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As if the economic slowdown was not enough, malls also have to contend with online retailers, who offer huge discounts, easy payment options, free doorstep delivery and friendly exchange policies.
The e-tailing industry is growing at a fast pace, with Technopak estimating the market to be worth $1 billion in 2013. It is pegged to grow at about 50 per cent every year to touch $56 billion by 2023.
Susil Dungarwal, founder of mall management firm Beyond Squarefeet, says that malls need to improve operational efficiencies to counter e-tailers and offer customers a better deal. “You cannot penalise customers because your own overhead expenses are high. Online retailers are able to sell at lower prices since they can pass on the benefits of supply-chain efficiency to customers.”
But mall developers do not consider e-tailers a threat yet. “I think it is a large market. Even internationally, e-commerce is not a huge number. In India, the whole retail sector is growing rapidly, and there is vast scope for organised retail,” says Kishore Bhatija, MD and CEO of Inorbit Malls. Moreover, he says, shopping is not just something done on a device. “It is an experience in itself. And experience can never be replaced by e-commerce.”
Malls that are not doing well could benefit by focusing on providing shoppers that experience.
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