NEW DELHI: The advance of online retailing is changing the face of India's retail landscape at bewildering speed says a new report that expects its share to grow fivefold in the next five years.
Think India. Think Retail, a study from property consultant Knight Frank, was based on a survey of more than 30,000 retail outlets across 23 categories in seven cities – Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Pune and Kolkata.
This found that online retail's 2% share of the overall retail market in 2014 was set to grow to 11% by 2019 to reach a value of Rs 839bn ($14bn). Over the same period total retail spending in these cities was forecast to more than double to Rs 7,650bn, the Economic Times reported.
"The e-commerce industry is booming like never before and this, coupled with high disposable incomes, has led to a spurt in the internet culture that aims to change the dynamics of the brick-and-mortar modern retail segment," said Shishir Baijal, managing director of Knight Frank India.
The share of the modern retail sector is projected to slide from 17% to 13%, and the much larger non-modern sector will also feel the winds of change, as it share falls from 81% to 76%.
But these are lower shares in a larger market and Knight Frank estimated there was a requirement for an additional 4.3m square feet of retail space every year across the seven cities considered.
"There still exists a significant number of reputed retailers who believe in the latent strengths of the brick and mortar retailing methods and, going forward, will continue to invest in this segment," observed Aditya Sachdeva, director/Retail, Knight Frank India.
Those investments are likely to be targeted at a new breed of mega-mall. Inside Retail Asia charted the decline of smaller malls built only ten or 15 years ago, with at least ten closing or being converted into office space in the past two years and many more under threat.
These might be around 120,000 square feet compared to new malls whose average size is 500,000 square feet while the biggest are more than 1m square feet.
"Initially, malls exist in monopoly conditions," according to Rajan Malhotra, president/retail strategy at Future Group. "The moment bigger and better malls come up in the same locality, shoppers go there."
Think India. Think Retail, a study from property consultant Knight Frank, was based on a survey of more than 30,000 retail outlets across 23 categories in seven cities – Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Pune and Kolkata.
This found that online retail's 2% share of the overall retail market in 2014 was set to grow to 11% by 2019 to reach a value of Rs 839bn ($14bn). Over the same period total retail spending in these cities was forecast to more than double to Rs 7,650bn, the Economic Times reported.
"The e-commerce industry is booming like never before and this, coupled with high disposable incomes, has led to a spurt in the internet culture that aims to change the dynamics of the brick-and-mortar modern retail segment," said Shishir Baijal, managing director of Knight Frank India.
The share of the modern retail sector is projected to slide from 17% to 13%, and the much larger non-modern sector will also feel the winds of change, as it share falls from 81% to 76%.
But these are lower shares in a larger market and Knight Frank estimated there was a requirement for an additional 4.3m square feet of retail space every year across the seven cities considered.
"There still exists a significant number of reputed retailers who believe in the latent strengths of the brick and mortar retailing methods and, going forward, will continue to invest in this segment," observed Aditya Sachdeva, director/Retail, Knight Frank India.
Those investments are likely to be targeted at a new breed of mega-mall. Inside Retail Asia charted the decline of smaller malls built only ten or 15 years ago, with at least ten closing or being converted into office space in the past two years and many more under threat.
These might be around 120,000 square feet compared to new malls whose average size is 500,000 square feet while the biggest are more than 1m square feet.
"Initially, malls exist in monopoly conditions," according to Rajan Malhotra, president/retail strategy at Future Group. "The moment bigger and better malls come up in the same locality, shoppers go there."
Data sourced from Economic Times, Daily News Analysis, Inside Retail Asia; additional content by Warc staff
