In the wake of unprecedented surge in e-commerce, shopping malls already battling large space vacancy, are expected to see a sharp decline in the footfalls that could reach 56 per cent during the ongoing festive season, according to a recent survey by Assocham.
The survey found that malls in Delhi-NCR have recorded the highest decline in footfalls.
About 120-150 malls were launched in the past two years but close to 65-70 per cent of the spaces in many of the malls still remain empty. Several malls, unable to attract shops are even shutting down. The major factors attributed to the shutting down of malls are economic slowdown, online shopping, high interest rate and inflation of consumer good items and steep drop in shoppers.
The Assocham research team interacted with about 720 leasing managers, representatives of malls’ management, strategist, marketers and supervisors in Delhi-NCR, Mumbai, Ahmedabad, Chennai, Kolkata, Hyderabad, Bangalore, Chandigarh and Dehradun.
In the nine major cities, more than 59 per cent of the total mall space remains vacant, with Delhi-NCR topping the list with 68.5 per cent, followed by Mumbai at 65 per cent, Ahmedabad at 61 per cent and Chennai at 60 per cent. According to the survey, several developers have already started giving rent-free period of up to six months for big brands to lure retailers.
While some malls are operating at 40 per cent occupancy, others struggle with less than 20 per cent, mainly due to poor location, poor design and poor parking facilities, the survey found.
A meagre 8 to 10 per cent of these shopping malls are running successfully in India and facing tough competition from online retailers such as Flipkart, Amazon, Jabong, and Snapdeal.
The festival season this year has triggered a huge rise in online shopping and may cross the Rs 55,000-crore mark. It has resulted in the slashing mall footfalls in half in places like Delhi, Mumbai, Chennai and Ahmedabad. There may be a five-fold increase in the revenue clocked in by the e-commerce websites in categories like mobile phones, electronics, designer furniture, home decorations, apparel, accessories, jewelry, footwear etc., the report said.
