India’s retail industry is poised for exponential growth, with private consumption projected to expand to $4.5 trillion by the end of the decade, according to a a survey-based joint report by Deloitte India and the Shopping Centre Association of India (SCAI) titled “Recognising malls and shopping centres as a new-age industry”. The report stated that mall and shopping centres account for a significant share of the organised brick and mortar retail sector. This segment, it said, is expected to grow at a rapid pace, with a projected ~17 per cent CAGR from 2022 to 2028, outpacing the overall growth of the retail pie.
Per the report, one of the top reasons for consumers to visit malls includes shopping (82 per cent), watching movies (73 per cent), dining (56 per cent), and leisure outings with friends and family (56 per cent). Additionally, other reasons contributing to footfalls of the malls include gaming zones (22 per cent), festival celebrations (18 per cent), activities and play areas for children (11 per cent), concerts/shows (10 per cent), and exhibitions (8 per cent).
In 2022, malls and shopping centres accounted for about 12 per cent of the overall retail market in India, contributing about 1.2 per cent to India’s GDP. The shopping centre industry plays an important role in driving economic growth and fostering employment opportunities with an annual revenue of approximately Rs 1,80,000 crore, employment opportunities for 1.2 crore people, and tax contributions of Rs 35,000 crore.
Rajat Wahi, Partner, Deloitte India, said, “As India sets its ambitions to head towards a $5 trillion economy, the potential role of shopping centres in our nation’s growth has to be emphasised. Through the findings of this joint report, Deloitte and SCAI have attempted to illustrate the potential that this Industry holds.”
“In addition to generating revenue for the economy, shopping centres also contribute to the development of the country’s social infrastructure and give both foreign and native businesses a platform to access the Indian market. These centres serve as essential catalysts for India’s economic change,” he added.
Mukesh Kumar, Chairman of Board of Directors, Shopping Center Association of India (SCAI), said, “Growth of retail and shopping center industry over the 10-15 years has been phenomenal. Shopping Centers have turned out to be a catalyst for retail growth in the country. Developers have been very bullish about developing malls not only in tier-I and tier-II cities but also moving to tier-III & -IV. With 275 to 300 million sqft already operational and another 35-40 million sqft getting operational in the next 18-24 months, the industry is adding quite a lot to the economy. It is very important to highlight the strengths of this industry and how it is adding to the growth of India story. White paper is an attempt to highlight some of the salient features.”
According to the report, nearly 50 per cent of India’s shopping mall stock is concentrated in eight major cities: Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, the National Capital Region (NCR), and Pune. While NCR has the highest share of malls amongst the top eight cities at 34 per cent, Mumbai is at 18 per cent and Bengaluru at 17 per cent.
Furthermore, the report stated that malls are also expanding to tier-II and -III cities due to lower rental rates and operating costs, contributing to retail growth in India. Between 2006 and 2017, these cities received $6.2 billion in overall retail investments, becoming pivotal contributors to the country’s retail growth. The report highlights the scope for further evolution of malls and shopping centres in India. “With a continued focus on advancements, malls and shopping centres will further incentivise global brands looking to enter the Indian market, to collaborate with local manufacturers. This will further support manufacturing by generating employment opportunities and contributing to the overall growth of the country’s economy,” it said.