Mumbai: Once the ubiquitous markers of India’s post-liberalization economy, shopping malls face an uncertain future in the country today. Last year saw the closure of a record number even as others sought to reinvent themselves as recreational centres.
Data from a recent survey conducted jointly by the Indian arm of global market survey firm YouGov and Mint suggests that malls face an uphill battle in attracting young customers.
The YouGov-Mint Millennial Survey conducted in July shows that a majority of India’s youth prefer shopping online to malls.
This is true of all income groups. The gap between those who shop online and those who shop at malls is almost as high among those with lower incomes as it is among people with higher income levels.
Millennials refer to those who attained adulthood in the early 21st century and grew up just when the world became more digitally connected. In this analysis, millennials refer to those born between 1981 and 1996 or those aged 22 to 37 years in 2018. Those born after 1996— aged 21 years or less— are here referred to as post-millennials or Gen Z. Population projections from the UN Population Division suggest that the Gen Z population already exceeds millennials in India.
Considered the “holy grail" of marketers, the consumer choices of these two cohorts can make or break consumer-centred industries. For shopping malls, the prognosis does not appear bright.
Not only are millennials and post-millennials less likely to visit malls, they also tend to spend less time when they do visit, posing a challenge to malls, which are trying to rebrand themselves as recreational centres and meeting venues.
The YouGov-Mint Millennial Survey was conducted online among 5,000 respondents from YouGov India’s panel of internet-users spread across more than 180 cities. A little less than a thousand belong to Gen X (aged 38-53) in this sample. Older millennials (aged 29-37), younger millennials (aged 22-28), and post-millennials (18-21) all have more than a thousand representatives in the sample. Those born before 1965 (pre-Gen X) have been excluded from the analysis.
Unsurprisingly, among the millennials and post-millennials, it is the ones who are currently employed who shop most frequently, followed by housewives.
Across respondents of different employment status—whether working, housewives, students, freshers, or unemployed—most prefer shopping online to shopping in malls.
Brick-and-mortar retailers seem to believe that it is merely through discounts that online retailers are able to woo customers. Such discounts have come under government scrutiny now.
However, there are other factors also at play. Digital shopping platforms have also started offering recommendation using data analytics to attract customers.
Because of size effects, the more people shop online, the better the recommendations they receive. For working adults who face long daily commutes, shopping online also offers the advantage of transit or “on-the-go" shopping.
According to recent research by Pew Research Center conducted in the US (pewrsr.ch/2i0n0QU), consumers today find value in being able to compare prices from different sellers and to be able to read reviews posted online by others who have purchased the item. In some cases, consumers have been reported going to a store to view something in person, and then buying online to get the best deal. The most frequently bought items online are electronic gadgets and clothes, the YouGov-Mint survey data shows.
Both men and women purchase gadgets and clothes. But while men tend to buy gadgets and accessories for gadgets more often, women tend to buy clothes and fashion accessories more often.
The growing attractiveness of online shopping and the changing habits of India’s digital natives help explain why malls face an existential threat despite a growing consumer market in Asia’s third largest economy. Lobbying to curb online discounts may not take brick-and-mortar stores very far.