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Minahil Javed

2020-11-0299

MKTG 222: Retail Management

Saadia Raza Bukhari

9th September 2019

Impact of Large Shopping Malls on Retail in Pakistan

Pakistan’s economic retail sector is segmented into two sectors: the organized retail

sector (malls) and the unorganized retail sector (independent shops located randomly). The

organized sector offers shopping, food and entertainment all under one roof. Inching its way,

this very sector of the retail market is all set to become the next thriving industry. Although

its share is small, the organized sector has started tapping the massive market sector signaling

an adverse effect on the unorganized small retail businesses.

Those who for years have been at the forefront of retail growth are now appalling. For the

occasion, the stagnation may have set in an episode of nerves, if not a sort of frenzy, blurring

the judgment of the brands that have been horrendously built throughout the years. Moreover,

the routinely practice of attractive pricing, enables malls to gradually squeeze out the small

traders for whom it’s inevitable to compete hence, enlarging the distance between two divisions

of the society, the rich and the poor. For example, the recent addition of the Centaurus Mall in

Islamabad diverted customer traffic from the two main shopping hubs of Islamabad: Jinnah

Super and the Super Market (Arooj, 2018). The concept of shopping malls has altered the

consumer buying behavior drastically. Although, customers are well aware of the extended

hours spent shopping at malls as compared to the hours spent at individual retail units however,

any alterations in the preferences are highly unlikely due to the ambiance and comfort malls

have to offer.
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Well defined assortment of shops, multiple offerings housed together fulfilling every

household’s needs, good ambience, sales promotions and comparative gains are one of the

many reasons defining the diversion of the customer traffic towards the malls. Customers are

more fond of one-stop buying and are therefore, utilizing more of shopping malls due to

numerous reasons such as: to socialize with others, amusement helps them unwind, to purchase

under one roof along with the availability of substitutes: better comparatives, promote positive

energy and so forth. People cash in on the time spent at malls even if it’s just for the sake of

wandering around and enjoying the environment. The main aspects for the client attraction

towards the shopping centers are: comfort and ease, secure transport and parking facility, well

defined timing and extended hours on weekends, etc. (Ibrahim, 2002). The enclosure of all

necessary shopping related attributes has allowed for more concentrated shopping malls

(Kaufman, 1996). Not only are the shopping centers meeting the shopping needs of the

customers but, are also addressing to their leisure needs (Ng, 2003). Every customer visit leaves

information and better evaluation criteria for the malls to enhance their offerings and services:

assuring repeat visits. As a matter of fact, both the organized and unorganized sectors are to

witness a potential growth with time due to the overall growth of the retail sector; though the

share of the organized sector is to observe a gradual increase. In light of an exploration by

Euromonitor, Pakistan is distinguished as the world's quickest developing retail advertise,

anticipating a yearly extension of 8.2% all through the period finishing 2021 with the retail

locations to increment by a half to one million amid the period (Figure 1) (Farooq, 2017).

Fostering recreational means of shopping, adding more to the choice palette and

promoting a creative lifestyle; the emergence of the organized sector (malls to be specific) is

inevitable. Shopping malls add significantly more to the business as compared to the traditional

markets – converging supply and demand. In theory, shopping malls provide a lot of benefits

over individual outlets or small stores. Using the urban development model, we see that there
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are two costs that shoppers would like to minimize: time cost and out of pocket costs. Shopping

malls have an edge over stores in both these costs. Customers usually prefer visiting multiple

shops to buy variety of goods at the prices that match their willingness to pay and therefore, a

multiple stop shopper would prefer a shopping mall over a sequence of isolated shops as this

would lower down his/her cost of the trip and everything would be available in close proximity.

The spatial concentration of malls consequently attracts more of the customer traffic, as a

result. The second benefit is comparison shopping. In malls, stores are in close proximity and

shoppers can easily compare prices of products without having to travel anywhere else. Inter-

store externalities tend to be high in malls too due to the variety of stores existing in malls.

However, not everything has only a bright outlook to it. Many brands have witnessed

stagnant turnover and declining profits. The expense of working in a shopping center is

multiple times more than that of an independent unit. As per a shopping center's lifecycle in

retail advertise, it takes around a year or 18 months for a shopping center to drive sound

incomes for its inhabitants. The increased costs and cut-throat competition mainly account for

lower sales (Farooq, 2017). Many window shoppers are witnessed as compared to the potential

ones, who primarily visit the malls to enjoy the movies and food with friends in a comfortable,

air conditioned environment. The emergence of new brands has increased the variety disposal

whereby increasing the pie size extensively while shrinking an individual brand’s share,

simultaneously.

Moreover, as far as personal preference is concerned, Packages Mall is one of the best

shopping malls that Lahore has. Built on international standards entirely, the mall offers a

modern and safe environment for spending a day out with your family and friends while

simultaneously enjoying various facilities it offers such as convenient shopping from both

national and international brands, a vast food court with multiple cuisine offerings, high-end
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cinema screens etc. Most importantly, as compared to similar malls, Packages hosts a

respectable amount and kind of crowd thus extending a relaxing and safe atmosphere for all.

Word Count: 976

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APPENDIX

Figure 1
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Works Cited

Asghar, Arooj. “Trend of Shopping Malls in Pakistan.” Pakistan and Gulf Economist, 21

May 2018, blog.pakistaneconomist.com/2018/05/21/trend-shopping-malls-pakistan/.

Baloch, Farooq, et al. “How Pakistan’s Retail Sector Went from Boom to Bust? And What

Can Be Done Now?” Profit by Pakistan Today, 4 Dec. 2017,

profit.pakistantoday.com.pk/2017/12/04/how-pakistans-retail-sector-went-from-

boom-to-bust-and-what-can-be-done-now/.

Kaufman, F. (1996). A new look at one-stop shopping: a TIMES model approach to matching

store hours and shopper schedules. Journal of Consumer Marketing, 13(1), 4-52.

http://dx.doi.org/10.1108/07363769610147848

Muhammad Ibrahim, Ng Wee, 2002, The Importance of Entertainment in the Shopping

Center Experience: Evidence from Singapore

Nurani, N. 2003. Mall with a purpose. Malaysian Business, February 1.