Think India. Think Retail.

Objective

• To profile the dynamics of modern retail

across parameters such as product

categories, brand origin, store size,

revenue in malls and shopping streets

• To provide an overview of the direction

of modern retail and its constituents,

viz. brick and mortar modern retail and

E-tail, for the next five years (2015–

2019)

Target Segment

RETAILERS

PRIVATE EQUITY FUNDS

DEVELOPERS

Framework

CITY LEVEL ANALYSIS

ZONE LEVEL ANALYSIS

• City-wise modern retail penetration including brick & mortar and E-tail

• Inter-city (7 cities) comparison on various parameters

• Product category-wise (13 categories) comparison at India level

INDIA LEVEL ANALYSIS

• Inter-zone (5-8 zones) comparison on various parameters

• Product category-wise (13 categories) comparison at city level

• Product category-wise (23 categories) comparison within

the zone

• Current and projected total retail demand in value

• Future retail market trends in the zone

Methodology • Primary survey of more than 30,000 retail outlets across Mumbai, Delhi,

Bengaluru, Chennai, Hyderabad, Pune and Kolkata

• All modern retail stores in malls and on major shopping streets have

been surveyed on parameters such as brand origin, product category and store

size/area

• Our survey has captured all stores that are occupied and operational. Vacant retail space in malls or shopping streets has not been considered

• A modern retail store is any store that provides a purchase invoice,

has a recognized foreign/national brand or has air conditioning

• Modern retail = brick and mortar modern retail + E-tail

23 categories across 7 cities APPAREL 1. Non-ethnic Menswear 2. Non-ethnic Womenswear 3. Non-ethnic Unisex Clothing 4. Ethnic wear 5. Kids wear

ACCESSORIES 6. Accessories

WATCHES & JEWELLERY 7. Watches & Jewellery

FOOTWEAR 8. Footwear

SPORTSWEAR 9. Sportswear

PERSONAL CARE 11. Eyewear 12. Salons & Spa 13. Others 14. Cosmetics

FOOD & BEVERAGES 15. Fine Dining 16. Cafes 17. QSR

BOOKS, GIFTS & MUSIC 18. Books, Gifts & Music

HYPER / SUPERMARKETS 19. Hyper Supermarkets

DEPARTMENT STORES 20. Department

Stores

ELECTRONIC 21. Electronics

ENTERTAINMENT 22. Family

Entertainment Centres

23. Multiplex

HOME & LIFESTYLE 10. Home & Lifestyle

Report Findings

Modern retail penetration stood at 19% in 2014, of which brick and mortar modern retail was at 17% and E-tail at 2% Retail spending and penetration of modern retail in 2014

NCR has the highest share of brick and mortar modern retail at 23%, followed by Bengaluru at 21%

Mumbai has only 12% of brick and mortar modern retail

Hyderabad has a whopping 90% share of non-modern retail

Occupied Brick and Mortar Modern Retail Space in 2014 (mn sq ft)

DELHI –NCR

KOLKATA

CHENNAI

HYDERABAD

MUMBAI

BENGALURU

PUNE

70.3

12.6 6.3

14.1 5.6

21.5

4.8 5.4

Bengaluru has the highest per capita penetration of modern retail, at 1,323 sq ft per 1,000 population

Per capita occupied modern retail space (space in sq ft)

Despite having the maximum occupied modern retail space, NCR ranks 4th, at 933 sq ft per 1,000 population

Modern retail space per 1,000 population

Modern retail space per 1,000 population for households earning > `300,000

Mumbai ranks the lowest, at 1,047 sq ft when the population for households earning more than `300,000 per annum is considered. Mumbai residents are the least serviced in terms of modern retail space

Mumbai fares poorly in terms of mall space penetration per capita, at just 350 sq ft per 1,000 population

Per capita occupied mall space (space in sq ft)

Mall space per 1,000 population

Mall Space per 1,000 population for households earning > `300,000

NCR ranks first in terms of mall space per capita, at 536 sq ft per 1,000 population

Hyderabad ranks last at just 193 sq ft

447 52

4

193 22

9

350

536

484

409

972 1,01

8

406

637

612

1,11

1

1,02

7

831

200

400

600

800

1000

In the high income group, NCR ranks first in mall space for households earning more than `300,000 per annum

