After an unusually tough year, malls are seeing some recovery in business with Christmas and the upcoming New Year festivities.
The Covid-induced lockdown from end-March saw malls being shut for a few months, and things began to look up only after the festival season kicked off with Diwali. Footfalls at malls have gradually increased since then, and the momentum is continuing as the year draws to a close. Christmas offers and End-of-Year sales are drawing in customers and business has picked up.
Like brands, malls are also coming up with offers to entice customers to splurge. Mumbai’s Oberoi Mall is hosting its annual Christmas Shop & Win event called ‘Jingle All the Way’ from December 11 to January 10 where visitors can win free movie tickets or gift vouchers if they shop for items worth Rs 5,000 and above. Similar offers are available in other malls as well. And this is what is luring people to malls.
"After getting permission to reopen, in June, July and August, we were seeing 20 percent footfalls and 40 percent of business of last year. And now we are looking at 50 percent footfalls and business is at 80 percent of what it was last year. In terms of categories, electronics and jewelry are 100 percent in terms of business," Muhammad Ali, COO, Forum Malls, told Moneycontrol.
However, apparels as a category is not performing well, he said. "We were expecting good growth for apparels in Nov and December but that didn’t happen and it is still 70 percent. We thought that End of Year sale would help break barriers but that didn't happen.”
The month of December is quite significant for the mall business. Shashie Kumar, CEO, Brigade Malls, said the period between October to March (second half of a financial year) contributes 60 percent of a mall's overall business. "In the second half (H2), October, December and January are bumper periods. So, out of the 60 percent that malls get in H2, 70 percent comes from Diwali and Christmas. Hence, December is crucial.”
"While November was good this year, I can't take that as a trend. Hence, it is December that will tell me whether the recovery is good and so far it is 80 to 85 percent, which is encouraging. And it is likely that this will continue in January 2021," he added.
Other malls like Orion Gateway, Phoenix Marketcity, Viviana and Oberoi Malls are seeing a similar recovery in business this month.
Anuj Arora, General Manager, Oberoi Mall, located in Mumbai’s suburbs, said that December is seeing a similar trend as in previous years with an increase in both footfalls and sales.
For Viviana Mall, footfalls have increased and are currently 60 percent of what it was in December last year, said Chief Marketing Officer, Rima Kirtikar.
"While malls are seeing higher recovery rate like 80 to 85 percent in terms of sales, footfalls are lower at 60 percent if we look at November-December data. Footfalls are low because cinemas are seeing only 25 percent recovery. And they are large footfall driver. Yet, business is better because conversion rate is strong," said Kumar.
Forum Malls’ Ali said that earlier only 20-25 percent of footfalls was relevant to malls as they were serious buyers and the rest would only come to visit malls. But now malls are seeing more focused buyers.
"If this continues we are hoping that we will see 70 percent of footfalls and 120 percent of business by March (2021)."
Ali, who is optimistic about the mall business, shared an interesting trend being seen currently. He said that in November and December, in comparison to tier I markets where footfalls are at 50 percent and business at 80 percent of last year, tier II cities are performing better.
"In tier II cities, footfalls in malls are at 60 percent and business has come back to 100 percent. What has happened is that Bengaluru, Hyderabad are dependent on IT business and this crowd is not there now as people have moved to their native places. So, in places like Mangaluru, which has a lot of NRI crowd, Mysore, Udaipur malls are seeing stronger business and footfalls," said Ali.
He added that the game changer for malls in Bengaluru and Hyderabad will be when the IT crowd goes back to office.