Hit by growing popularity of online shopping in India, the shopping malls are witnessing lesser footfalls leading to increase in vacancy rate at 25 per cent, along with a 30 per cent drop in rentals during the last year, according to the study.
The Assocham-PricewaterhouseCoopers study added that e-commerce industry seems to be unaffected by the demand slowdown and is likely to clock compounded annual growth rate of 35 per cent, crossing the $100-billion mark over the next five years, from about $17 billion at present.
It pointed out that the trend in Indian malls is in line with the declining number of footfalls in retail space in over 200 shopping malls across the U.S., the U.K. and other countries. While in the U.S., vacancy rates for malls is 46 per cent, in the U.K. it stands at 32 per cent.
“It is true that the online shopping has shown handsome growth while the brick and mortar malls are witnessing slowdown. It looks that the growth in e-commerce looks impressive because of quite a low base and increasing penetration of internet,” Assocham Secretary General D.S. Rawat said.
The study found that in India, sales in shopping malls dipped by 25-30 per cent, while footfalls fell by 15-20 per cent over the last year.
“The challenges of suburban sprawl, worsening automotive traffic, rising fuel prices and the increased difficulty of time management in modern families have made going to the mall a planned activity,” the paper reasoned.
It is estimated the number of consumers buying online in India will increase to 65 million in 2015, from 40 million , on the back of improvement in infrastructure such as logistics and broadband and Internet-ready devices.
