On any given Sunday, the 1,000-car parking lot at Crossriver Mall is full. Shoppers, unable to find parking here, have parked their cars on the pavement, and even on the road leading to the mall. Many of these cars are premium sedans from Japanese car makers such as Honda Motor Co. and Toyota Motor Co.
The top floor of the 250,000 sq.ft mall, which houses a bowling alley and a gaming parlour, is filled with young people, mostly dressed alike and sporting brands such as Levi Strauss, Benetton and Reebok. Fashion designer Ritu Kumar has an outlet in the mall, as do regulars such as Pantaloon, Sony and The Dollar Store.
That’s pretty much like a scene from any of the malls across India, where developers and retailers are building and stocking outlets at a frenetic pace to cater to a rising demand in a strong economy that is estimated to grow by over 8% this year.
Only, the Crossriver Mall is in East Delhi, long considered one of the capital’s poorer locales, looked down upon by residents who live in, say, South Delhi or increasingly in suburbs such as Gurgaon.
But according to a recent study by Delhi-based research firm Indicus Analytics, East Delhi—with a market density of Rs149 crore per sq. km—is now the most attractive and “concentrated” market in the country. The data is part of Indicus’ Market Skyline 2006-07, a database that tracks consumption-related statistics for all of India’s 593 districts.
East Delhi, which covers a 64 sq. km area and is separated from New Delhi by the Yamuna river, is home to 1.8 million people (Delhi has a total population of about 17 million and counting).
According to the study, the market size of East Delhi, as defined by its annual household consumption expenditure, is Rs9,511 crore. At Rs149 crore per sq. km, East Delhi’s market has the highest concentration of spenders and spending per sq. km—double that of Hyderabad and Kolkata and 70% more than Mumbai.
Laveesh Bhandari, director at Indicus, isn’t surprised that East Delhi has come out on top in the study. According to him, the data proved “India’s growth story lies out there, in the suburbs.”
The number of people in the area whose primary source of income is agriculture or land holdings is only 7,700 (of 1.8 million). He claims that this decline is because people with land holdings have sold them to tap into the real-estate boom that has gripped Delhi and most parts of India in the past three years.
Incomes from such sales have supplemented those from salaries, said Bhandari.
Mint set out to look at what makes East Delhi the new hotbed of retail consumption, an area where developers such as the Suncity Group—which owns Crossriver Mall—and retailers claim, despite a lot of scepticism, as among the most happening markets in the country.
Retailers claim they have known this all along. “I have always maintained that East Delhi is a consumption belt and that’s where the masses are. It is one of the top five business centres we have all over India,” said Mayur Toshniwal, vice-president and head of northern region, Pantaloon Retail (India) Ltd.
Crossriver Mall is one of the two that Suncity owns in New Delhi. Its chief executive (commercial) Basant Sharma said the East Delhi mall attracts around 10,000 people every day on weekdays and 15,000 over the weekend. And that is “despite having only one anchor (store), the Pantaloon apparel one”, he added.
According to the study, 94% of East Delhi’s residents earn in excess of Rs1.5 lakh a year. And more than a third earn more than Rs3 lakh. India’s per capita gross domestic product is around Rs35,000.
“Over the past two decades, East Delhi started developing as the colony of first choice for migrant white-collar workers,” said Sanjay Chandwani, professor, marketing, Management Development Institute, Gurgaon, and a long-time resident of East Delhi. “It used to be perceived earlier as the outlier. But over the past decade, it has also become the home of prosperous, thriving areas like Preet Vihar, Surajmal Vihar and Gagan Vihar.”
Partha Sarathi Mitra is the archetypal East Delhi resident. He is 40, works as a chief technical officer for Indo-Asian News Service, a newswire, at a salary of about Rs7 lakh a year, and has been staying in Dilshad Garden for more than a decade now. His wife, a homemaker, and 13-year-old son are delighted that the malls are coming up so close to their home.
“Now, we get all the brands that we want right next door, while earlier we had to travel to Connaught Place. The (Delhi) Metro’s arrival and the government’s decongestion plan have helped immensely,” said Mitra.
Marketers typically look at non-food consumption as a measure of a family’s (or household’s) spend on clothes, leisure activities, consumer products and durables, and other such. According to the Indicus study, the per capita annual non-food expenditure per household in ast Delhi is Rs30,000, with 91% of households having an LPG connection, the second highest in the country, 88% a TV set, the fifth highest, and 60% a telephone, which is the third highest.
But the market is an attractive one for companies that are in the food retailing business too. Navneet Saluja, Reliance Retail Ltd’s chief executive, operations for Delhi, the NCR & Haryana, said: “A significant part of our business in the NCR comes from East Delhi. We have five Reliance Fresh stores there, and we plan to open many more.” One of Reliance’s hypermarkets will come up in Mayur Vihar. Saluja added that East Delhi accounts for 30% of the sales that the fast-moving consumer goods companies register in the entire city.
Although East Delhi’s average urban per capita income is eroded by people belonging to lower-income and poor households to Rs82,000, still third among all of Delhi’s nine districts after Central and Southwest Delhi. East Delhi is also India’s fifth-biggest market in terms of per capita consumer expenditure and seventh in buying vehicles.
Rajan Chibba, CEO of Intrim Business Associates, a Delhi-based marketing consultancy, said economic progress had touched almost all groups in East Delhi. Intrim helped produce a recent study on retail by the Confederation of Indian Industry, India’s biggest industry lobby group.
“A large number of people there have been self-employed professionals, who have benefited immensely from the economic boom of the last 10-15 years. So has the small business class which has gone for service industry agencies. Even the lower-middle class has seen a steady increase in its income by about 30-40% in the past few years.”
Bhandari of Indicus said that Delhi as a whole has seen per capita income rise by 15% on an average over the last four-five years.
East Delhi’s neighbours Noida and Ghaziabad (both in Uttar Pradesh) have seen real estate prices soar as residential developments and retail establishments fight for space. And part of this boom is fed by East Delhi residents. “Almost 80% of the clients (at our stores in Ghaziabad and Noida) are from East Delhi,” said Toshniwal of Pantaloon Retail. “Most of the shoppers are from Mayur Vihar and the Preet Vihar.” he added.
In Gautam Budh Nagar, the Uttar Pradesh district of which Noida is a part, non-food household expenditure constitutes 45% of the total, compared with 57% in East Delhi. According to the Indicus study, Noida has a market density of Rs64 crore per sq. km and Ghaziabad, less than Rs5 crore per sq. km.