2.

1 | Indias Next 100 Retail Markets

I
ndias oldest organized sector retailer Bata has a
presence in 500+ cities and towns across the country.
There are World of Titan stores in 135 cities. Peter
England a value fashion brand from Madura Garments
(Aditya Birla Group) which started decades after Bata,
Five of the Top 30 cities are in Maharashtra, four each in
UP, Gujarat and Punjab (including Chandigarh, although it is
technically a Union Territory), three in Andhra Pradesh, two
each in Madhya Pradesh and Tamil Nadu, and one each in
Karnataka, West Bengal, Rajasthan, Bihar and Chattisgarh.

Indias
is also present in 117 cities. Indias largest F&B chain (by
geographical spread) Caf Coffee Day has its footprint
in 74 cities. The countrys largest hypermarket chain Big
Bazaar has a presence in 65 cities.
NCR is the thirtieth, obviously not falling in any one state.
When we compare the largest and smallest of the 30
developed markets by population, as we have said earlier,
Greater Mumbai is 22.2 times larger than Jalandhar. On

Ne xt
100
Retail
Indias Top 30 Developed Markets comprises a diverse range of cities,
from Greater Mumbai, the megacity with a population of 19.1 million, to
the relatively small city of Jalandhar in Punjab state, with a population
of only 862,200 people, or just 4.5% of Greater Mumbais population.

Markets
How many cities is Shoppers Stop present in? Where are Big
Bazaar stores present? Or, what about Titan? This research
study by Bangalore based retail spaces consultant Asipac, does
an in-depth analysis of Indias Next 100 Retail Markets, compared
with the Top 30 Developed Markets. The study will help
retailers across segments and sizes plan their store rollout
programme for the next 5-10 years.
By ASIPAC
But what about others? How many cities does Shoppers
Stop plan to have a presence in? Or rather, how many cities
can sustain a department store like Shoppers Stop? This
research study aims to do an in-depth analysis of Indias
Next 100 Retail Markets, as compared with the countrys Top
30 Developed Markets. We hope that this study will help
retailers across segments and sizes plan their store rollout
programme for the next 5-10 years, at least until the detailed
data from the 2021 census becomes available.
As the first chart shows, Indias Top 30 Developed Markets
comprises a diverse range of cities, from the global megacity
Mumbai, which has a population of 19.1 million (Greater
Mumbai) to the relatively small city of Jalandhar in Punjab
state, with a population of only 862,200 people, or just 4.5%
of Greater Mumbais population. In other words, Greater
Mumbai is 22.2 times larger than Jalandhar. In contrast, as
you will see from the second chart, the largest amongst the
Next 100 Retail Markets (Srinagar, J&K) is only 5.8 times
larger than the smallest (Hapur, UP).
It must be understood that the Top 30 are not the thirty
largest cities by population, but rather by market potential
and exisitng development status. It must also be clear that,
for the numerical part of the research and analysis, this study
only covers the demand side and does not cover the supply
side of organized sector retail space.
Before going into the main topic of this study Indias Next
100 Retail Markets we have first done a short analysis of
the Top 30 Developed Markets, to help readers get a better
perspective.
comparison of the SEC-A&B (socio-economic categories
A&B) projected population for 2015, Greater Mumbai gives a
value which is 26.5 times higher than Jalandhar.
On the other hand, when we do a comparison based on
Market Potential Value (MPV) of these 30 cities, based on
the 2009 edition of the RK Swamy BBDO Guide to Market
Planning, Greater Mumbai (with the highest MPV of 1000) is
40 times larger than the tri-city region of Raipur-Durg-Bhilai
in Chattisgarh state (which has the lowest MPV of 25.03
amongst the 30 markets).
We have also used our own proprietary methodology to
calculate the Total Retail Space Demand (TRSD, only factors
organized sector retail space, including space within malls) in the
30 developed markets, as well as the Next 100 Retail Markets.
In order to compute this, we have simply multiplied the
projected SEC-A&B population in 2015 by a practical and viable
Per Capita Retail Space (PCRS) ratio of eight (8.0) for the eight
metros and seven (7.0) for all other cities. The PCRS in USA
is 46.6, most of Western Europe between 11.2 and 17.2, and
Eastern Europe about 6.2. Against this, we have considered 7.0
(except metros, where it is 8.0) for ONLY the SEC-A&B population
in 130 urban markets, and NOT for the whole of India.
According to this methodology, Greater Mumbai will have
TRSD of 48.21 million square feet by 2015, compared to only
1.59 million square feet for Jalandhar. Thus, Mumbais retail
potential would be 30.3 times higher than Jalandhar.
Whatever the methodology used, it is quite clear that there
is a huge gap between the largest and smallest amongst the
top 30 markets.

2 . india retail report 2013 india retaiL report 2013 . 3

 2.1 | Indias Next 100 Retail Markets
Top 30 Developed Retail Markets
Rank City Population (2011 Population (2001 State/UT Actual Growth Estimated Projected Projected Estimated SEC- Projected SEC- PCRS (sft) MPV TRSD: Total Retail Total Retail Bata CCD Peter Allen Big World The Reliance
Census) Census) (2001-11) Growth Population in Population in A&B Popn % A&B Population Space Demand Space Demand England Solly Bazaar of Mobile Trends
(2011-21) 2015 2030 in 2015 (msft) as per SEC (msft) as per Titan Store
Popn. and PCRS MPV
1 Greater Mumbai 19,130,565 17,139,506 Maharashtra 11.6% 12.5% 20,087,093 23,674,074 0.3 6,026,128 8.00 1000.00 48.21 50.00 Y Y Y Y Y Y Y Y
