Owing to the exceptional growth of potential for global retailers amid the financial slowdown, India has once again emerged as the most lucrative market for retail sector investment. India, this time siding China, Russia, and the UAE to the corner, has caught the eye of global retail investors.
As per the official studies, India is the third-largest retail destination for global investors. It has now appeared as the most attractive spot for retail. The ranking gets computed considering multiple factors, including political and economic risk, retail saturation levels, retail market attractiveness, and the distinction in gross domestic product and retail growth. Many global investors look to buy retail spaces in India due to many factors.
So, why exactly India is the most alluring destination for retail investing and why Indian retail market is in its boom phase?
Indian Youth Spending Power
The millennials form a substantial portion of the total consumer pie. Retailers benefit from the spending habits of millennials who increase the value of their brand and drive sales. India consists of 65% youth who spends majority sizeable portion of their funds in the Indian retail market. How?
- Electronics- 11.2%
- Eating out & Entertainment- 32.7%
- Apparels and Fashion- 21.7%
The more the youth, the more the spending power, and the more the spending power- The more the need of retailers to satisfy the diverse needs of customers. Among all the cities, retail spaces best commercial projects in Noida are the highest queries demanded by people.
The rising share of millennials & young customers in India’s retail market, linked with growing digital diffusion, is expected to change the current dynamics in the next seven years. India has the highest number of young generations who invest in the Indian retail market, much higher concerning what other countries young people spend.
The Need for Retail Shops
Backing up the above claim: the youth mostly head out to spend their cash at Malls and places of entertainment. Malls are the most popular destination where shoppers flock for a multitude of shopping needs. Owing to this, the need for retails spaces is much higher in India due to the new trend of spending money more on Mall’s outlets. This, in turn, caught the eye of global investors who wants to invest in India to buy retail spaces in India.
Although, Noida is considered the top city for finding the best commercial projects in Noida in the country are high in demand.
New FDI Policy
According to IBEF, India is soon to become the world’s third-largest consumer economy, touching INR 27.95 lakh cr. (US$ 400 billion) in consumption by 2025. Owing to the aggressive participation of the foreign and private players who gives a boost to the Indian retail market.
The Government of India has initiated many reforms to attract FDI in the Indian retail market. It has approved 51% FDI in multi-brand retail & 100% FDI in the single-brand Indian retail market via the automatic route, which is assured to give a boost to Ease of Doing Business and Make in India schemes, with plans to allow 100% FDI in E-commerces. So, any global investors looking to buy retail spaces in India can do so with much ease.
Over the years, consumer purchasing power has increased due to readily available credit. It has given a push to higher value items along with promoting repeated purchases. Also, the consumer mindset has started to change. Now, the buyer is more informed, educated and ready to try & buy new products. The middle-class expansion has increased the purchase of luxury goods and brand consciousness. Hence, luxurious brands now tend to incline on Indian retail market for investments to buy retail spaces in India.
According to Statista official reports, casual dining restaurant is the largest segment having the most market shares in dining portion. Further, around 30% Indian population prefer to dine out in cafes and restaurants; much more than the stats of 2017 i.e. 24%. The growing pace of people going out to dine is contributing largely to the expansion of the food retail sector. Considering this, many multinational food chains like Popeyes (entered a contract with Jubilant for opening their franchise or retail shops in Noida & India) are soon to launch their outlet in India which will mark these as the best commercial projects in Noida.
Change of Buyers Age Profile
As stated earlier, India is assumed to have a higher young population than any other nation. Two-third of the Indian young generation is under the age of 33 with a median of 23 years. While nations like the US & China have an age median of 32 years. A large population of the young generation in India is working-class, making it a lucrative consumer base. As higher the income group- the higher the purchasing power. Hence, India is always on the radar of global investors for retail investment and many best commercial projects in Noida are soon to launch.
A country consisting young population is the prime choice of global retailers and inclined to have more aspirations plus higher spending power once reach the earning phase.
The Emergence of Nuclear Family
The disintegration of families into nuclear families has pushed the demand to buy residential property in India; including daily use items demand. It is the biggest push for the retail sector to satisfy the increasing demand of retail – the need to buy retail shops is important. The more the demand to buy residential property, the more the demand to buy retail spaces will increase. India being at the fastest pace of modernization is thus a valuable asset for global investors.
Rise in Disposable Income
With a growing number of earning groups and more than one bread earner in the family, the demand for goods and services is enhancing. Further, the youth favours more on “buy big live good”, so, they spent a large amount on durable goods. So, big brands tend to find ways to buy retail space in India. Considering this, many new commercial projects in Noida are soon going to launch.
For instance– Buying an iPhone amongst the youth is considered a sign of status symbol resulting in the demand for Apple phones among youth more in India. Considering this, Apple is soon to launch its own manufacturing plant in India because of a substantial increase in the demand for iPhones.
Not only this but buying branded clothes and electronic gadgets now becomes more of a lifestyle than just a necessity. Hence, the demand to buy retail spaces in India is higher.
Need for Global Brands
Customer demands are changing and shifting towards more international standards. The demand for global brands in India is higher, in recent years, due to an appreciation in quality living standards. Big brands like UNIQLO and H&M have already set up their successful retail stores in Noida & overall India. Likewise, many global brands have kept an eye on the Indian retail market to buy retail spaces spot with big numbers.
Also, the increasing demand to buy residential property in India has attracted big brands to settle around the residential properties to increase their sales. Many best commercial projects in Noida for big global brands are already established or yet to launch.
Growing CAGR Rates:
India’s retail market will be touching the $1.1-1.3 trillion mark by 2025, with a (CAGR) growing compound annual growth rate of 9-11%. This rate gets derived by the economic and socio-demographic points like urbanization, income growth & rise in nuclear families. With the power of the Indian retail market and looking at its growth rate, the Indian market nevertheless is a valuable weapon of investment for global investors to buy retail spaces and to buy residential property in India.
Availability of Skilled Labors
A crucial reason why global investors take keen into the Indian retail market is the skilled labour availability. India produced the largest skilled labour at the lowest cost. Abundant raw material, cheap cost skilled workers, presence over the value chain and growing domestic market signifies the importance of this industry. Now, India has an enormous resource of skilled & talented labour. Hence, the demand to buy retail space is higher due to this factor.
Taking the above considerations, India is thus, a great asset for global investors looking to invest in the Indian retail market. The market is growing exponentially paving way for investors to easily utilise their funds and assets for building their retail brand value in India. So, it is safe to say, Indian retail market is one of the leading countries when it comes to retail sector investment and to buy retail spaces.
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