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Share of organised retail space to touch 19% by 2020 in India: ANAROCK

Some 39 mn sq ft of is slated to hit the market between 2019-2022, of which roughly 71% will be in metros and tier-1 cities, the remaining in tier-2 and tier-3 cities

Vinay Umarji  |  Ahmedabad 

Representative Image
Representative image | Photo: Shutterstock

The share of organised retail space is set grow from a mere nine per cent in 2017 to 19 per cent by 2020 across top seven cities, as per real estate consulting firm

Around 39 million sq ft (msf) of organised retail space is slated to hit the market between 2019-2022, of which roughly 71 per cent will be in metros and tier-1 cities, while the remaining 29 per cent will come in tier-2 and tier-3 cities.

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As a result, tier-1 towns such as and Surat, along with Bhubaneswar, Ranchi, and Amritsar, are set to see the next chapters of the Indian organised retail saga being played out, says the latest report by Moreover, global retailers are now also eyeing cities like Chandigarh, and Jaipur for this growth.

"The hallmark of a market's increasing maturity is how organised it is -- and in any developing country, the state of 'organised' business is usually kick-started by the entry of foreign players who bring in structured deployment and wherever they go. As they catch this growth wave, mall developers and big-banner brands have grasped the utmost importance of providing a metropolitan-grade shopping experience to customers in these smaller cities," said Anuj Kejriwal, MD & CEO, Retail.

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"In these cities, customers' shopping options were previously limited to whatever was available locally. Today, they are being aggressively wooed by hyper-capitalised e-commerce giants who sensed the latent opportunity in Tier-2 and Tier-3 long before brick-and-mortar retail did."

India's organised retail share has grown from four per cent 10 years ago to nine per cent currently. However, between 2015 and 2018, investments in stood at over Rs 5,500 crore, of which almost Rs 1,300 crore came in 2018 alone, says ANAROCK.

"Foreign retailers, to whom India owes most of its turbo-charged growth in organised retail, took their time to view India as worthy of their attention. For the longest time, this country was an unattractive destination for them, largely because of regressive Government policies. All this changed when the Government decided to give a major impetus to the retail industry. By liberalising its hitherto restrictive FDI policies, it repositioned Indian retail and finally put it on the global map," said Kejriwal.

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Apart from allowing 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail under the automatic route causing global retail giants like and to foray into India, the rebooted regulatory environment post demonetisation, and implementation further allowed organised players to race ahead of the unorganised sector.

However, compared to developed and developing nations, India's share of 91 per cent unorganised retail underscores the huge latent potential that remains to be explored by organised players. For instance, in the US, 85 per cent of the overall retail market is organised while Malaysia, Thailand and Philippines have a 55 per cent, 40 per cent and 35 per cent share, respectively.

First Published: Sat, January 26 2019. 15:42 IST