Delhi’s Select Citywalk mall plans foray into e-commerce – Economic Times
But, given the kind of sales being racked up by online sites, the initiative could be regarded as protection from the inevitable obsolescence of brick-andmortar retail through a clickand-mortar strategy.
Getting into online shopping is critical for future growth, said the mall operator. It wants to serve as a bridge between offline and online, complementing the businesses of tenants by offering a virtual showroom as well.
For Arjun Sharma, director and promoter of Select Citywalk, online is a natural extension. After all, the mall developer has an insider’s edge.
“Through the mall we have seen the dynamics of the retail business in India and are better equipped to deal with online retail,” said Sharma, who is leading Citywalk’s online push.
“Over the years, we have gained traction… knowledge of the business, margins in the business, what brands are coming, what deals are happening etc. We have better insight into the retail business than people who are not in the business.” Sharma was categorical, however, that there will be no discounting to attract customers.
Website pricing will be the same as that in the stores. This goes against the conventional wisdom that buyers move to online purchases largely because of lower prices.
Online retail has suddenly gained visibility with businesses getting millions of dollars in funding as investors seek to the catch the next big wave expected to sweep India. Adding to the exuberance is market-leader Flipkart.com saying earlier this month that it could achieve $1 billion in revenue this year itself, a whole year earlier than previously expected. When it reaches that milestone, sevenyear-old Flipkart’s sales will be almost 40% of the Rs 15,500-crore revenue of India’s largest retail conglomerate Future Group, which has been in the business for almost 17 years and runs a nationwide network of more than 1,000 stores.
Traditional retail will however continue to be Select Citywalk’s mainstay, Sharma said. “Brick-and-mortar is a different aspect and in this country brick-and-mortar is not going away for a long time and it’s still a relevant part of our retailing,” he said.
Select Citywalk is currently studying likely strategies and has hired Technopak Advisors and a Bangalore technology company to advise it. The company is looking at a marketplace model in which existing tenants sell their brands alongside products marketed by the mall, for which it will enter into separate deals with brands. Another question it’s debating is whether to allow retailers that are not tenants to sell products through its site or app.
Under the marketplace model, the mall’s existing clients can use the website to sell products with Select Citywalk taking a commission on actual sales.
Select Citywalk will finalise the model and name for the venture in the next three months. The plan is to convert the existing website into the ecommerce platform, which is expected to go live by the end of the year. Westfield Group, one of the world’s largest mall operators with more than 100 shopping centres in Australia, New Zealand, the UK and the US, ventured into e-commerce in 2010. In 2013, it transformed its website into a “searchable mall” model where consumers can look for products to either buy at it stores or directly from brand websites.
brand websites. The Ambience Group, which operates two malls in the National Capital Region, is also studying the possibility of entering the e-commerce space.
Other top malls in India, including High Street Phoenix, InOrbit and Infiniti in Mumbai and Pacific in Delhi, said they don’t plan to get into online shopping.
“I doubt if a mall could do ecommerce as well. It is a very different proposition,” said Rajendra Kalkar, senior director for High Street Phoenix in Mumbai. Retailers in the standalone Select Citywalk mall generate around Rs 1,200-Rs 1,500 crore annually. Sharma expects the online portal to account for 3-5% of total sales in the initial years, swelling to 15-20% in the next five to 10 years.