E-Commerce’s Impact on Mumbai Retail

E-Commerce’s Impact on Mumbai Retail

I wrote an article about my time last year in Los Angeles and was amazed to see that on Melrose Place, one of the most famous high-end shopping streets in LA & one of the most famous in the United States had a tremendous vacancy rate. I haven’t been back yet for an update, but about a year ago roughly twenty-five percent of the shops & showrooms were vacant on that street alone!

There could be a number of factors for this, but it’s quite evident that e-commerce is a big player, with more affordable prices and a wider selection and home delivery for free… it’s a tough combo to compete with!

However, we haven’t seen much of an impact it seems on retail spaces in Mumbai. The majority are full of brands, Phoenix Mills is full (they don’t even pay brokerage for their shopping malls because the companies come to them, there is that much demand & that little premium supply), the e-commerce wave hasn’t seemed to have impacted Mumbai.

But, I think it will to a certain degree. Indians love a deal so much that they will throw the idea of opportunity cost out the window more than any other group I’ve ever encountered – we’re all susceptible to this, but from my experience, Indians take the cake. The exhilaration of getting a good deal is more important than anything else it seems at the time. Having said that, I know very well of individuals who will go to electronic stores, clothing stores, shoe stores and the likes, try out the products and then go home and buy it online at Amazon or Flipkart. Sometimes there are big savings, other times there are not, but either way, this is happening more and more.

How these electronic stores stay in business, I have no idea. How many of these foreign retail chains that take up large spaces on Linking Road make a net profit, I highly doubt it.

However, it’s great for marketing and brand building in the world’s largest and fastest growing economy. And considering the stores do make money on the top line and then get to advertise their brand on the main street, makes it more than worth it (at this point in time). They stay relevant… And whether you buy that Nike shoe as the store or you buy it online, it’s all good. Now for those that don’t have a brand but sell brands like a Croma or something like this, good luck!!! Nobody cares if they bought from Croma or not, they care about the brands inside where many are buying online after doing the first inspection in person.

Jagaha Signage

Given India is a booming market and brands want to remain relevant here, they will continue to invest and it’s very unlikely we will see 25% of Linking Road for instance with for lease signs up, but if they do, do yourself a favor an put up a Jagaha sign!