From being the go-to place for every age group, and for every need, malls have now become more of a place to breathe in cool air for a bit, because a major chunk of mall consumers has shifted online. Even during the festive season of Dussera-Diwali, when most Indians prefer to stock up on shopping, most shopping malls recorded a footfall of 50%. This may be largely because online marketplaces offered jaw-dropping discounts in the same period, and sometimes even before and after that period.
After brick-and-mortar retailers, and direct sellers, it’s the turn for shopping malls to feel the brunt of ecommerce eating into their customer base. Who is responsible for this, and how?
Service providers
Retailers are closing their offline stores and expanding online. Be it Florence Clothing Company, who decided to shut 3 of its 10 stand-alone stores, or be it Soulflower, an organic handmade personal care products brand that recently shut its store in Inorbit Mall, Mumbai, most brick-and-mortar stores have decided to focus on online sales and sales through departmental stores like Lifestyle.
“Our brick and mortar retail business is credit based and has low returns. Whereas online, we get the order first and then fulfil it, giving us a better view of our inventory and return on investment,” said Chirag Pavecha, Manager of MK Synthetics, a Bangalore-based silk sari wholesaler who entered into an exclusive partnership with Flipkart after closing some of its offline stores.
Latest addition to this list is Future Group, the name behind Indigo nation, Scullers, Big Bazaar and others. Kishore Biyani, CEO, Future Group, had earlier expressed his discontent with online prices being too low for offline retailers’ comfort. However, now Future Group will start selling 45 apparel brands and gradually begin selling more in-house brands across categories on Amazon. This seems to be as a result of Biyani’s meeting with Amaozn’s CEO Jeff Bezos last month.
Not only is it cheaper for merchants to start selling online considering there are no rents and other overheads, but it is also easy to sell across several channels with the help of a management system such as Browntape.
Service receivers
“When I can shop from the comfort of my home or office, why should I drive all the way, pay a parking fee, and scout for things in a mall?” asks a tech-savvy Shreya Shukla, as she confides her e-shopaholicism.
“In an offline store, I have to wait for the end of season to grab a deal. But in the online world, it’s a sale every single day!” This is an enthusiastic Syed Suri, who follows online deals closely. To further that, Flipkart’s Big Billion Day, Google India’s Great Online Shopping Festival, and Alibaba’s tremendous Singles Day sale in China reassure the customers that their choice of buying online is an economical one.
Industry influencers
When a renowned face lends their face to advertise for an online marketplace, or an industry giant invests in a shopping website, it works wonders for the credibility of the ecommerce company. When Ratan Tata’s investment in Urban Ladder, online furniture store, was announced recently, the company’s cofounder expressed how this move reinstated the company’s faith that they were progressing in the right direction.
Azim Premji’s family office Premji Invest is an investor in Snapdeal, and in Flipkart-acquired Myntra. Narayana Murthy’s Catamaran Ventures has picked up significant stakes in Yebhi and Amazon India. Launched in 2010, Murthy’s ₹600-crore fund has formed a joint venture with global e-commerce giant Amazon’s Asia unit to create a new entity.
If certain section of buyers had doubts about shelling their money online, such news helps clear those doubts. When an iconic businessman invests in an online marketplace, buyers feel confident buying from there, and sellers selling.
Though the rapidly growing sector of ecommerce in India seems like the biggest reason for the poor plight of malls, there are other factors such as the basic design of the mall, the services and facilities it provides, the brands it houses, its location, its parking space etc. Mall players such as DLF have begun to address the issues to save their malls from becoming obsolete. DLF has hired an advisory team to suggest ways to resurrect its many malls, most of them in the NCR. It has even gone to the extent of approaching various brands to price their products in the mall outlets same as they’re priced online. The pricing strategy is the major differentiator between online shopping and offline, and online sellers will have to be wary about that.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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