ECONOMYNEXT – Though brick-and-mortar retail is contracting in the face of e-commerce in advanced markets, Sri Lanka’s payment card penetration is still low and malls which have entertainment still has potential, an industry official said.
Global trends showed that big mall and retail spaces were still growing, though not at rates seen earlier.
“The big malls and retail spaces are not going away,” Sarinda Unamboowe, Chief Executive of MAS Kreeda told a forum organized by the Sri Lanka Retail Association, an industry body.
“It’s just that they are not growing as fast as the rest of the spectrum.”
Malls with only retail and no entertainment however were closing down.
People are social creatures and they still enjoy physical purchasing over online purchasing up to a certain extent, he said.
In Sri Lanka malls with both entertainment and retail, like the One Galle Face, Colombo City Centre and Marino Mall are now added to the market with existing malls like Liberty City and Majestic City.
“People are changing but the diverse offerings of retail spaces attract people into the malls,” Unamboowe said.
“Malls are becoming places of experience rather than pure shopping.
“E-commerce is catching up, but it hasn’t gone and surpassed malls.”
Unamboowe said that even though Sri Lanka has a recorded 32 million mobile subscriptions, e-commerce only occupies 0.5 percent of retail sales.
A main constraint on e-commerce in Sri Lanka is the lack in credit/debit card penetration which is the staple method of payment in online transactions.
“In the financial platform, if you look at the corresponding credit card usage hasn’t grown anywhere near the mobile subscription figures,” he said.
Most e-commerce startups fail owing to poor managing and technical drawbacks. (Colombo/Dec06/2019)