2 NCR 15,828,138 12,901,896 Delhi 22.7% 26.0% 17,474,264 23,647,238 0.32 5,591,765 8.00 789.50 44.73 39.48 Y Y Y Y Y Y Y Y
3 Bangalore 8,425,970 5,438,065 Karnataka 54.9% 58.0% 10,380,795 17,711,389 0.35 3,633,278 8.00 254.52 29.07 12.73 Y Y Y Y Y Y Y Y
4 Hyderabad 6,809,970 3,637,483 Andhra (AP) 87.2% 40.0% 7,899,565 11,985,547 0.31 2,448,865 8.00 257.90 19.59 12.90 Y Y Y Y Y Y Y Y
5 Kolkata 9,209,301 8,782,807 West Bengal 4.9% 5.0% 9,393,487 10,084,185 0.26 2,442,307 8.00 613.19 19.54 30.66 Y Y Y Y Y Y Y Y
6 Chennai 5,751,981 5,096,296 Tamil Nadu 12.9% 22.5% 6,269,659 8,210,953 0.32 2,006,291 8.00 362.84 16.05 18.14 Y Y Y Y Y Y Y Y
7 Ahmedabad- 5,778,884 3,716,070 Gujarat 55.5% 55.0% 7,050,238 11,817,818 0.25 1,762,560 8.00 220.63 14.10 11.03 Y Y Y Y Y Y Y Y
Gandhinagar
8 Pune-Pimpri- 4,844,790 3,550,945 Maharashtra 36.4% 40.0% 5,619,956 8,526,830 0.31 1,742,186 7.00 206.51 12.20 10.33 Y Y Y Y Y Y Y Y
Chinchwad
9 Surat 4,462,002 2,433,835 Gujarat 83.3% 50.0% 5,354,402 8,700,904 0.29 1,552,777 7.00 124.45 10.87 6.22 Y Y Y Y Y Y Y _
10 Jaipur 3,073,350 2,322,575 Rajasthan 32.3% 45.0% 3,626,553 5,701,064 0.29 1,051,700 7.00 93.83 7.36 4.69 Y Y Y Y Y Y Y Y
11 Lucknow 2,815,601 2,185,927 UP 28.8% 30.0% 3,153,473 4,420,494 0.27 851,438 7.00 86.95 5.96 4.35 Y Y Y Y Y Y Y Y
12 Kanpur 2,767,031 2,551,337 UP 8.5% 15.0% 2,933,053 3,555,635 0.21 615,941 7.00 94.64 4.31 4.73 Y Y Y Y Y Y Y _
13 Vishakhapatnam 1,730,320 982,904 Andhra (AP) 76.0% 45.0% 2,041,778 3,209,744 0.28 571,698 7.00 53.43 4.00 2.67 Y Y Y Y Y Y Y Y
14 Indore-Dewas 2,250,069 1,706,640 MP 31.8% 35.0% 2,565,079 3,746,365 0.22 564,317 7.00 69.77 3.95 3.49 Y Y Y Y Y Y Y Y
15 Patna 2,405,421 2,052,066 Bihar 17.2% 25.0% 2,645,963 3,547,996 0.2 529,193 7.00 61.03 3.70 3.05 Y Y Y Y Y Y Y Y
16 Ludhiana 1,613,878 1,398,467 Punjab 15.4% 20.0% 1,742,988 2,227,152 0.29 505,467 7.00 79.29 3.54 3.96 Y Y Y Y P Y Y Y
17 Raipur-Bhilai- 1,904,463 1,394,630 Chhattisgarh 36.6% 40.0% 2,209,177 3,351,855 0.2 441,835 7.00 25.03 3.09 1.25 Y Y Y _ Y Y Y Y
Durg
18 Bhopal 1,795,648 1,437,354 MP 24.9% 27.0% 1,989,578 2,716,815 0.21 417,811 7.00 59.05 2.92 2.95 Y Y Y Y P Y Y Y
19 Vadodara 1,666,703 1,306,227 Gujarat 27.6% 33.0% 1,886,708 2,711,726 0.22 415,076 7.00 79.06 2.91 3.95 Y Y Y Y Y Y Y Y
20 Nagpur 1,683,200 1,366,444 Maharashtra 23.2% 27.0% 1,864,986 2,546,682 0.21 391,647 7.00 104.57 2.74 5.23 Y Y Y Y Y Y Y Y
21 Amritsar 1,132,761 966,862 Punjab 17.2% 30.0% 1,268,692 1,778,435 0.28 355,234 7.00 53.63 2.49 2.68 Y Y Y Y P Y Y Y
22 Nashik 1,486,973 1,077,236 Maharashtra 38.0% 45.0% 1,754,628 2,758,335 0.2 350,926 7.00 45.33 2.46 2.27 Y Y Y Y Y Y Y Y
23 Agra 1,574,542 1,275,134 UP 23.5% 26.0% 1,738,294 2,352,366 0.17 295,510 7.00 38.05 2.07 1.90 Y Y Y Y Y Y Y Y
24 Rajkot 1,286,995 967,476 Gujarat 33.0% 35.0% 1,467,174 2,142,847 0.2 293,435 7.00 43.90 2.05 2.20 Y Y _ _ Y Y Y Y
25 Chandigarh- 1,125,397 932,099 Chandigarh 20.7% 25.0% 1,237,937 1,659,961 0.23 284,725 7.00 53.12 1.99 2.66 Y Y Y Y Y Y Y _
Mohali
26 Coimbatore 1,061,447 930,882 Tamil Nadu 14.0% 20.0% 1,146,363 1,464,797 0.24 275,127 7.00 71.19 1.93 3.56 Y Y Y Y Y Y Y Y
27 Aurangabad 1,171,330 873,311 Maharashtra 34.1% 36.0% 1,340,002 1,972,520 0.2 268,000 7.00 33.28 1.88 1.66 Y Y Y Y Y Y Y Y
28 Vijayawada 1,048,240 851,282 Andhra (AP) 23.1% 35.0% 1,194,994 1,745,320 0.22 262,899 7.00 37.17 1.84 1.86 Y Y Y Y Y Y Y Y
29 Meerut 1,309,023 1,068,772 UP 22.5% 25.0% 1,439,925 1,930,809 0.17 244,787 7.00 32.80 1.71 1.64 Y Y Y Y Y Y Y _
30 Jalandhar 862,196 706,043 Punjab 22.1% 25.0% 948,416 1,271,739 0.24 227,620 7.00 39.28 1.59 1.96 Y Y Y Y Y Y Y Y

The McKinsey Global Institute (MGI) April 2010 study
titled Indias urban awakening: Building inclusive cities,
sustaining economic growth predicts that by 2030, 590
million people will live in cities, nearly twice the population of
the United States today.
As per our study, the top 130 cities will have 188.5 million
people by 2015, and by extrapolating the same population
growth figures that we have used, 257.7 million by 2030.
This means that these 130 cities will have 44.4% of Indias
urban population, if MGIs prediction comes correct.
The MGI study says that India will have 91 million urban
middle class households by 2030, up from 22 million today.
According to our study, assuming an average household size
of 3.25 persons and assuming a 50% growth in the SEC-A&B
percentage between now and 2030, these 130 cities will
have 14.4 million SEC-A&B households by 2015 and 29.6
million by 2030. We assume that middle class includes
the SEC-C population as well.
Moving on, when we do a comparison between Greater
Mumbai and Bangalore, although Mumbai comes out 3.93
times higher in MPV terms, it is only 1.66 times higher
based on Asipacs proprietary methodology of computing
TRSD. If we consider the ratio based on MPV, it means that,
if Bangalore can sustain seven Shoppers Stop department
stores, Greater Mumbai should be able to sustain about
27-28 stores. If we consider Asipacs methodology, Greater
Mumbai would be able to sustain 12 Shoppers Stop stores.
We have done one more similar comparison going by MPV,
if (and by when) the tri-city region of Raipur-Durg-Bhilai can
sustain one Shoppers Stop store, Greater Mumbai should be able
to sustain 40 stores. Based on Asipacs methodology, Greater
Mumbai would be able to sustain 15-16 Shoppers Stop stores, at
the same time when Raipur-Durg-Bhilai can sustain one.
It is left to Shoppers Stop (and other retailers) to decide
which of the methodologies is more accurate and closer to
market realities, and which one they would like to use in
planning out their future growth options.
