America’s shopping malls’ dwindling fortunes may catch up with Nigeria, GODDIE OFOSE writes
Economic decline in parts of the United States notably the mid West combined with an accelerating trend towards online shopping and new forms of urban shopping centres have pushed the once seemingly invincible and all-American shopping mall into decline.
Many are thriving, and being renovated and extended, yet ‘ghost malls’ are fast becoming the ‘ghost towns’ of the early 21st century. Photographers have begun to see them as fascinating, if decidedly disturbing ruins.
This is the situation of the shopping mall centres across America and some European countries.
Attention is being turned to Nigeria, Africa’s biggest economy, as shopping mall culture has surfaced across major cities since the arrival in Nigeria of South African super power retailer outlet, Shoprite.
Prior to the accelerating trend in shopping mall culture in America, there was an upsurge of departmental stores in the 1970s and 1980s but the situation took a turn for the worse when stores like Dominos went under.
Statistics released by digitXplus, the digital unit of MediaReach OMD, that Nigeria is ahead of the United Kingdom in information technology access has further boosted e-commerce.
Nigeria recorded a 200 per cent growth in internet users between 2009 and 2013. Nigeria, which tied at 55 million internet users with the UK in 2012, took a 14 per cent leap of about 62.4 million users above the UK, which recorded increase of two million (57 million) users in 2013.
Nigeria’s retail sector is also considered one of the most promising on the continent. Little wonder the emergence of shopping acres across major cities such as Lagos, Ilorin, Enugu, Abuja, Kaduna and Akure in recent times.
In 2013, Industry, Trade and Investment Minister, Olusegun Aganga, said during the inauguration of the Retail Council of Nigeria that the country has attracted over N205.4 billion investment into the retail sector since 2011.
Aganga identified the retail sector as a major driver of economic growth, job creation and wealth generation globally, and said Nigeria has great opportunities for existing and new investors to take advantage of.
In the past decade, Lagos has witnessed increase in shopping malls – Palm Shopping, Ikeja City Mall, Part ‘n’ Shop, Mega Plaza, SPAR, Justrite and Surulere Shopping Centre.
But shopping at the mall poses challenges, particularly in a place like Lagos.
Ikeja City Mall Chief Executive Officer, Norman Sanda, said Nigeria is ready for people to shop comfortably, throwing up huge opportunities for shopping malls.
He added, however, that “problems exist with infrastructure as far as roads are concerned. For example, if you have a mall in the UK, people are ready to travel 150 kilometres to shop there, but to do that in Nigeria is difficult.”
While mall shoppers worry about bad roads, online shoppers have their goods delivered at home.
Insecurity poses a serious challenge to shopping mall operators nationwide, reiterated Charles O’Tudor, a brand management expert.
But insecurity is not a problem in online retailing.
“I agree that globally the physical shopping culture is reducing, especially in developed economies with world class supporting infrastructure (power supply majorly, which affects other sub sectors), but the same is yet to be imbibed in Nigeria for obvious reasons,” added O’Tudor, who is also Concrete Ideas Chief Executive Officer.
“Without adequate infrastructure such as power supply and its drawbacks, the internet, and of course computers, can’t function. This invariably creates apathy and indifference on the part of consumers.”
Online retailing is still evolving and experts noted that intra-competition is yet to spring up because consumers see shopping malls as a tourist centre for sightseeing and family outing.
Bolarinwa Adedeji, a shop owner at Ikeji City Mall, said “it is high time we considered that this factor (online retailing) is a challenge. Where is Woolworths today?
“We may not agree that online retail platform is a challenge but the truth is, what is happening in Europe and America is fasting catching up with us. My volume of business has reduced because some of my customers now patronise online retail platforms.”
Sanda confirmed that online retailers are fast eating into the market share of shopping malls as a result of challenges such as traffic, insecurity and inconvenience.
Investigation showed that half the crowd at mall centres are not there to buy but do sightseeing or watch movies.
Online retailers are gaining momentum at the expense of shopping malls, and some physical store operators have started incorporating online platform.
Online retailers have sprung up in recent times, and many do not have a warehouse, unlike Jumia.com, konga.com, adibba.com and others. They rely on stores at the malls to supply goods.
The apprehension is that once this segment of online retailers get settled and own a warehouse, they will severe their relationship with malls.
Stakeholders may not agree that the American experience is here yet, but the world is a global village. What happens to Japanese market may get to Nigerian market someday.