THE Indian retail market is possibly the fastest-growing in the world, thanks to a surging middle-class population.
At the moment, virtually all retail is conducted through market stores and streetside outlets, which accounted for 97 per cent of the $199 billion (£113 billion) that Indians spent on goods last year.
However, a rapidly growing middle-class population is driving the demand for more upmarket, Western-style retail outlets, which traditionally are located away from the high street in shopping centres.
As a result, the number of shopping malls, which were virtually non-existant only five years ago, now stands at about 90.
Analysts say that this is only the beginning. The number of shopping centres, which last year accounted for about $6 billion of sales across India, are expected to more than triple to 300 by the end of next year. The value of shopping centre sales is predicted to have risen to about $23 billion by 2010.
India’s 1.1 billion population includes about 450 million people who live below the $1-a-day poverty threshold set by the World Bank. The middle class comprises 300 million.
The middle classes are growing by 15 million to 20 million a year as the more-educated Indians benefit from 15 years of sustained economic growth, during which time the country has deregulated business and opened itself up to foreign investment. These customers are demanding better-quality retailers and products, and British and other foreign operators are keen to tap this market.
Graham Cartledge, chairman and chief executive of Benoy, an architect, which has just won the contract to design India’s largest shopping centre, said: “There is a growing number of people looking for a more sophisticated shopping experience.”
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