vacant spaces — are expected to see a sharp decline in the footfalls. This could be to the extent of 55.58 per cent during the ongoing festive season this year, reveals an ASSOCHAM survey.
According to the just concluded survey, Delhi-NCR has recorded the highest decline in footfalls at city malls. About 120-150 malls were launched in the past two years but close to 65-70% of the spaces in many of the malls still remain empty.
A meagre 8-10% of these shopping malls are running successfully in India and facing tough competition from online retailers such as Flipkart, Amazon, Jabong, Snapdeal, which hand-deliver goods to the front door for minimal cost.
The festival season this year has triggered a huge rise in online shopping and may cross the Rs 55,000-crore mark, resulting in the halving of footfalls in malls in places like Delhi, Mumbai, Chennai, Ahmedabad, etc.
All the major online retailers are running various festive season sales on their platform, giving offers and discounts, on almost all the categories, as high as 80%. Last week the big daddies of Indian e-commece — Flipkart, Snapdeal and Amazon — were shaking the online commerce space with mammoth discounts and offers through their pre-diwali sales.
Read: E-commerce majors earn ‘big’ via pre-diwali sales, small towns became the biggest driver
The ASSOCHAM study also adds that there may be a five-fold increase in the revenue clocked in by the ecommerce websites in categories such as mobile phones, electronics, designer furniture, home decorations, apparel, accessories, jewellery, footwear etc.
Read: Mobile phones top sellers during last week’s e-commerce sales
The study reveals that in the nine major cities (Delhi-NCR, Mumbai, Ahemdabad, Chennai, Kolkata, Hyderabad, Bangalore, Chandigarh and Dehradun), more than 59 percent of the total mall space remains vacant, with Delhi-NCR topping the list with 68.5 percent, followed by Mumbai at 65 percent, Ahmedabad at 61 percent and Chennai at 60 percent.
According to the survey, several developers have already started offering rent-free periods of up to six months to lure retailers.
Both retailers and consultants seem convinced that the mall magic seems to have disappeared in a puff of smoke on the back of the poor revenue model, low footfalls-to-sales conversion and lack of special purpose malls, adds the survey.
The growing trend is also being attributed to the fact that all reputed Indian and international brands have tied up with e-commerce majors, with their products being offered to consumers at much lower-than-retail prices.
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