A large population does not necessarily mean large
demand for all categories and brands. It also depends on
various qualitative factors within each city/town, such as
modernisation index, westernisation index, youth population,
etc., says Govind Shrikhande, Managing Director of
Shoppers Stop, The Indian consumer, all said and done,
will continue to be a value consumer, so the demand for
pricey merchandise will continue to have lesser depth. This
is clearly visible from the success of specific films that are
meant for the masses versus a few that are targeted towards
the young urban multiplex viewer. Some of these qualitative
factors also explainwhy cities like Ahmedabad havent been
kind to modern retail for a long time.
We also used the same methodologies and comparisons
to analyze the potential for hypermarkets. Assuming that

4 . india retail report 2013 india retaiL report 2013 . 5

 2.1 | Indias Next 100 Retail Markets
Next 100 Retail Markets Next 100 Retail Markets
Rank City Populaion State/UT Actual Estimated Projected Projected Estimated Projected PCRS MPV TRSD: Total Total Bata CCD Peter Allen Big World The Reliance Rank City Populaion State/UT Actual Estimated Projected Projected Estimated Projected PCRS MPV TRSD: Total Total Bata CCD Peter Allen Big World The Reliance
(2011 Growth Growth Population Population SEC-A&B SEC-A&B (sft) Retail Space Retail England Solly Bazaar of Mobile Trends (2011 Growth Growth Population Population SEC-A&B SEC-A&B (sft) Retail Space Retail England Solly Bazaar of Mobile Trends
Census) (2001-11) (2011-21) in 2015 in 2030 Popn % Population Demand Space Titan Store Census) (2001-11) (2011-21) in 2015 in 2030 Popn % Population Demand Space Titan Store
in 2015 (msft) as per Demand in 2015 (msft) as per Demand
SEC Popn. (msft) as SEC Popn. (msft) as
and PCRS per MPV and PCRS per MPV
31 Srinagar 1,192,792 J&K 32.8% 33.0% 1,350,241 1,940,673 17% 229,541 7.00 _ 1.61 _ Y Y Y Y P Y _ _ 81 Durgapur 566,937 West Bengal 14.9% 15.0% 600,953 728,514 15% 90,143 7.00 15.04 0.63 0.75 Y Y Y Y Y Y _ Y
32 Dhanbad 1,161,561 Jharkhand 1070.2% 25.0% 1,277,717 1,713,302 17% 217,212 7.00 _ 1.52 _ Y Y Y _ Y Y Y Y 82 Bellary 409,644 Karnataka 29.3% 25.0% 450,608 604,225 20% 90,122 7.00 _ 0.63 _ Y _ Y _ P Y Y _
33 Madurai 1,016,885 Tamil Nadu 9.5% 15.0% 1,077,898 1,306,697 20% 215,580 7.00 50.26 1.51 2.51 Y Y Y _ P Y Y Y 83 Davanagere 435,128 Karnataka 19.4% 22.0% 473,419 617,012 19% 89,950 7.00 11.69 0.63 0.58 Y Y Y _ P Y Y _
34 Varanasi 1,201,815 UP 10.1% 12.5% 1,261,906 1,487,246 17% 214,524 7.00 42.44 1.50 2.12 Y Y Y _ P Y Y _ 84 Siliguri 509,709 West Bengal 7.9% 8.0% 526,020 587,185 17% 89,423 7.00 16.63 0.63 0.83 Y Y Y _ Y Y Y Y
35 Allahabad 1,117,094 UP 14.5% 16.0% 1,188,588 1,456,691 18% 213,946 7.00 29.66 1.50 1.48 Y Y Y _ Y Y Y Y 85 Gulbarga 532,031 Karnataka 25.9% 27.0% 589,490 804,963 15% 88,424 7.00 11.50 0.62 0.58 Y _ Y _ P Y Y Y
36 Mysore 887,446 Karnataka 17.5% 25.0% 976,191 1,224,675 22% 210,857 7.00 31.90 1.48 1.60 Y Y Y Y Y Y Y Y 86 Jalgaon 460,468 Maharashtra 24.9% 25.0% 506,515 679,190 17% 86,108 7.00 13.58 0.60 0.68 Y _ Y _ Y _ _ _
37 Gwalior 1,053,505 MP 27.4% 28.0% 1,171,498 1,613,970 18% 210,870 7.00 31.08 1.48 1.55 Y Y _ _ Y Y Y _ 87 Rohtak 373,133 Haryana 30.1% 35.0% 425,372 621,266 20% 85,074 7.00 _ 0.60 _ Y _ Y Y _ _ _ _
38 Kochi (Cochin) 601,574 Kerala 0.9% 15.0% 637,668 773,023 33% 210,431 7.00 67.25 1.47 3.36 Y Y Y _ P Y Y Y 88 Malegaon 471,006 Maharashtra 15.0% 15.0% 499,266 605,243 17% 84,875 7.00 13.99 0.59 0.70 Y _ _ _ P _ _ _
39 Guwahati 963,429 Assam 19.0% 21.0% 1,044,357 1,347,837 20% 208,871 7.00 39.45 1.46 1.97 Y Y Y Y Y Y Y Y 89 Thrissur 315,596 Kerala (0.6%) 1.0% 316,858 321,592 26% 82,383 7.00 _ 0.58 _ Y _ Y _ Y Y _ Y
40 Ranchi 1,073,440 Jharkhand 26.7% 30.0% 1,202,253 1,685,301 17% 204,383 7.00 25.57 1.43 1.28 Y Y Y Y Y Y Y Y 90 Udaipur 451,735 Rajasthan 16.0% 17.0% 482,453 597,645 17% 82,017 7.00 14.67 0.57 0.73 Y Y Y _ Y Y Y Y
41 Jabalpur 1,054,336 MP 13.1% 15.0% 1,117,596 1,354,822 18% 201,167 7.00 41.96 1.41 2.10 Y Y Y _ Y Y Y Y 91 Kollam (Quilon) 349,033 Kerala (3.5%) 1.0% 350,429 355,665 23% 80,599 7.00 16.29 0.56 0.81 Y _ Y _ _ Y _ Y
