Retail Shopping Development in India
May 9th 2008 12:16 pm By Web Development in India
India’s retail industry is undergoing a dramatic transformation as the masses are scampering to shopping malls and foreign investors are poised to move in ever ready to sweep them in to the retail bosom.
The Retail Attraction
India has emerged as the most attractive destination for retailers in 2007. According to the latest AT Kearney study, for the third year in a row, India leads the annual list of most attractive emerging markets for retail investment followed by Russia and China.
Retail has proved to be one of India’s largest industries, and has presently emerged as one of the most dynamic and fast paced industries with multitude of players entering the market. Accounting for over 10 % of the country’s GDP and around 8% of the employment retailing in India is gradually inching its way towards becoming the next boom industry.
Policy changes introduced by the Government in February 2005 allowed 100 per cent foreign investments in construction projects with fast-track approvals. This was the global signal and thus began a mad race with the real estate companies to join the retail shopping developers. Foreigners poured in from all parts of the world to join in this real estate-retail development gold rush. International companies from Philippines, Dubai, Malaysia, UK, US, Israel and Singapore were all investing in India’s retail development.
Another advantage to the retailing industry in India is allowing 51% FDI in single brand outlet. The government is now set to initiate a second wave of reforms in the segment by liberalizing investment norms further. This will not only favor the retail sector develop in terms of design concept, construction quality and providing modern amenities but will also help in creating a consumer-friendly environment.
India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, with organized retail industry accounting for just 3% of the country’s total retail sales, though it is poised to grow by 97% per year in the next five years to a staggering $24bn.the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline.
The Spending Generation
“…India’s middle-classes, widely traveled and with deep pockets, are flocking to malls…India’s organized retail industry…is poised to grow by 97% per year in the next five years to a staggering $24bn….in two years there will be 360 malls across the country….And it has only just begun. Developers and promoters of malls believe the face of the industry is about to dramatically change.” Source: BBC World Service,
India retail industry is reflected in its sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India.
The new culture brought in by the Tech generation has not only changed the way Indians work but also how they play. This is preeminently reflected in the contemporary retail sector development. The tech generation not only bought in gadgets and gizmos but also big and deep pockets and an eye for all things expensive. They were willing to spend for comfort and pleasure.
Though there is some truth to the fact that most malls are at the moment are being used as hang outs and for window shopping this trend is definitely changing as shopping in malls is becoming not only convenient “everything under one roof” but it is also now catering to shoppers with all sorts of budgets. In fact prices have become so competitive that you can buy things cheaper in a mall than at your local shopping store.
Shop till you Drop
27 million square feet of organized retail space is currently available. Another 90 million square feet is expected to be added by 2008 from 263 mall projects. Of these, 18 million square feet is slated to come up in Delhi as well as in Mumbai, 9.5 million square feet in Ludhiana, 6 million square feet in Chandigarh and 3.6 million square feet in Ahmedabad. Big cities or small towns to the obscure villages, retail shopping development is coming to all parts and corners of India.
With the retail sector experiencing a boom, the country is witnessing a spurt in extremely large retail spaces. Shopping malls with over 1 million sq ft of are now common In the National Capital Region (NCR), Unitech’s Great India Place has a million square feet (sq ft) of retail space. In Mumbai, at least eight malls are covering over 1 million sq ft each In Bangalore, at least three malls with similar dimensions are under development. Ludhiana will soon have a 1.6-million sq ft mall by Today Homes. The biggest mall of the world Mall of India will have 32 acres spanning a huge entertainment area and large city town squares offering a total retail experience. The Mantra here seems bigger the better
Specialized malls seems like another catching trend Gurgaon, on the suburbs of New Delhi, has a jewellery mall and will soon have an auto mall. Bangalore will get an exclusive furniture mall. Two malls targeting foreign tourists will come up at tourist hotspots–Goa and Udaipur. A furnishings mall is coming in Kolkata. And India’s largest theme amusement park, Noida Entertainment City will be absolutely colossal standing upon 150 acres approximately.
Discount malls are also on the rise. Top realtors and local retail chains are developing malls in regional areas, specifically to sell premium branded goods at prices 30 to 40 per cent cheaper than the maximum retail price. At least 50 discount malls are expected to come up in the next two years across the country, positioned in the middle-to-the-premium end of the market.
Conclusion
In the upcoming years India is set to be crowned shopping paradise, giving strong competition to Malaysia, Singapore, Dubai etc.
Rahul Boss is a promotional writer having deep knowledge of India Real Estate Developer. Now moves to Residential Real Estate India.
