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E-tail spending to grow 10 times with 64 percent annual rise

By Sujata Sachdeva

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In its first report on India’s retail sectors, ‘Think India Think Retail’, Knight Frank and the Retailers Association of India estimate that retail spending across the top seven cities would more than double in the next five years. And it would be driven by e-commerce with e-tail spending touching Rs 839 billion by 2019. The report was prepared after mapping India’s modern retail market across top seven metros. It points reveals apparel occupies 22 percent share in modern retail, where NCR contributes 27 percent followed by Bangalore.

It says the advent of e-commerce has had a huge negative impact on malls and high streets with a rising number of consumers choosing online medium for their shopping needs. Modern retail penetration in the cities surveyed stood at 19 percent in 2014, of which brick and mortar retail was 17 percent and e-tail 2 percent. However, the report points out that e-tail spending is expected to grow 10 times from Rs 72 billion to Rs 839 billion resulting in 64 percent annual growth. As of now, penetration of e-commerce is highest in the NCR region at 3 percent followed by Mumbai at 1 percent.

Currently, the total retail spending in the top seven cities of India amounts to Rs 3,586 billion with Mumbai leading the pack at 29 percent followed by NCR and Bengaluru at 25 percent and 15 percent respectively. Bengaluru has the highest per capita penetration of modern retail in India, at 1,323 square feet per 1,000 population; followed by Pune and Chennai, at 1,002 and 1,001 square feet per 1,000 population respectively with Kolkata at the bottom of the list. Hyderabad has the maximum share of stores below 500 square feet as compared to Bengaluru and NCR. Mumbai represents the highest proportion of mall space at 59 percent followed by NCR and Pune, while Hyderabad slots the highest position with 70 percent in shopping streets.

Knight Frank
Retailers Association of India