42 Solapur 951,118 Maharashtra 9.0% 10.0% 989,163 1,131,830 20% 197,833 7.00 34.08 1.38 1.70 Y _ Y Y P Y _ _ 92 Jhansi 507,293 UP 32.2% 30.0% 568,168 796,450 14% 79,544 7.00 13.18 0.56 0.66 Y _ Y _ P _ _ _
43 Jodhpur 1,033,918 Rajasthan 21.5% 23.0% 1,129,038 1,485,740 17% 191,937 7.00 27.26 1.34 1.36 _ Y Y _ P Y Y _ 93 Akola 427,146 Maharashtra 6.6% 8.0% 440,815 492,072 18% 79,347 7.00 14.60 0.56 0.73 _ _ Y _ P Y _ _
44 Kota 1,001,365 Rajasthan 44.2% 40.0% 1,161,583 1,762,402 16% 185,853 7.00 22.70 1.30 1.14 Y Y Y _ Y _ Y _ 94 Latur 382,754 Maharashtra 27.6% 28.0% 425,622 586,379 17% 72,356 7.00 10.28 0.51 0.51 _ _ Y _ Y Y _ _
45 Hubli-Dharwad 943,857 Karnataka 20.1% 21.0% 1,023,141 1,320,456 18% 184,165 7.00 29.11 1.29 1.46 Y Y Y _ Y Y Y Y 95 Bokaro 413,934 Jharkhand 5.1% 6.0% 423,868 461,122 17% 72,058 7.00 13.79 0.50 0.69 Y _ Y _ P Y _ _
46 Salem 831,038 Tamil Nadu 19.3% 25.0% 914,142 1,225,781 20% 182,828 7.00 33.14 1.28 1.66 Y _ Y _ P Y Y _ 96 Rajahmundry 343,903 Andhra (AP) 9.1% 11.0% 359,035 415,779 20% 71,807 7.00 14.41 0.50 0.72 Y _ Y _ _ Y Y _
47 Trichy 846,915 Tamil Nadu 12.6% 15.0% 897,730 1,088,286 20% 179,546 7.00 32.85 1.26 1.64 Y _ Y _ P Y Y Y 97 Ahmadnagar 350,905 Maharashtra 14.1% 15.0% 371,959 450,913 19% 70,672 7.00 14.31 0.49 0.36 Y _ Y _ Y Y Y _
48 Asansol-Kulti 878,468 West Bengal 14.8% 15.0% 931,176 1,128,831 18% 167,612 7.00 42.45 1.17 2.12 Y _ _ _ Y _ Y Y 98 Gaya 463,454 Bihar 20.2% 22.0% 504,238 657,178 14% 70,593 7.00 10.23 0.49 0.51 Y _ _ _ P Y _ Y
49 Bhubaneswar 837,737 Orissa 29.3% 33.0% 948,318 1,362,998 17% 161,214 7.00 23.70 1.13 1.19 Y Y Y Y Y Y Y Y 99 Bhilwara 360,009 Rajasthan 28.5% 30.0% 403,210 565,214 17% 68,546 7.00 _ 0.48 _ Y _ Y _ _ _ Y _
50 Moradabad 889,810 UP 38.7% 40.0% 1,032,180 1,566,066 15% 154,827 7.00 18.01 1.08 0.90 Y Y Y _ P _ Y _ 100 Muzaffarnagar 392,451 UP 23.9% 25.0% 431,696 578,865 15% 64,754 7.00 _ 0.45 _ Y _ Y _ _ _ _ Y
51 Trivandrum 752,490 Kerala 1.0% 3.0% 761,520 795,382 20% 152,304 7.00 42.00 1.07 2.10 Y Y Y Y Y Y Y _ 101 Bhagalpur 398,138 Bihar 16.8% 18.0% 426,804 534,301 15% 64,021 7.00 _ 0.45 _ Y _ Y _ _ Y _ _
52 Bareilly 898,167 UP 25.0% 26.0% 991,576 1,341,861 15% 148,736 7.00 20.13 1.04 1.01 Y _ Y _ Y _ Y Y 102 Bijapur 326,360 Karnataka 43.0% 33.0% 369,440 530,988 17% 62,805 7.00 _ 0.44 _ Y _ Y _ _ _ _ _
53 Aligarh 872,575 UP 30.4% 31.0% 980,774 1,386,522 15% 147,116 7.00 18.15 1.03 0.91 Y Y Y _ P Y _ _ 103 Bilaspur 330,106 Chhattisgarh 20.1% 22.0% 359,155 468,090 17% 61,056 7.00 _ 0.43 _ Y Y Y Y Y Y Y Y
54 Jamshedpur 629,659 Jharkhand 9.9% 12.0% 659,883 773,221 21% 138,575 7.00 34.17 0.97 1.71 Y Y Y _ Y Y Y Y 104 Tirupati 287,035 Andhra (AP) 25.8% 26.0% 316,887 428,830 19% 60,208 7.00 _ 0.42 _ Y _ Y _ _ Y Y _
55 Jamnagar 529,308 Gujarat 19.3% 23.0% 578,004 760,616 23% 132,941 7.00 25.51 0.93 1.28 _ Y Y _ P _ Y Y 105 Mathura 349,336 UP 15.4% 15.0% 370,296 448,897 16% 59,247 7.00 _ 0.41 _ Y Y _ _ Y _ _ _
56 Guntur 651,382 Andhra (AP) 26.6% 29.0% 726,942 1,010,293 18% 130,850 7.00 18.91 0.92 0.95 Y Y Y _ P Y Y Y 106 Panipat 294,150 Haryana 12.4% 15.0% 311,799 377,983 19% 59,242 7.00 _ 0.41 _ _ _ Y _ Y _ Y _
57 Warangal 620,116 Andhra (AP) 16.9% 24.0% 679,647 902,889 19% 129,133 7.00 19.59 0.90 0.98 Y _ Y _ P Y Y Y 107 Shimoga 322,428 Karnataka 17.5% 17.0% 344,353 426,572 17% 58,540 7.00 _ 0.41 _ Y _ Y _ _ _ _ _
58 Mangalore 484,785 Karnataka 21.3% 25.0% 533,264 715,058 24% 127,983 7.00 25.31 0.90 1.27 Y Y Y Y Y Y Y Y 108 Hisar 301,249 Haryana 17.4% 18.0% 322,939 404,276 18% 58,129 7.00 _ 0.41 _ Y _ Y _ _ _ _ _
59 Amravati 646,801 Maharashtra 17.7% 20.0% 698,545 892,585 18% 125,738 7.00 20.50 0.88 1.03 Y Y Y _ Y Y _ _ 109 Kakinada 312,255 Andhra (AP) 5.4% 6.0% 319,749 347,852 18% 57,555 7.00 _ 0.40 _ Y _ Y _ _ Y Y _
60 Calicut 432,097 Kerala (1.0%) 1.0% 433,825 440,307 28% 121,471 7.00 35.29 0.85 1.76 Y Y Y Y Y Y Y Y 110 Chandrapur 321,036 Maharashtra 10.9% 11.0% 335,162 388,133 17% 56,977 7.00 _ 0.40 _ _ _ Y _ _ Y _ _
61 Saharanpur 703,345 UP 54.3% 37.0% 807,440 1,197,797 15% 121,116 7.00 13.31 0.85 0.67 Y Y Y _ P Y Y _ 111 Bhatinda 285,813 Punjab 31.6% 33.0% 323,540 465,018 17% 55,002 7.00 _ 0.39 _ Y Y Y Y Y _ Y _
62 Gorakhpur 671,048 UP 7.8% 10.0% 697,890 798,547 17% 118,641 7.00 16.79 0.83 0.84 Y _ Y _ P _ Y Y 112 Nizamabad 310,467 Andhra (AP) 7.5% 8.0% 320,402 357,658 17% 54,468 7.00 _ 0.38 _ Y _ Y _ _ Y Y _
