E-comm to gain as malls suffer: Report

Up to 35% consumers said they would increase spending through e-commerce, the highest compared to other retail formats.

About 54% of consumers are expected to cut spends in malls largely to avoid crowds while boosting spends on channels like e-commerce, said a report from Boston Consulting Group (BCG). Up to 35% consumers said they would increase spending through e-commerce, the highest compared to other retail formats.

This is an indication of e-commerce emerging as the preferred way of shopping for consumers in a post-Covid-19 world and retail outlets in shopping malls would be the worst hit in the near term. Tier-2 and -3 towns may still rely on traditional setups but e-commerce is seeing faster adoption, than anticipated, due to the coronavirus pandemic and lockdown. The BCG report noted 85% consumers are trying to avoid public spaces as much as possible.

This would increase e-commerce penetration in India which is around 5%, where Amazon and Walmart’s Flipkart are fighting a fierce battle. Relatively, the same is much higher in the US at 15% and China 28%, according to a Bank of America report.

“Due to the current situation, many people who were not shopping online at all, or were purchasing in a few segments like apparel, are almost being pushed to try it out now. In the past, the biggest barrier has been the first-time trial. Many of them are now getting over that with the first barrier being broken and that’s a big change. Therefore, this will provide a big acceleration to online shopping, combined with the fact — consumers will be hesitant to go out to malls for a while, after the lockdown is lifted,” said Kanika Sanghi, partner and associate director, BCG.