READ: This article about the decline of shopping malls in the US.
The Wall Street Journal is reporting that retail foot traffic and hence sales are down for the large retailers in America.
This is partially due to belt tightening, but the main reason is the rise of online shopping. Big box retailers like Sears, Best Buy and Target are seeing declining numbers because most shoppers are choosing to shop online through sites like Amazon.com. This has in turn lead to a phenomenon of "dead malls" that stand permanently empty and vacant.
Although South Africa is currently protected from this phenomenon due to limited access to the internet, slow internet speeds and challenges in its postal system.
South Africa has a strong mall culture, and it seems new malls spring up regularly, with at least 14 malls to be completed in South Africa this year. With metro areas reaching near saturation, we have seen a shift towards mall development in rural areas and smaller towns with more malls are being constructed in these areas.
A preview of a global survey on online shopping habits by professional services firm PwC has revealed more South Africans are shopping online, with 68 per cent of respondents using online vendors having made their first purchase within the last four years.
Additionally, the survey – which is due to be released on February 24 – found 13 per cent of respondents reported shopping online on a weekly basis, with nearly half of all purchases being made on a mobile device.
South Africa has seen a rise in the number of online retailers operating in the country, with reports in August last year that Media24 was launching Spree, an online shopping experience for its magazine reader. As internet speeds and the postage system are bound to improve, it is likely that the online shopping phenomenon will eventually grow in South Africa.
South African multinational Naspers reported its revenue from e-commerce was up 61 per cent, totalling over ZAR4 billion.
Is South Africa in danger of suffering from "dead malls"? Let us know what you think.