The Indian retail market is on the brink of a significant upswing, with 41 million square feet of retail space slated to open across seven major cities from 2024 to 2028, according to a study by JLL India. Delhi-NCR leads with 34% of the total supply, followed by Chennai at 20%.
Recent trends show a surge in leasing activity, especially in fashion and apparel, reflecting growing consumer confidence. Technological advancements and experiential retail are reshaping the landscape, offering personalized experiences and hassle-free services, promising an exciting chapter in India’s retail journey.
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The physical retail market in India is gearing up for a substantial boost, with nearly 41 million square feet of retail developments set to become operational between 2024 and 2028 across the nation’s seven major cities. These developments represent projects currently in various stages of construction or active planning, according to a recent study by JLL India.
Leading the pack in terms of projected retail space is Delhi-NCR, expected to claim 34% of the total supply, followed closely by Chennai with 20%. Bengaluru and Hyderabad are anticipated to each account for 15% of the supply, showcasing the widespread expansion of the retail landscape.
In a snapshot of recent trends, the year 2023 witnessed a remarkable 8.7 million square feet of gross leasing activity across malls and prominent high streets in the top seven cities. Bengaluru emerged as the frontrunner in gross leasing, capturing 33% of the share, followed by Delhi NCR at 18%, and Mumbai at 17%. This surge in leasing activity reflects growing consumer confidence translating into tangible expansion efforts by retailers keen to bolster their store networks and drive sales.
Unsurprisingly, fashion and apparel dominated the leasing landscape, commanding a hefty 40% share of the total volume. The super value and value fashion segments, in particular, attracted significant attention from major retailers, with many launching new formats and expanding within this segment. Other notable contributors to leasing volume included food and beverage (16%), entertainment (13%), home and furnishing (6%), and daily needs and grocery (5%).
Furthermore, the year 2023 saw a notable influx of international brands into the Indian market, with a total of 14 new entrants – a substantial increase from the figures recorded in 2022 and 2021. Of these, a majority (8 brands) chose to inaugurate their maiden stores in Mumbai, with the food and beverage segment emerging as the top choice for new entrants in Delhi NCR.
With such robust growth projections and evolving consumer preferences, India’s retail sector is poised for dynamic expansion and innovation in the coming years, marking an exciting chapter in the country’s retail journey.
What feeds the Indian retail dynamics?
The retail market observed a decline in foot traffic of up to 51% during the peak COVID-19 lockdown, however, early 2023 data showed a month-on-month increase as compared to 2022. As we step into 2024, the retail market is set to boost even more, as technology and experiential retail have taken over traditional and simple displays and several established retailers offer services like:
- Customers can purchase personalized products through touchscreens and virtual reality experiences.
- The popularity of workshops, chef demonstrations, art exhibits and product launches have proved to attract shoppers and create a sense of community and excitement.
- Many retailers offer spaces for socializing, and co-working that foster brand loyalty.
- The use of strategic lighting, music and aromas impact mood and create a comfortable atmosphere for the customers.
- Several retail shops offer Smart mirrors to recommend clothing based on individual styles, technologies like Augmented reality (AR) that enable customers to virtually try makeup, accessories etc. reducing purchase hesitations.
- Many large stores offer points on each purchase, leading up to significant discounts later on that encourage them to keep visiting these stores.
- Contactless and hassle-free payment options like Google Pay, UPI etc. have also added to the convenience of the shoppers.
The Indian retail market is primed for significant growth, with extensive developments underway across major cities. Delhi-NCR, Chennai, Bengaluru, and Hyderabad are poised to witness substantial expansion, reflecting the dynamic nature of consumer preferences. The surge in leasing activity, particularly in fashion and apparel, underscores the evolving retail landscape. Furthermore, the influx of international brands signals the market’s attractiveness on a global scale. With technological advancements and experiential offerings driving consumer engagement, India’s retail sector is on the brink of innovation, promising an exciting journey ahead fueled by evolving dynamics and consumer-centric strategies.
