“Physical spaces are built to encourage lifestyle-oriented consumption, moving away from hard sales push. Hence, given the current retail real estate supply, there is a strong likelihood that retail spaces where experiences can be curated will be in short supply even in large cities,” said Anshul Jain, managing director, India and Southeast Asia.
Advanced consumption-oriented countries such as the US, Canada and Australia have an RSPC in double digits, with USA at 23, the highest in the world. China too has an RSPC of 5 per person. Being a large consumer market, India’s organised retail penetration is low in comparison with RSPCs range between 0.5 to around 1 per person.
“Among the large economies globally, India is forecast to be the fastest growing, with that growth being sustained over a long period. With the large and youthful population and upwardly mobile discretionary incomes, the retail and consumer sector will expand dramatically, and this expansion will need much more square footage in modern, well-managed retail spaces than exists today,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
As per IMF estimates, India’s economy is expected to surpass $5 trillion by FY27, in the process lifting 25 million households out of poverty and transforming itself into world’s third largest consumer market.
“In an expansionary consumer market, retailers will look for newer avenues to reach out to consumers through physical retail space. With India’s GDP per capita (PPP) estimated (by IMF) to grow at a CAGR of 8.2% for the next five years, India is likely to reach Vietnam’s current income levels by 2027. Given that level of income, India would have the potential spending capacity that is going to demand an RSPC equivalent to that of Vietnamese cities today,” Cushman & Wakefield said.
Both, revenues and footfalls of mall developers as well as retailers have largely recovered to pre-pandemic levels and the market has seen an exuberance. Revenge shopping started to gather steam as pandemic fears subsided, with consumers indulging themselves in shopping for precious items or luxury goods.