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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
Download the complete report