National average RSPC: Stands at a mere 2.7 sq ft per person
Cushman & Wakefield's recent study has brought to the spotlight a growing concern of a significant shortage of retail space per capita (RSPC) in the great Indian booming retail sector and brings to the fore the critical need for greater expansion in retail infrastructure to address aspirational Indian society, quite notably how global brands are making a beeline at burgeoning India retail market positioned presently as a 'last Fashion Luxury frontier'.
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Comparative analysis; India’s RSPC is much lower than the US, and China's, as things stand the US RSPC is around 20 sq ft per person whilst China stands at around 5 sq ft per capita.
National average RSPC: The report estimates India's national average RSPC to be at a much lower level of 2.7 sq ft per person, though at this level too it signifies growth traction but still no running away from the fact it is far short of the existing global standards only speak volumes of headroom growth retail sector is likely to enjoy going forward.
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Datapoints- There is a great delta between India & BHARAT; Many Indias in India given city-wise disparities one witness here, although we see a secular trend across Metro cities fairing far better with RSPC and figures of like Delhi and Mumbai 3.2 and 4.1 sq ft per person, respectively is a testimony.
Whilst, if one were to pencil in on the Tier-II and Tier-III cities it is a compression zone trailing considerably; however, here it has to be mentioned that rapid urbanization and spurt in disposable incomes and emerging neo-middle class in these cities are driving the demand for retail space to shape a brighter future.
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Meanwhile, let us harp on how metros like Mumbai attribute a high RSPC, and what is fundamental to this rationale is being a mature retail market, robust consumer spending, and already being flooded by the presence of a flurry of international brands. Anshul Jain, Managing Director, India & South East Asia, Cushman & Wakefield says, "India's retail sector is at an inflection point, with strong growth potential. The increasing RSPC in major cities is a testament to the sector's resilience and the rising consumer demand."
Cushman & Wakefield's study draws the attention of the stakeholders of the retail sector per se highlighting a spot of bother that current RSPC constraints are speedbumps for both local and global brands soliciting to expand or set up shops in the Indian market and constrained space availability impedes the potential and scope of growth retail sector has before it.
There are cases where a bevy of international brands have been hesitant to enter India due to the scarcity of suitable retail locations which is worrisome posing challenges to the pan-India expansion of a score of brands that typically will be shy of having a ferocious roadmap they have lined up before them all due to the scarcity of large-format retail spaces.
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The report projects that India's retail sector will continue rapid growth in the coming years that is the sanguine forecast most of the reports have, though there is a caveat one has to place on the table that the Goldilocks growth scenario is severely likely to be impacted unless there is a substantial increase in retail space availability.
The report further anticipates/forecasts that India needs an additional 150-200 million sq ft of retail space if it were to accommodate the growing aspirations of both existing and hopeful domestic and international brands.
It categorically underpins the critical need for increased investments in the development of Grade-A malls and likewise other retail formats across the nation giving impetus not only to the growth of existing brands but also to create an enabling foundational environment for international brands to establish a strong presence in India in the coming years.