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Mumbai tops retail potential with Rs 1,050 billion
08
Feb '16
At Rs 1,050 billion, the Mumbai Metropolitan Region (MMR) has the highest potential for modern retail in India, according to global real estate consultancy firm Knight Frank India's second edition of its flagship report on the retail sector – 'Think India. Think Retail. 2016'.

MMR's potential offers big opportunities for retailers across all four product categories – apparel, F&B, entertainment and daily needs, the report said.

Brought out in association with Retailers Association of India (RAI), it looks into the emerging trends in multi-channel retailing, shopping centers and new formats. As part of the city-level analysis, the report identifies zone level supply-demand gap for apparel, F&B, Entertainment and Grocery across India's top three cities of Mumbai Metropolitan Region (MMR), National Capital Region (NCR) and Bengaluru.

The report says that the retail expenditure of the MMR, at Rs 1,214 billion, showcases the region's potential for modern retail in the coming years.

The MMR's modern retail penetration is set to increase from the current 13.5 per cent to 50 per cent by 2036.

While the market potential of F&B category is Rs 70 billion, daily needs (supermarkets/hypermarkets) is pegged at a steep Rs 588 bn.

According to the report, Island City has the highest potential for modern retail penetration in the apparel category while Andheri-Borivali zone has the highest annual modern retail potential of Rs 178 billion.

The National Capital Region (NCR) follows MMR with Rs 779 billion potential for modern retail. But NCR surpasses Mumbai and Bengaluru in the total modern retail expenditure that stand at Rs 269 billion. It also has the largest customer base for retail across all seven urban centres, making it an ideal catchment for retail.

The Knight Frank report says Bengaluru has a potential for Rs 486 billion of modern retail, which augurs well for the growth of modern retail.

Bengaluru has the highest per capita annual modern retail expenditure, at Rs 16,191, across all seven urban centres, making it an ideal catchment for retail. 

Dr. Samantak Das, Chief Economist & Director of Research, Knight Frank India says, “This huge potential can be explored by the retail sector, provided a befitting policy framework for the modernisation of the sector is implemented by the relevant authorities.”

The report also found that modern retail penetration in India is extremely low at 19 per cent compared to US, Singapore and China which are at 84 per cent, 71 per cent and 63 per cent respectively.

Sixty nine per cent of the total retail spending comes from MMR, NCR and Bengaluru out of the top 7 cities, the report said. (SH)

Fibre2Fashion News Desk – India

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