The share of mall space is the lowest in Hyderabad with 70% of the total modern retail space present in the shopping streets Split of occupied modern retail space into malls and shopping streets

Mumbai has the highest proportion of mall space, at 59%. This is followed by NCR and Pune

Apparel is the largest product category in India, with a share of 22%

Product category split of occupied modern retail space

The top 3 categories represent around 1/2 of the total occupied modern retail space in these 7 cities

At 20% NCR has the largest share of foreign brand stores

Brand-wise split of occupied modern retail store space

The lowest share of foreign brand

stores is in Kolkata at 13%

In Mumbai, the share of local brand stores

is only 6%. However, regional brand

stores have a strong presence at 46%

Watches & jewellery is dominated by local brands in India, with just 7% represented by foreign brands

Brand-wise split in each product category

Sportswear has the highest share of foreign brands at 87% Footwear comes second with at 32%

Watches & Jewellery

Sportswear

Personal Care

Hyper Supermarkets

Home & Lifestyle

Footwear

Food & Beverage

Entertainment

Electronics

Departmental Store

Books, Gifts & Music

Apparel

Accessories

USA contributes a massive 35% of all foreign brands present in India followed by UK at 12%

Country of origin of foreign brands in India

Brands from more than 33 countries are sold through modern retail outlets in

India. However, the top 7 countries contribute towards 78% of the share in this

MUMBAI METROPOLITAN

REGION

Peripheral Western Suburbs (Vasai-Virar belt) will continue to be dominated by non-modern retail in 2019

`1,037 bn (US$ 17 bn) in 2014 to

`2,243 bn (US$ 37 bn) in 2019

Total retail spending in Mumbai is projected to grow more than double

Navi Mumbai will continue to lead in terms of modern retail penetration

2014 2019 Retail Spending and Penetration of Modern Retail

The Andheri-Borivali cluster has the maximum occupied modern retail space in Mumbai at 4.7 mn sq ft

Occupied modern retail space in Mumbai (space in sq ft)

Peripheral Western Suburbs (Vasai-Virar belt) has the least occupied space of modern retail at 0.6 mn sq ft

Bandra-Vile Parle has the highest density of modern retail space despite the absence of malls

Per capita occupied modern retail space Per capita occupied mall space

183

0

350

1,19

7

612

723

665

851

743

205

408

104

489

385

330

207

371

1,06

1

1,00

0

526

462

1,05

1

598

598

1,66

4

1,63

1

366

915

891

1,74

0

1,04

7

While 93% of Central Suburb’s modern retail is represented by malls, it is zero in Bandra-Vile Parle zone Split into malls and shopping streets

Malls

Shopping Streets

Foreign brands represent 28% of the stores in Central Suburbs, which is highest not just in Mumbai but also in India Brand-wise split of occupied modern retail store space

Local brand stores account for 50% of all stores in the Bandra-Vile Parle zone

Looking Ahead

Retail Landscape across Top 7 cities

Retail market to grow at an average annual rate of 16% from 2014-2019

with total retail spending to more than double

2014 2019

Brick & mortar modern retail is expected to grow at 11% pa, and E-tail to grow at 64% pa from 2014-2019

` bn

` bn

` bn

` bn

` bn

` bn

The top 7 cities will require an incremental modern retail space of 4.3 mn sq ft per annum during 2015-2019 Incremental requirement for brick and mortar modern retail space

NCR will require the maximum amount of incremental space during 2015-2019

By 2019, share of E-tail is expected to jump by more than 5 times, while that of brick and mortar modern retail to fall from 17% to 13% Retail spending and penetration of modern retail in 2019

While E-tail will gain primarily at the expense of brick and mortar modern retail, it will attract consumers from non-modern retail too

Factors that could create a bumpy ride for E-tail

Risk factors

While the existing occupied brick and mortar modern retail space is valued at around US$ 11.7 bn, only one E-tail company, Flipkart is valued at US$ 11 bn

Growth of E-Tail per annum 64% from `71.8 bn to `840 bn in 2014 in 2019

Logistics and supply chain ramp-up remains a challenge

Stretched valuations could undermine further investments

Success not spread to all retail product categories

Limited players thriving

Despite its scale, profitability is still distant

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