63 Cuttack 606,007 Orissa 13.3% 16.0% 644,791 790,233 18% 116,062 7.00 19.54 0.81 0.98 Y Y Y _ Y Y Y Y 113 Jalna 285,349 Maharashtra 21.0% 22.0% 310,460 404,625 17% 52,778 7.00 _ 0.37 _ Y _ Y _ _ _ _ _
64 Bhavnagar 593,768 Gujarat 16.2% 20.0% 641,269 819,400 18% 115,428 7.00 23.28 0.81 1.16 _ _ Y _ P _ _ Y 114 Bardhaman 314,638 West Bengal 10.2% 10.0% 327,224 374,419 16% 52,356 7.00 _ 0.37 _ Y _ Y _ Y Y _ Y
65 Dehradun 578,420 Uttarakhand 35.6% 36.0% 661,712 974,059 17% 112,491 7.00 17.32 0.79 0.87 Y Y Y Y Y _ Y _ 115 Muzaffarpur 351,838 Bihar 15.2% 15.0% 372,948 452,112 14% 52,213 7.00 _ 0.37 _ Y _ Y _ _ Y _ Y
66 Kolhapur 549,283 Maharashtra 11.4% 15.0% 582,240 705,829 19% 110,626 7.00 20.46 0.77 1.02 Y Y Y _ Y Y _ Y 116 Alwar 315,310 Rajasthan 21.0% 22.0% 343,057 447,110 15% 51,459 7.00 _ 0.36 _ _ _ Y _ Y _ _ _
67 Bikaner 647,804 Rajasthan 22.3% 25.0% 712,584 955,511 15% 106,888 7.00 17.20 0.75 0.86 Y _ _ _ P _ Y _ 117 Ichalkaranji 287,570 Maharashtra 11.6% 12.0% 301,373 353,136 17% 51,233 7.00 _ 0.36 _ Y Y Y _ Y _ _ _
68 Nanded 550,564 Maharashtra 27.8% 30.0% 616,632 864,385 17% 104,827 7.00 14.79 0.73 0.74 Y _ Y Y P Y _ _ 118 Karimnagar 260,899 Andhra (AP) 26.9% 27.0% 289,076 394,740 17% 49,143 7.00 _ 0.34 _ _ _ Y _ _ _ Y _
69 Tumkur 396,604 Karnataka 59.3% 60.0% 491,789 848,733 21% 103,276 7.00 _ 0.72 _ Y Y Y _ _ Y _ _ 119 Rampur 325,248 UP 15.5% 15.0% 344,763 417,944 14% 48,267 7.00 _ 0.34 _ Y _ _ _ _ _ Y _
70 Sangli-Miraj & 502,697 Maharashtra 15.1% 16.0% 534,870 655,517 19% 101,625 7.00 17.86 0.71 0.89 Y Y Y _ P Y _ _ 120 Anantapur 262,340 Andhra (AP) 19.9% 20.0% 283,327 362,029 17% 48,166 7.00 _ 0.34 _ _ _ Y _ _ _ Y _
Kupwad
121 Shahjahanpur 327,975 UP 10.6% 11.0% 342,406 396,522 14% 47,937 7.00 _ 0.34 _ Y _ Y _ _ _ _ _
71 Patiala 405,164 Punjab 33.7% 35.0% 461,887 674,598 22% 101,615 7.00 _ 0.71 _ Y Y Y _ Y _ Y Y
122 Satna 280,248 MP 24.3% 25.0% 308,273 413,366 15% 46,241 7.00 _ 0.32 _ Y _ _ _ _ _ Y _
72 Tirupur 444,543 Tamil Nadu 29.0% 30.0% 497,888 697,933 20% 99,578 7.00 24.04 0.70 1.20 _ Y Y _ Y Y Y Y
123 Darbhanga 294,116 Bihar 10.0% 10.0% 305,881 349,998 15% 45,882 7.00 _ 0.32 _ Y _ _ _ _ Y _ _
73 Nellore 505,258 Andhra (AP) 33.5% 35.0% 575,994 841,255 17% 97,919 7.00 14.30 0.69 0.72 Y Y Y _ P Y Y _
124 Bihar Sharif 296,889 Bihar 27.9% 25.0% 326,578 437,911 14% 45,721 7.00 _ 0.32 _ Y _ _ _ _ _ Y _
74 Ajmer 542,580 Rajasthan 11.7% 15.0% 575,135 697,215 17% 97,773 7.00 16.95 0.68 0.85 Y _ _ _ P _ _ Y
125 Purnea 280,547 Bihar 63.4% 40.0% 325,435 493,763 14% 45,561 7.00 _ 0.32 _ Y _ Y _ _ _ _ _
75 Belgaum 488,292 Karnataka 22.2% 22.0% 531,262 692,398 18% 95,627 7.00 17.18 0.67 0.86 Y Y Y Y Y Y _ Y
126 Hospet 206,159 Karnataka 25.5% 23.0% 225,126 296,250 20% 45,025 7.00 _ 0.32 _ Y _ Y _ _ _ Y _
76 Ujjain 515,215 MP 19.7% 20.0% 556,432 710,997 17% 94,593 7.00 14.35 0.66 0.72 Y Y Y _ Y Y _ Y
127 Mau 279,060 UP 31.2% 30.0% 312,547 438,124 14% 43,757 7.00 _ 0.31 _ Y _ Y _ _ _ _ _
77 Ozhukarai 300,028 Puducherry 37.8% 38.0% 345,632 516,648 27% 93,321 7.00 16.57 0.65 0.83 Y _ _ _ _ Y Y _
128 Farrukhabad 275,750 UP 20.8% 21.0% 298,913 385,774 14% 41,848 7.00 _ 0.29 _ Y _ Y _ _ _ _ _
78 Kurnool 424,920 Andhra (AP) 57.9% 55.0% 518,402 868,961 18% 93,312 7.00 _ 0.65 _ Y _ _ _ P Y Y _
129 Raichur 232,456 Karnataka 12.1% 12.0% 243,614 285,456 17% 41,414 7.00 _ 0.29 _ Y _ Y _ _ _ _ _
79 Jammu 503,690 J&K 36.1% 35.0% 574,207 838,644 16% 91,873 7.00 _ 0.64 _ Y Y Y _ P Y _ _
130 Hapur 262,801 UP 24.0% 24.0% 288,030 382,638 14% 40,324 7.00 _ 0.28 _ Y _ Y _ _ _ Y _
80 Tirunelveli 474,838 Tamil Nadu 15.3% 15.0% 503,328 610,167 18% 90,599 7.00 16.26 0.63 0.81 _ _ Y _ P Y Y _

6 . india retail report 2013 india retaiL report 2013 . 7


There is >60% under supply of organized sector retail space in
Indias Top 30 developed markets. Obviously, the demand-supply
gap is being met by strong regional and local retailers. However,
several micro-markets within certain cities have substantial over
supply of organized sector retail space.
Greater Mumbai can support 80 hypermarkets by 2015
(based on 75,000 SEC-A&B population per hypermarket),
Bangalore would be able to support only 20 hypermarkets
in 2015 based on MPV, and 48 by Asipacs methodology.
