The retail industry is likely to record 10 per cent annual growth to reach approximately $2 trillion by 2032.
After a prolonged period of upheaval due to the pandemic, the Indian retail sector is on the upswing lately. COVID-19 brought in new trends and created a more digital-centric consumer who expects frictionless transactions, personalized experiences, and elevated conveniences. Malls in India are now acting according to the new patterns to stay relevant and their efforts are yielding positive results.
BCG-RAI’s latest study shows that India’s consumption, which was growing at approximately 12 per cent pre-pandemic, went into negative territory during the pandemic, but now has recovered to surpass the pre-pandemic growth levels at 17 per cent. It has also predicted that the retail industry is likely to record 10 per cent annual growth to reach approximately $2 trillion by 2032.
“Today, retail industry is still far from organised and despite this it contributes the most to the Indian economy. Besides, malls play a vital role in achieving the target. From shopping to FnB, health and wellness to gaming and entertainment, malls these days cater to every segment to fulfil customer demands. The use of technology is helping retailers keep up with customers’ preferences and deliver engaging experiences online and in-store. Several retailers have focused on omnichannel strategies by blending the physical and online channels seamlessly,” said Shibu Philips, Business Head, LuLu Group International.
Elaborating further, he said, “Tier-2 and Tier-3 cities have witnessed faster evolution in growth in disposable income, mobile internet, and support infrastructure. Consumers in smaller cities have an inclination towards buying branded products and this is a good sign for generating revenues. Going by the current trends, it is safe to say that shopping malls are here to stay; they will co-exist with the e-commerce model and will hugely contribute to the success story of the Indian retail sector.”
In its report ‘Real Estate Market Outlook 2022 – India’, one of the country’s leading real estate consulting firms said that India could see a 25 per cent jump in new store openings in 2022 compared with the previous year and revenue of brick-and-mortar retailers is expected to grow with retailers expected to lease over 5.1 million sq. ft. of space in 2022, coming close to the previous two years’ combined figure of 5.9 million sq. ft.
Aman Trehan, Executive Director, Trehan Iris, said, “Despite the pandemic disruptions, the Indian retail industry has registered robust growth in the last few quarters. The strengthened market sentiments provided the much-needed fillip to the retail sector. Organized retail is a key contributor to the growth of the retail industry. Various brands are going ahead with their expansion plans and are opting for high-end malls as they continue to draw consumers’ and investors’ interest. Quickly adapting the revamped approach, developers are going one notch higher in offering an enhanced and seamless experience to the customers. Such an approach also attracts the retailers who eye high-end products for their brand establishment or expansion. Therefore, malls will continue to contribute to the growth story of the retail industry. Besides, with evolving trends finding their foot in the market, the retail industry has a promising outlook.”
Jatin Goel, Director, Omaxe Ltd, said, “The growth in consumer spending, as evidenced by the rise in credit/debit cards & digital spends, points to increased retail activity in both online and offline. More hiring and better salary hikes have prompted India’s consuming class to splurge. Temporary blips like rise in inflation, both food and fuel, may not decelerate the retail industry’s march. This growth in retail industry augurs well for the retail real estate segment which is witnessing new launches and increased absorptions in malls and high streets across geographies. Retailers and property owners have gone back to pre-pandemic contracts and overall the sentiment looks bullish.”
“The industry is bouncing back and brands started to expand immensely and are renting across high roads and shopping centers, contingent upon the areas, the closeness of the areas to their interest group, and so forth. While certain brands are leaned more towards malls, others see potential in spaces relying upon factors like area, nearness from local locations, different stores nearby, and encounters on offer, in addition to other things. Everything relies upon footfalls and customer traffic,” said Ravish Kapoor, Managing Director, Elan Group.
The retail sector has played a remarkable role in India and throughout the world in increasing productivity of consumer goods and services. Going by the current trends, it seems safe to say that shopping malls are here to stay; they will co-exist with the e-commerce model and hugely contribute to the success story of the Indian retail sector.