Shopping malls in major cities may witness a decline of more than half in footfall this Diwali, with the trend of online buying catching up on the back of discounted sales by e-tailers, a survey.
"In the wake of unprecedented surge in e-commerce, shopping malls, already under huge pressure due to large vacant spaces, are expected to see a sharp decline in the footfalls to the extent of 55.58 per cent during the ongoing festive season this year," a survey by Assocham revealed.
Delhi-NCR has recorded the highest decline in footfalls in the city malls. As per the survey, about 120-150 malls in Delhi-NCR were launched in the past two years but almost 65-70 per cent of the spaces in many of these malls remains vacant.
"Several malls, unable to attract the shops, are even shutting down," the poll said, adding that the major factors that attributed to this situation are economic slowdown, online shopping, high interest rate and inflation in consumer goods.
The survey drew responses from major cities in the NCR (National Capital Region), apart from Delhi, Mumbai, Chennai, Ahmedabad, Kolkata, Hyderabad, Bangalore, Chandigarh and Dehradun.
In the nine major cities, more than 59 percent of the total mall space remains vacant, with Delhi-NCR topping the list with 68.5 percent, followed by Mumbai at 65 per cent, Ahmedabad (61 per cent) and Chennai (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.
Both retailers and consultants seem convinced that the mall magic seems to have disappeared in a puff of smoke on the back of the economic slowdown, poor revenue model, low footfalls-to-sales conversion and lack of special purpose malls, the survey added.
The festival season this year has triggered a huge rise in online shopping and may cross the Rs 55,000-crore mark, resulting in the halving of footfalls in malls in places like Delhi, Mumbai, Chennai, Ahmedabad, among others Assocham said.
The study reveals that there may be a five-fold increase in the revenue clocked in by the eCommerce websites in categories including mobile phones, electronics, designer furniture, home decorations, apparel, accessories, jewellery and footwear.