Similarly, the tri-city region of Raipur-Durg-Bhilai can support
only two hypermarkets in 2015 based on MPV, and five by
Asipacs methodology.
The reality is that Bangalore already has 36 hypermarkets
and most of them are doing reasonably well. Since this is a
fact, does it mean that if the MPV values were the correct
indicator of market potential Greater Mumbai can actually
have 142 hypermarkets today?
Since we are on the subject of hypermarkets, it is amply
clear from our study that this is one of the most under-
supplied segment of modern retail. The Top 30 Developed
Markets can sustain as many as 626 modern hypermarkets
by 2015. Currently, there are only 256 hypermarkets in
these cities, or an under-supply of as much as 59%.
The key question is, are 370 new hypermarkets going to
open in these 30 cities in the next three years, or are the
Indian hypermarket players going to continue to under-tap
the market potential. Perhaps another argument in favour
of allowing FDI (foreign direct investment) in multi-brand
(especially food) retail.
Overall, the Top 30 Developed Markets can sustain/support
TRSD of about 352 million square feet by 2015 based on
Asipacs methodology and 254 million square feet based on
MPV. Against this demand, by the best of estimates, total
current supply of organized sector retail space is only about
140-odd million square feet.
8 . india retail report 2013
Therefore, we conclude that there is more than 60%
under supply of organized sector retail space in Indias Top
30 markets. Obviously, the demand is being met by strong
regional and local unorganized sector retailers. While this
is the overall scenario, several micro-markets within certain
cities (such as central Pune, the Whitefield area in Bangalore
and Gurgaon) have substantial over supply of organized
sector retail real estate.
Before moving on to the Next 100 Retail Markets, we would
like to comment on the supply side in the Top 30 Developed
Markets. Indias largest hypermarket chain Big Bazaar is important market like Kolkata, says Kabir Lumba, Managing
not present in three of the Top 30 cities Ludhiana (ranked
#16 by TRSD), Bhopal (#18) and Amritsar (#21). This is
certainly a missed opportunity.
All the other retailers researched as part of this study
Bata, Caf Coffee Day, Peter England, Allen Solly, The World
of Titan and The Mobile Store have a retail presence in all
30 cities, with the sole exception of Allen Solly missing from
the Raipur-Durg-Bhilai tri-city region and Rajkot, which also
does not have a Peter England store.
Indias largest department store chain by number of
stores, Shoppers Stop, has 53 stores in 21 cities, of which
three (Durgapur, Latur and Siliguri) are not amongst the Top
30. Of these, Latur has a TRSD of only 507,000 square
feet (Mumbai is 95 times larger) and an MPV of only 10.28
(Mumbai is 97.3 times larger).
In our current stage of growth, Shoppers Stop, which
is positioned in the premium to bridge to luxury space
of merchandise, is targeting the 45+ cities with a million
plus population and we are heading towards 75 stores in
30+ cities over the next three years, says Shrikhande of
Shoppers Stop, Yes, the Indian market is growing across
cities and tiers, but each brand/formathas to make a choice
about their brands connect with the consumer and then
decide the roll out plans.
Lifestyle is present in 16 of the Top 30 cities. It is not yet
present in Kolkata (ranked #5 by TRSD), Lucknow (#11),
Vizag (#13), Indore (#14), Patna (#15), Raipur (#17), Bhopal
(#18), Vadodara (#19), Amritsar (#21), Nashik (#22), Agra
(#23), Rajkot (#24), Chandigarh (#25), Aurangabad (#27)
and Meerut (#29). Of these 14 cities, Shoppers Stop is also
not present in nine (Vizag, Patna, Raipur, Vadodara, Nashik,
Agra, Rajkot, Chandigarh and Meerut).
It is unfortunate that we are not yet present in an
Director of Lifestyle, We had signed up for a property a long
time back, but the mall got really delayed. Lumba adds
that Lifestyle will have a presence in Indore, Raipur, Bhopal,
Amritsar and Chandigarh within the next six months.
So it seems like consumers in cities like Vizag (#13), Patna
(#15), Vadodara (#19), Nashik (#22), Agra (#23), Rajkot
(#24) and Meerut (#29) will have to wait for another couple
of years or maybe even longer before they can have the
pleasure of shopping at a real department store.
Lifestyles value fashion subsidiary Max is present in 28 Bilaspur (#103), Bardhman (#114) and Muzaffarpur (#115).
cities, of which 13 are not in the Top 30. This is something
that we didnt quite understand why would a value
fashion retailer such as Max not be present in key markets
such as Surat (ranked #9 by TRSD), Jaipur (#10), Kanpur
(#12), Patna (#15), Ludhiana (#16), Nagpur (#20), Nashik
(#22), Rajkot (#24), Chandigarh (#25), Aurangabad (#27),
Vijayawada (#28), Meerut (#29) and Jalandhar (#30)?
Max has missed six of the Top 20 and 13 of the Top 30
cities. On the other hand, it is present in Mysore (#36),
Jabalpur (#41), Trichy (#47), Bhubaneshwar (#49),
Trivandrum (#51), Bareilly (#52), Calicut (#60), Nanded
(#68), Durgapur (#81), Siliguri (#84) and Jalgaon (#86). It
baffles us as to how Max could open stores in cities such as
Durgapur, Siliguri and Jalgaon, before opening stores in much
larger markets such as Surat (18 times larger than Jalgaon in
TRSD terms) and Jaipur (12 times larger than Jalgaon).
Max being an international value fashion player is
naturally positioned to cater to the young aspirational lifestyle
customer in Tier II / Tier III cities, apart from metros, says
M. Vasanth Kumar, Executive Director of Max Retail, This
needs two drivers for traction - quality retail development
(mall or high street) and local white
collar service industry job creation. Consumers in cities like
While the first 100 stores of Max Vizag, Patna, Vadodara,
are happening predominantly in
the Top 20 cities, we see significant
Nashik, Agra, Rajkot and
contribution from smaller cities for Meerut will have to wait
the next 100 Max stores. for another couple of
Even though it started 3-4 years
after Max, Reliance Trends has a
years or maybe even
much larger presence - it has retail longer before they
stores in a whopping 65 cities 26
of the Top 30 and as many as 39
can have the pleasure
of the Next 100. Amongst the Top of shopping at a real
30, Reliance Trends is not present department store.
2.1 | Indias Next 100 Retail Markets
in Surat (#9), Kanpur (#12), Chandigarh (#25) and Meerut
(#29). Is there something about Surat and Kanpur that these
retailers know, but we dont?
The most common response is that either good real estate
is not available, or is too expensive. Amongst the Next
100, Reliance Trends even has a presence in towns like
According to a reliable company source, Reliance Trends will
have stores in 80 cities within the next six months.
Now let us move on to the main subject of this study
Indias Next 100 Retail Markets. The Next 100 can sustain/
support TRSD of about 73.7 million square feet by 2015
based on Asipacs methodology. Since MPV data is not
available for many of these cities, it was not possible to
compute MPV-based retail space demand. Against this
demand, by the best of estimates, total current supply of
organized sector retail space is only 20-odd million square
feet. Thus, there is almost 73% under supply.
