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April 13, 2018 www.intellinews.com I Page 12
which strongly suggests Russian shopping habits have changed dramatically.
In 2017 the turnover of Russia's e-commerce reached RUB1.04 trillion ($18bn), growing by 13% year-on-year, according to Association of Internet Trade Companies (AKIT), outpacing the growth in retail turnover, which grew 3.1% in December y/y.
The Watcom chart shows clearly the fall in traffic in the leading malls at the start of this year, which is now about half the level of 2014 and is unlikely to recover to the previous highs.
But even the shift to online shopping has been affected by Russia’s economic woes. While the e-commerce volume topped the trillion- ruble mark, the growth rate did not live up expectations and slowed almost two-fold as compared to 2016, although other studies put the growth of e-commerce at 26% in 2017.
Despite the growth of online stores, the development of new shopping malls has started to recover this year after a two-year hiatus, especially in the regions — mostly in the 11 cities with more than one million inhabitants. Almost half (48%, or 225,000 sq m) of the new
shopping mall commissioning is happening in the Russian regions in 2018, real estate consultancy CBRE said.
However, the design of new malls is also changing, with developers favouring smaller malls that have more emphasis on entertainment than stores and are closer to residential complexes as stores go more local and specialised.
And the economic uncertainties continue to weigh on retail turnover. Watcom president Roman Skorokhodov believes that the decrease of the Shopping Index this year is the result
of the weakening of consumer activity due to the unfavourable economic situation, inflation, and other factors. The real income of Russians decreased by 7% in 2017 and the index was further depressed by calendar effects, namely a four-day weekend in March due to International Women’s Day on March 8.
At the same time the change in design is also already making itself felt. Big shopping centres with a focus on entertainment generate 75%- 80% more traffic than those without, says Skorokhodov, if they have five entertainment orientated tenants and 15%-20% more with two tenants in this category, including a cinema.
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