Are malls destined to disappear?

The Indian eCommerce sector is growing at an annualised rates averaging 15-20% according to the available statistics. Online retailers such as Flipkart and Amazon as well as Jabong and Snapdeal all have GMV (Gross Merchandise Volumes) in the Billions of Dollars. This has led to some predicting the disappearance of the Malls as greater convenience and lesser transaction costs associated with online shopping would mean that visiting a physical location for shopping would be a thing of the past. However, it would be premature to write off the Malls as purveyors of consumerism in Indian due to a number of reasons that would be explained below.

To start with, the rate of internet penetration in India is only 20% which is considerably lower than the global average and especially Western rates of internet usage. Indeed, even China which is often taken as a frame of reference to India has a higher internet user base in addition to a deep eCommerce sector. Among the internet users, the lack of reliable and convenient digital payment options as well as mobile payment options means that it would take considerably longer time for them to transact and shop online. In addition, the model of “social shopping” that animates the average Indian consumer means that he or she is more likely to shop with family and friends, a luxury that is not afforded by shopping online.

Having said that, one must also take into account the fact that the humongous discounts offered by eCommerce portals are certainly enticing more and more Indians to shop online leading to a nearly quadrupling of such transactions in the last few years. Moreover, with Cash on Delivery options and flexible EMI (Equated Monthly Instalments) offers, eCommerce as well as its cousin m Commerce seem to be making inroads into the Indian consumer landscape. Plus, with traffic woes making the visits to Malls a headache compounded by lack of parking spaces when compared to the luxury of having the purchases delivered to the doorstep means that there certainly has been a shift away from Malls.

Drawing on the discussion so far, it would seem that Malls can survive by focusing on “experiential shopping” wherein shopping would mean a holistic and wholesome experience combining the actual purchases of goods and services with that of the pleasures derived from the facilities in Malls.

1 Comment on Are malls destined to disappear?

  1. Shopping Malls are convenient for Indians living in urban areas. Week end shopping has become a big hit among the city dwellers. Majority of urbanites do not have the luxury of time for daily shopping at the local grocery stores. One important factor in favor of shopping malls is that they act as week end getaway after a hectic week.

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