Of the 100 cities, 15 are in Uttar Pradesh, 13 in
Maharashtra, 12 in Karnataka, 10 are in Andhra Pradesh,
seven in Rajasthan, six in Bihar, five each in Kerala and Tamil
Nadu, four each in Jharkhand, Madhya Pradesh and West
Bengal, and three in Haryana. No other state has more than
two cities in the Next 100. It must be noted that 32 of the
Next 100 cities are in South India.
Some years ago, modern retail existed only in metros
and some key cities of the South. But in the last decade,
it has reached other parts of India.. Modern retail is
gradually entering B and C class
cities and changing the buying habits
of consumers. In this decade,
many national players will enter the
untapped smaller towns and increase
the penetration of Indian modern
retail, said Anand Agarwal, MD,
Anand World, the largest department
store in Sambalpur, Orissa, a small
town of less than three lakh people,
which does not even find a place (yet)
in the Next 100 Retail Markets.
In the second chart, we have broken
up the Next 100 Retail Markets into
india retaiL report 2013 . 9

three colour-coded groups, the first group being numbers
31-60 (ranked out of total combined 130 cities), the second
group being numbers 61-90 and the third numbers 91-130.
Bata Indias largest retailer in terms of number of stores
across any category with 1300+ stores in 500+ cities and
towns across India is present in 28 out of the 30 cities in
the first group with the two exceptions being Jodhpur (#43)
and Jamnagar (#55); 27 out of the 30 cities in the second
group with the three exceptions being Bhavnagar (#64),
Tirupur (#72) and Tirunelveli (#80); and 33 out of 40 cities
in the third group. We believe that a retailer with a presence
in 500+ towns has not given a miss to the two Js (Jodhpur
and Jamnagar) in the Top 30, or to 12 cities in the Next 100
Retail Markets, out of deliberate choice.
We see a shift in focus from urban centres to tier II and III
markets. (but) back-end infrastructure has to be developed
in tier II and tier III towns, says Rafique Malik, MD, Metro
Shoes, Indias second largest footwear retailer, with 175+
retail locations (including associate retail brands Mochi and
Of the Next 100 Retail Markets in India, 15 are in UP, 13 in
Maharashtra, 12 in Karnataka, 10 in Andhra, seven in Rajasthan, six
in Bihar, five each in Kerala and TN, four each in Jharkhand, Madhya
Pradesh and WB, and three in Haryana.
Studio M) spread across 33 cities.
There is no doubt that the industry will grow by leaps and
bounds, as the purse of the middle class is going fatter and
a large chunk of the population is moving into this bracket
at a steady pace. This is the most important catalyst for
the growth of B and C class cities. There is no dearth of
consumers in Indias emerging market, which brightens the
prospects of the growth of modern retail, said Ved Vyas
Chhabra, MD, Touristor Shoes, a chain of 33 footwear stores
in Eastern India.
Caf Coffee Day, Indias largest coffee shop chain, is
present in 24 out of 30 cities in the first group, 16 out of
30 cities in the second group and only 4 out of 40 cities in
the third group. This F&B retailer has an ambitious plan of
adding 900 outlets in the next three years, by which time we
are quite certain it will fill in the gaps at least in the first two
groups.
Peter England has a presence in 117 Indian cities,
including 28 cities out of 30 in the first group. It is only
missing in Gwalior (#37) and Asansol (#48). It is also
present in 25 out of 30 in the second group and as many as
34 out of 40 cities in the third group as well. On the other
hand, another brand from Madura Garments Allen Solly
is only present in 46 cities, including 9 in the first group, 5 in
the second group and 2 in the third group.
Though it (modern retail) has got somewhat stagnant in
the bigger cities, the tier II and tier III cities are fast moving,
said Viren Shah, Director of Roopam and Roop milan, one of
Mumbais best known ethnicwear retailers.
Tier 2 cities have grown at a rapid pace. these are
rapidly coming up with malls and this trend will continue
10 . india retail report 2013
in the coming years, said Kishan Bansal, Owner, Moncher
Fashions, a local retailer in Siliguri, West Bengal.
Big Bazaar, Indias largest chain of hypermarkets, has
stores in 17 out of 30 cities in the first group, 12 in the
second group and 9 in the third group. We cant understand
why Big Bazaar has opened stores in places like Bardhaman
(#114), Alwar (#116) and Ichalkaranji (#117), before
opening stores in Ludhiana (#16), Bhopal (#18) And
Amritsar (#21). The TRSD of Ludhiana is almost 10 times
that of Alwar or Ichalkaranji.
By 2020, modern retail will stop being a story. Instead
of being restricted to some catchments and cities, it will
become mainstream and turn into a way of life, the way
kirana stores are today, says Damodar Mall, Director (Food
Strategy), Future Group.
One of the main factors, critical to the health of modern
or organized retail, is the availability of property in the right
location at the right price and this seems to be far away,
says Rajan Malhotra, Head (Retail Strategy), Future Group,
There are a lot of cities with potential for modern retail... but
our experience shows us that a bad location in a top tier city
quickly becomes a good location as the catchment around it
rapidly develops, (but the) same is not the case with some of
the smaller cities..... availability of large floor plates in smaller
cities, especially for food or hypermarket retail, is quite
low, leading to lower penetration...... the markets and the
consumers are ready even beyond the top 100 cities it is
the retailers and the marketers who have to be ready now.
Indias largest watches retailer, World of Titan, has 341
stores spread across 135 cities and towns. Titan says it is
planning to expand its presence in small towns as it has
identified the multiple benefits of expansion in non-metros,
2.1 | Indias Next 100 Retail Markets
in the form of huge demand, less competition and scope of global GDP. While 60% of the global GDP will continue to
occupying a large market share. Titans jewellery division has be generated by 600 cities in 2025 (by which time they will
164 stores across 113 cities (Tanishq 132 stores in 81 cities house 25% of the world population), the composition of these
and Gold Plus 32 stores in 32 cities). 600 top global cities will be very different in the next 13-15
The Mobile Store from the diversified Essar Group, Indias years, as the center of gravity will move strongly east and to a
first countrywide chain of retail outlets for mobile phones and lesser degree, south.
accessories, has a presence in 88 cities, including 26 in the first The scenario is not much different within India. Look
group, 16 in the second group and 16 also in the third group. at the changes that have taken place in the last 20 years.
Modern retail will go to every nook and corner of the Kolkata has moved down from the third place (in terms of
country by 2020, believes Ajit Joshi, MD & CEO, Infiniti retail market potential) to the fifth place, while Bangalore
Retail (a TATA company which owns Croma the largest has moved up from fifth to third place. NCR is fast catching
CDIT retailer in India). up with Mumbai and is most likely to overtake the Mumbai
There are a lot of cities with potential for modern retail... the
markets and consumers are ready even beyond the top 100 cities
the retailers have to be ready now, says Rajan Malhotra, Head
(Retail Strategy), Future Group.
