Come the weekend, I find myself with my family at one of the malls in Mumbai. Not long ago parents used to take their children to a high-street, visit two or three stores and shopping would be over usually in an hour!
Retail in India has changed a lot, and quickly too. Earlier, vendors carried their goods to our neighbourhood; now we visit stores, and there are increasing virtual e-retailing visits. The goods had a long life and it was acceptable to use pre-owned or inherited stuff. Today’s generation follows the “use and throw” concept, and being in vogue matters.
Be it lifestyle, innovations and inventions, or the socio-economic fabric, India’s youth are living one of the fastest and most diverse transformations, and retail is no exception. Retail properties are testimony to the change in retailing. Shopping centres in at least the big cities are constructed and managed to give convenience with experience, leading to a celebration beyond just a transaction. We now have more than 50 international luxury brands, and people and properties are equally pampered with the best in class customer care and facilities management.
India moved from one mall to more than 300 malls spread over 7 million sqm in just 14 years; by 2030, more than 1,000 malls will cover close to 25 million sqm. This looks possible, as India has moved from 34 cities with at least a million people in 2001 to the current number of 53 “million plus” cities[1], and by 2030, the number will cross 100[2]! India’s retail market has grown from USD 80 billion in 1998 to USD 440 billion[3] today, and will reach USD 2 trillion in 2030.
Figure.1: Growing footprint of retail real estate in India
Source: JLL Research, Oct 2014
Numbers above bars refer to number of malls
The share of organised retail in overall retail stands at 7% today, and with 3 sq ft per capita of organised retail space[4], India is moving steadily towards a bigger, mature, organised retail sector. The bigger malls under construction (average size per mall of 600,000 sq ft compared to the current 300,000 sq ft)[5] are taking us closer to mature markets sooner than some of us might imagine.
There have been challenges, and learnings too. Developers rightly stopped strata selling. They, alongside retailers have been sensitive to the requirements of local people, shown resilience and collaborated with each other better. Revenue share is as common as fixed rent, newer smaller stores in high footfall areas have made good sales, formats are evolving constantly and logistics are improving, but a few concerns remain. India’s retail space is costly, growth in retail is not matched by supply of quality space, and there is a degree of uncertainty about policies.
More global retailers are entering India with a “global + local” approach. Retailers are employing multi-channel sales, experimenting with size and format, e-retailing and penetrating newer territories. I see further changes in the way India will shop, and I am ready to continue this interesting journey, which is at a crossroads.
India, 2011
[2] Various forecasts by government agencies, academia, statistical organisations
[3] Yes Bank – Associated Chambers of Commerce and Industries of India (ASSOCHAM) Report, 2013
[4] ASSOCHAM Report, 2013
[5] JLL REIS, 2014
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