– Anuj Kejriwal, CEO & MD, ANAROCK Retail
We have always given credit to the increase in per capita of the middle-class consumer and their changing preferences/choices for the unprecedented pace at which the retail industry in India is advancing.
That is indeed true!
While the first two waves of the pandemic did create a flurry, and businesses had to rethink their plans and strategies; vaccination reduced the impact in the third wave which fuelled new growth in the sector.
Change in consumer behaviour
Of course, online shopping still continues, but consumers now want to step out purely from an experience perspective where you get to touch and feel the actual product. Bottom line is online and offline will co-exist.
As consumers return to more normal shopping and socialising patterns and populate malls again, India’s retail real estate market is responding to significantly improved footfalls. Malls are again witnessing high occupancy levels, which once again reiterates the need for more organised retail space.
Alert developers & investors!
This shift in consumer behaviour and increase in real estate investment has given investors multiple options such as rent, lease, manage, acquire or sell locations, which range from shopping malls to individual businesses and even pop-up shops.
Indian retail real estate is increasingly using these trends to acquire traction, in order to improve business development and sales while also meeting ever-changing customer expectations.
Technology adoption is of utmost importance
Whether we like it or not, the fact remains that we have to embrace technology, in terms of apps, tech shopping as all these things have become part of our lives, and they are here to stay. Augmented Reality and Virtual Reality have become an integral part of brand strategy.
One of the recent reports said that globally if 30 percent of people are comfortable shopping online, that percentage in India is 57 percent. So, I feel that while technological progress will be made on all fronts, there will be a hybrid model.
Omnichannel is the new trend
Everyone is looking at the omnichannel way of doing business where you have a seamless transition from online to offline and how a hybrid model can work, which offers a new balance between convenience and experiential shopping.
Tier II and III cities in the limelight
In the next 8-10 years, I envision Tier II and III cities accounting to almost $1.5 trillion of the economy, and if that comes true, retail is surely not going to be left behind.
Why are they suddenly gaining so much importance for brands? Few key reasons are occupancy cost, profitability per store (rentals are low), low operational costs, electricity, salary range etc.
What’s the future looking like?
The Indian retail sector is being driven by sociodemographic and economic growth factors like urbanisation, income growth, and an increase in nuclear households.
According to RBSA Advisors, India’s real estate market will increase at a CAGR of 15% from $60 billion in 2010 to $1,000 billion by 2030, accounting for 13% of the nation’s GDP by 2025.
By 2023, it is anticipated that the organised retail real estate sector will grow by 28% to 82 million square feet.