Echoing Joshis sentiment, Sanjeev Mahajan, CEO, Spice
Retail (another large mobile phones and accessories retailer)
says: By 2020, modern retail would grow to almost 20% of
the total retail market one big push must come from the
tier B and C towns.
As per a recent article in The Economic Times, many
enterprising entrepreneurs are creating business models
targeting increasingly affluent non-metro consumers. They
are finding out that the small-town consumers are also
willing to spend, if not more, then at least as much as metro
consumers, for good quality products and services.
Supporting this theory was another recent front-page
article in Mint, which states that consumption in rural India
is growing at a faster pace than in cities and towns for the
first time in two decades. The article attributed this growth to
rise in household incomes due to various factors like greater
non-agriculture job opportunities, government-initiated
employment generation schemes, as well as migrants in
urban cities from these areas who are sending increased
remittances home to their families, leading to boosted
consumption. There is also a shift in consumption now in market by 2030, if not earlier. Chennai has dropped to the
small towns with people moving beyond necessities and sixth place (from fourth), while Hyderabad has climbed to
using products that once sold only in urban areas. the fourth (from sixth). Surat, which was not amongst the
According to a study by Nielsen, Middle India (towns with a top 20 markets twenty years ago, is now in the ninth place.
population of 100,000 to one million people), which is home Bangalore is expected to have the highest per capita GDP
to 100 million Indians, constitutes up to 20% of the countrys amongst Indian cities by 2030, more than 50% higher than
FMCG products consumption. Middle Indias FMCG products that of Mumbai.
consumption grew at 12% in 2011, while metros saw a lesser Our analysis shows that there will be quite a few changes
growth of 11.5%. in the composition as well as the ranking of the Top 30
Modern retail has been able to set its roots only in some markets by 2030. Like we said in the previous paragraph,
parts of urban India. There is still a lot of ground to cover. NCR will most likely overtake Mumbai as the #1 market in
By 2020, modern retailing would cover all the urban centres India. Bangalore will be very close to Mumbai by 2030 and
in a comprehensive manner and rural India would still be may even overtake Mumbai by 2040. Chennai will overtake
available to explore and explode, comments Vinay Nadkarni, Kolkata, which will drop further down to #6. Vizag will
MD & CEO of Globus, a chain of 25-odd fashion stores from overtake Kanpur by a wide margin and even Indore will cross
the Rajan Raheja Group. Kanpur, whose rank will come down to fourteenth place.
Globally, the 600 largest cities (which house 22% of the Nashik is likely to climb up to the Top 20 and Vijayawada to
worlds total population) generate about 60% of the total the Top 25.
india retaiL report 2013 . 11
 According to another (and more recent) MGI report titled
Urban world: Mapping the economic power of cities, half of
the global GDP in 2007 came from 380 cities in developed-
regions, with more than 20% of global GDP coming from
190 North American cities alone. The 220 largest cities in
developing-regions contributed another 10%. But by 2025,
one-third of these 380 developed-market cities will no longer
make the top 600. By 2025, 136 new cities are expected to
enter the top 600, all of them from the developing world.
Indias income pyramid has changed dramatically during the past
two decades and will evolve even more significantly. As a result,
consumption driven by choice instead of need will grow
significantly.
Delhi is expected to have the 16th highest GDP growth rate
amongst the global top 600 cities by 2025, while Mumbai
is at the 24th spot. In terms of sheer population, Mumbai is
expected to become the second largest city in the world by
2025, Delhi the fifth and Kolkata the sixth largest if we take
NCR as a whole, it will be the third largest urban region in the
world by 2025.
Global retailers (those who are present in two or more
continents) must take note. Until some time ago, it was
justified for such retailers market strategies to be focused
on developed economies. But the developed economies are
likely to generate less than 30% of global market growth in
the next 15 years.
According to this MGI report, todays 23 megacities with
populations of10 million or more will contribute about 10%
of global growth from now to 2025, below their current 14%
share of global GDP. In contrast, 577 cities with populations
of between 150,000 and10 million, are seen as contributing
more than half of global growth from now to 2025. MGI says
that emerging-market cities with populations above 150,000
together are likely to contribute to more than 45% of global
growth from 2007 to 2025.
It is estimated that by 2025, cities amongst the global top
600 which are in developing countries will have 235 million
middle-class households earning more than $20,000 a year
at purchasing power parity (PPP). Compare this with about
210 million such households in the cities amongst the global
top 600 which are in developed countries.
The MGI study finds that the population of the global top
600 cities will grow 1.6 times faster than the population of
the world as a whole. By 2025, these 600 cities will have
an estimated 310 million more people of working age, and
almost two-thirds of this new workforce is going to come from
the largest cities of China and India.
Private consumption plays a larger role in Indias economy
than Chinas, accounting for 60% of GDP in 2005, a level
Asipac has exercised reasonable care in developing the information incorporated into this report. While Asipac believes that the information
presented herein is reasonably correct, Asipac does not make any warranty to that effect. Asipac disclaims all other warranties, either express
or implied, including, without limitation, the implied warranty of merchantability and fitness. The appropriate use of the information contained in
this report requires professional business judgment and may require sourcing of additional detailed information and proper due diligence.
12 . india retail report 2013
similar to USA and Japan. By 2025, the MGI study projects
that nearly 70% of consumption in India will be discretionary
spending. In comparison, Chinas consumption share of GDP
was only 39% in 2005. However, due to Chinas higher per
capita income and population, its private consumption will be
almost double that of India in dollar terms.
The infrastructure in China is far better than India. The
cities are more organised and (organized) retail business is
not limited to a narrow radius. The government (here) has to
improve infrastructure to increase the radius of modern retail
so that new pockets get developed, said Sarat Binani, MD,
Himalaya Optical, a chain of 55 eyewear retail outlets spread
across 26 cities.
Indias income pyramid has changed dramatically during
the past two decades and will evolve even more significantly.
The MGI study finds that the number of urban households
that will join the consuming and global segments in Indias
top 177 cities could potentially increase fivefold, from just
five million households in 2007 to 25 million households in
2025. As a result, consumption driven by choice instead of
need will grow significantly.
Shoppers Stops Shrikhandhe puts in some strong words
of caution: There is clearly a large gap between demand for
space and availability of space in big cities. This is unlikely
to change and hence organised retail will have to take the
eCommerce route in a big way, if it has to really touch 10%
plus share of the total retail market. Real estate prices will
remain unaffordable in a majority of the micro markets,
making modern retail unviable. Hence, we do not see the
possibility of modern retail hitting 20% share by 2020, based
on the current reality.
In most parts of the world, the average size of households
is declining, thus leading to an increase in the number of
households. MGI expects the number of households in the
global top 600 cities to grow at 2.3 times the rate of global
population thats 250 million new households in these cities.
Indias urbanization is at a relatively early stage. Choosing the
right markets requires combining macro market intelligence with
specific market information. A strategy based on city clusters
could be an attractive option for many retailers in India, a country
with significant regional differences in market characteristics.
We at Asipac hope that this in-depth research based study
will help all large as well as midsized retailers (whether national
or regional) to review their business plans and target new
(ignored) geographies in a much more informed fashion.