Over the past two decades, organised retail has been on the rise in India, revolutionizing the shopping experience and significantly impacting the commercial real estate sector.
Luxury realtor and social media content creator, Snehil Yadav says, “With its contribution of around 10% to India’s GDP and employing approximately eight percent of the workforce, the retail sector plays a vital role in the country’s economic landscape. This article explores the growth and impact of organised retail in India, highlighting its transformative power in shaping commercial real estate and redefining the shopping experience.”
The Growth Potential of Organised Retail:
According to Kearney Research, India’s retail industry is projected to grow at an impressive rate of 9% from 2019 to 2030. The sector’s value is expected to surge from US$ 779 billion in 2019 to US$ 1,407 billion by 2026, eventually exceeding US$ 1.8 trillion by 2030. Such remarkable growth prospects highlight the immense potential and significance of organised retail in India’s economy.
Changing Demographics and Consumer Expectations:
One of the key drivers behind the rapid growth of organised retail is India’s changing demographics. With a young population and increasing disposable income, consumers are seeking new and innovative shopping experiences. Organised retail players capitalize on this trend by offering a diverse range of products and services, personalized shopping experiences, and state-of-the-art facilities to attract and retain customers.
Expansion Beyond Traditional Marketplaces:
Initially, the growth of organised retail in India focused on newly developing regions, particularly in the National Capital Territory (NCT) of Delhi, where abundant land availability facilitated the establishment of retail hubs. However, organised retail soon made its way into busy marketplaces such as Karol Bagh, South Extension, Rohini, and even the historically congested area of Chandni Chowk.
The redevelopment of these areas allowed for the integration of modern retail experiences while preserving the distinctive charm and spirit of these localities. As a result, these retail destinations began to attract a significant number of shoppers, showcasing the appeal and adaptability of organised retail in diverse settings.
Emergence of New Retail Formats:
The growth of organised retail has stimulated the development of innovative retail formats such as High Street, Mixed Use, and Shopping Complex Outlets (SCOs). These formats have gained prominence, particularly in the post-pandemic era, as they cater to the evolving needs and preferences of modern shoppers.
By offering a mix of retail, entertainment, dining, and leisure options, these formats create vibrant and engaging environments that enhance the overall shopping experience. Consequently, the demand for commercial real estate has surged, as property developers and retailers recognize the need for well-designed spaces that align with the expectations of today’s consumers.
Driving Efficiency and Innovation:
Organised retail brings with it a host of benefits for both retailers and consumers. With access to advanced technologies and efficient supply chain management systems, organised retailers can improve operational efficiency, reduce costs, and enhance profitability. Furthermore, these retailers conduct extensive market research to gain a deeper understanding of their customers, enabling them to tailor their offerings and marketing strategies accordingly. This valuable information can also be shared with individual shop owners, empowering them to refine their products and services to better meet the needs of their customers.
Transforming the Shopping Experience:
Organised retail has introduced a new era of convenience, choice, and customer-centricity in India. Gone are the days of traditional, unorganized markets where haggling and limited product offerings were the norm. Today, consumers have access to modern retail formats such as shopping malls, department stores, and hypermarkets that offer a vast array of products, services, and entertainment options under one roof.
This transformation has elevated the shopping experience to new heights, providing consumers with a seamless and enjoyable journey. Organised retail establishments focus on creating attractive and well-designed spaces, incorporating elements of comfort, aesthetics, and ambience to entice shoppers. From vibrant displays to interactive experiences, these retail spaces are meticulously curated to captivate the senses and foster a sense of delight and discovery.
Impact on Commercial Real Estate:
The growth of organised retail has had a profound impact on the commercial real estate sector in India. As retail brands expand their presence and strive to cater to the rising demand, the need for suitable physical spaces has intensified. This has led to a surge in the development of shopping malls, retail complexes, and high-street destinations across the country.
Commercial real estate developers have been quick to seize the opportunity presented by the rise of organised retail. They are increasingly focusing on creating modern, well-planned retail spaces that can accommodate a diverse range of brands and provide a seamless shopping experience for consumers. These developments not only enhance the aesthetic appeal of the surrounding areas but also attract footfall and drive economic activity.
The Positive Economic Impact:
Organised retail’s exponential growth has not only transformed the shopping landscape but has also contributed significantly to the overall economic development of India. The sector’s expansion has created a multitude of job opportunities, from sales associates and store managers to logistics and support staff. This employment generation not only boosts household incomes but also stimulates consumer spending and economic growth.
Moreover, organised retail promotes entrepreneurship and fosters the growth of local and regional businesses. Small and medium-sized enterprises have the opportunity to showcase their products and services alongside established national and international brands, enabling them to reach a broader customer base and compete in the market.
The Way Forward:
As organised retail continues to thrive in India, there are exciting prospects on the horizon. Technological advancements, such as the integration of e-commerce platforms and the adoption of digital solutions, are reshaping the retail landscape even further. The convergence of online and offline retail channels has created an omnichannel shopping experience, offering customers the convenience of shopping anytime, anywhere.
Furthermore, the rise of experiential retail, characterized by immersive experiences, personalized services, and community engagement, is poised to redefine the future of organised retail. Brands are increasingly focusing on creating memorable moments and forging emotional connections with consumers, transforming shopping trips into memorable events.
As organised retail continues to grow and flourish in India, it serves as a catalyst for transformative change in the commercial real estate sector. By capitalizing on the changing demographics and consumer expectations, organised retail provides a unique and enhanced shopping experience. The development of new retail formats and the integration of advanced technologies contribute to increased efficiency, innovation, and profitability. As India embraces organised retail, it is poised to redefine the shopping landscape and create a prosperous future for both retailers and consumers alike.