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Are shopping malls—air-conditioned picnic spots and window-shopping havens of today—drifting toward oblivion tomorrow? In the aftermath of last week’s multi-billion dollar investments in India’s e-tailing market, the question has again raised its head. In most developed countries, 10-12 per cent of retail sales are said to take place online. This trend has affected sales in malls there (in parts of the US, abandoned malls dot the landscape).
India will add six million feet of mall space in 2014, the real estate consulting firm Jones Lange LaSalle predicted late in June, putting that doubt to rest. “Seven years ago, we talked about the demise of kirana retail, and then some predicted the end of shopping malls too after the economic slowdown. But all are doing well,” says Harminder Sahni, MD, Wazir, a retail consultancy in Gurgaon.
Besides, as Jones Lang LaSalle’s Shubhrangshu Pani says, India’s mall culture has taken deep roots. “Yet, we’re getting started on mall development. Malls are yet to reach tier-III towns, where people have yet to get a taste of it,” he says. E-tailing, experts say, is a matter of convenience—but people would still go to a mall for a pair of jeans or for a camera. “Is any customer going to reject malls altogether? No. Is anyone going to reject online altogether? Again, no,” Sahni says.
“It’s far-fetched to say that what hasn’t happened in far more developed markets will happen in India,” says Pani. The improvements in logistics and warehousing will help physical retail grow more efficient as well, he says. While that may be so in a varied market like India, it’s evident that in certain categories—like electronic and books—online sales have been growing dramatically. Malls will have to adapt to these changes. Of course, the air-conditioning and food courts help!