Online retail is projected to grow to US$ 73 billion by 2022
Retail sector attracted US$ 147.40 million investments in FY18
Organised retail penetration expected to reach 10% in 2020 against current 7%
Amazon & Alibaba are investing in offline stores – brick-and-mortar retail will survive the ‘online assault’
The Changing Dynamics of Indian Retail
The Indian retail sector is on a faster roll than ever before. Rapid urbanization and digitization, rising disposable incomes and lifestyle changes – particularly of the middle-class – are acting as booster rockets for the Indian retail sector, which is projected to grow from US$ 672 billion in 2017 to US$ 1.3 trillion in 2020.
Over the last two decades, the Indian retail market has witnessed phenomenal changes, evolving rapidly from traditional shops to large multi-format stores in malls offering a global experience, and on to the highly tech-driven e-commerce model.
These changes have resulted in unprecedented growth in overall consumption with numbers suggesting that consumer expenditure in India will rise to US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017.
There is so much talk of the death of brick-and-mortar retail as a consequence of the aggressive advent of e-commerce into the country, when the fact is that shopping malls have just got started in India – and they are definitely here to stay.
As developers learn through trial and error and come up with more winning formulas for their malls, and as retailers get more into omnichannel selling, we will see the Great Indian Mall revolution spin into its next cycle of evolution.
Why the Indian Mall Story Rocks
Unlike ‘couch potato’ e-commerce shopping, malls offer an experience… a touch-and-feel benefit which online shopping cannot. Also, going to a mall becomes an outing for the family and friends, often coupled with a meal at the food court and a movie at the cineplex.
All this in air-conditioned comfort, escalators and lifts connecting everything to the parking below, and scrupulously cleaned sanitary facilities at all levels. The massive Indian middle class loves this experience and online retail is unlikely to put malls in the shade in India anytime soon.
Over 30 new shopping malls covering 14 million sq. ft. of the area expected across top 8 cities by 2020
Indian retail pegged to grow by 60% to reach US$ 1.1 trillion by 2020
Tier 2 cities fast catching up with the metros
Rapid urbanization and digitization, increasing disposable incomes and lifestyle changes of the middle-class are leading to a major revolution in the Indian retail sector, which is pegged to grow by 60% to reach US$ 1.1 trillion by 2020.
The Government has clearly hit the bullseye by easing the FDI norms in the retail sector over the past few years. Reacting to the immense opportunities and diminishing entry barriers into the Indian retail scene, overseas retailers are now expanding exuberantly.
And it’s not just the metros they’re targeting – even tier 2 cities like Ahmedabad, Chandigarh, Lucknow and Jaipur, to name a few, are opening up for organized retail in a big way. Malls are literally mushrooming across the Indian subcontinent.