Indian Economy News

According to Deloitte- Shopping Centre Association of India (SCAI) report, Shopping centre industry to grow at ~17% from 2022 to 2028, emerging as catalyst for economic growth

Private consumption in India is expected to increase to US$ 4.5 trillion by the end of the decade, according to a survey-based joint report by Deloitte India and the Shopping Centre Association of India (SCAI) titled "Recognising malls and shopping centers as a new-age industry." This indicates that the country's retail sector is poised for exponential growth. According to the research, the organised brick-and-mortar retail sector is dominated by malls and shopping centers. According to the report, this sector would outpace the retail market's overall expansion from 2022 to 2028, growing at a projected 17% Compound Annual Growth Rate (CAGR).

As per the report, one of the top reasons for consumers to visit malls includes shopping (82%), watching films (73%), dining (56%), and leisure activities with friends and family (56%). Additionally, gaming areas (22%), festival celebrations (18%), children's play spaces and activities (11%), concerts/shows (10%), exhibitions (8%), and gaming zones (11%).

In 2022, malls and shopping centers made up around 12% of India's total retail market and contributed 1.2% of the country's GDP. With an estimated yearly income of Rs. 1,80,000 crore (US$ 21.63 billion), employment opportunities for 1.2 crore people, and tax contributions of Rs. 35,000 crore (US$ 4.20 billion), the shopping center business contributes significantly to economic growth and the creation of employment opportunities.

According to Mr. Rajat Wahi, Partner, Deloitte India, the potential contribution of shopping malls to India's economic development must be stressed as it sets its sights on a US$ 5 trillion Gross Domestic Product (GDP). Deloitte and SCAI have tried to demonstrate the potential of this industry through the published report.

He further stated that shopping malls not only help the economy by bringing in money but also help build the social infrastructure of the nation and provide a platform for both foreign and domestic companies to enter the Indian market. These institutions are crucial drivers for India's economic transformation.

Mr. Mukesh Kumar, Chairman of Board of the Directors, Shopping Center Association of India (SCAI), stated that over the past 10 to 15 years, the retail and shopping center industries have experienced extraordinary growth. The country's retail industry has grown because of shopping centers. Developers are highly confident about building malls in tier-III and tier-IV cities in addition to tier-I and tier-II cities. The industry is contributing significantly to the economy, with 275-300 million square feet now active and an additional 35-40 million square feet expected to go online in the next 18-24 months. It is crucial to emphasise this industry's advantages and how they contribute to the development of India's history. An effort is made to emphasise some of the important aspects in a white paper.

The report further stated that in eight main cities: Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, the National Capital Region (NCR), and Pune, over 50% of India's retail mall stock is concentrated. Among the top eight cities, NCR has the greatest percentage of malls (34%), followed by Mumbai (18%) and Bengaluru (17%).

The report also mentioned that malls are also expanding to tier II and tier III cities due to lower operating and rental expenses, which is helping India's retail industry thrive. These cities saw a total investment in retail of US$ 6.2 billion between 2006 and 2017, and they played a significant role in the country's retail expansion. The paper emphasises the potential for malls and shopping complexes in India to continue to develop. "Malls and shopping centers will continue to provide incentives for international brands trying to join the Indian market to work with local manufacturers as long as improvements are the focus. By creating job possibilities and boosting the nation's economy, this will help manufacturing even more.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.