Chennai is renowned for its home-grown large format showrooms specialising in textile products such as silk sarees. Few of these players continue to specialise in textiles while others have now diversified themselves as hyper markets.
Until recently, most of these large showrooms were anchored in and seen only expanding within T Nagar; Chennai’s Prime shopping destination. Now, with the city’s rapid expansion, these domestic players have been forced to extend their presence to emerging locations.
Expansion beyond T Nagar allowed these retailers to be closer to consumers, as well as offer their customers a better shopping experience.
Chennai’s home-grown retailers have evolved over the past few decades, confronting various challenges from deep-pocketed national and international players. In the current mobile era availability of affordable data plans, which given e-commerce businesses easy access to the mass Indian middle-class consumer market, this has fuelled aggressive competition among retailers.
While high-value products such as silk sarees and jewellery are relatively unaffected by the online marketplace, the impact of e-commerce is visible in the electronics and home appliances segment. Mobile dealers like Poorvika are countering the competition by not only expanding and moving closer to their customers, but also reinventing themselves by challenging online prices in-store. Likewise, home appliance retailers are following similar strategies of expansion and competitive pricing.
In the grocery segment, while online players such as Big Basket are busy raising funds to gain penetration, brick-and-mortar players are already a step ahead. Smaller stores adopt a single brand approach delivering a wide range of products to fulfil consumer needs.
In emerging locations, unorganised retailers are well established to provide daily grocery requirements, while in established residential locations they are becoming more organised to keep up with competitors. Home-grown grocers like Pazhamudir Nilayam and Ooty Vegetables are actively expanding their footprint while also giving way to the rapidly upcoming organic and health food stores.
Within the F&B segment, food aggregators such as Swiggy and Food Panda are helping F&B operators gain market penetration and promote the frequency of dining-out. At the same time, to gain in-store dining frequency, fine dining and café operators have introduced more themed restaurant experiences, ranging from haunted place simulations, jungles, prisons and more futuristic restaurant themes where robots are seen serving foodies, to more novelty restaurants that employ and empower the differently abled of the city.
Experiential retail – a new opportunity in real estate
Increased disposable income among city dwellers has been instrumental in the expansion of experiential retail in the city. Activity centres and indoor gaming places such as Zeezoo, Turf 137, Rush and Kick-off have witnessed active expansion in the city in recent times.
Organised spas as well as fitness and yoga studios are other experiential categories that are opening up new opportunities for the retail real estate sector. As a rule of thumb, better services, more conveniences and new experiences are an integral part of the expansion strategy of retailers in Chennai and will continue to be so for a long time.
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