Mumbai: Delhi and Mumbai, India’s two single-largest retail markets, are the most attractive cities for international brands launching operations in the country.
Nearly 80% of international brands that launched operations in India preferred Delhi as their entry option. Mumbai followed close behind, with nearly 70% also preferring the metropolis as their entry option, said Anshuman Magazine, chairman and managing director, CBRE South Asia Pvt. Ltd, a real estate consultancy firm, in a report based on a study of more than 300 prominent global retailers—Expanding Horizons of Global Retailers in India—to identify operating trends, expansion strategies and extent of penetration across leading cities.
“The India entry strategy for most global retailers from the CBRE survey continues to be guided by the economic and demographic dynamics of leading metropolitan cities," said Magazine.
“For luxury, Delhi and Mumbai account for 80-90% of the business," said Darshan Mehta, chief executive officer, Reliance Brands Ltd, which has brands like Zegna, Steve Madden, Diesel and Superdry in its portfolio.
For premium brands too, these two remain large markets as the cities have aspirational consumers.
“They are far from saturated," said Mehta. The two cities account for 50% of Reliance Brands’ 110 stores network and of the 17 stores expansion planned this year, Mehta plans to open at least eight-nine in Mumbai and Delhi National Capital Region (NCR).
Following the two metros, Bangalore and Hyderabad besides cities like Pune, Jaipur, Ahmedabad, Chandigarh and Kolkata, have an increased percolation of global brands, said the CBRE report.
“The NCR (national capital region) and Mumbai account for a third of our overall revenues. The top seven cities, which includes Chennai, Bangalore, Ahmedabad, Pune and Hyderabad, in no particular order, account for 65% of our revenues," said Sanjeev Mehta, chief executive officer, Skechers, the US-based shoe brand which is present in 65 cities with a footprint of 300 stores through shop-in-shop and a franchise network.
Bangalore is the third-largest market, followed by Hyderabad, on the list of cities most favoured by global retailers. However, the gap between the two is fairly large, with just 66 global retailers present in Hyderabad, compared to 102 in Bangalore.
Interestingly, Chandigarh is the most penetrated city in terms of global fashion apparel brands—more than 50% of international retailers present there belong to this segment. Ludhiana and Amritsar follow close behind, said the report.
As far as global food and beverage brands (F&B) are concerned, apart from the NCR locations of Noida and Gurgaon, which have a sizeable penetration of global eating outlets, Lucknow has a large presence—nearly 25% of global brands in the city happen to be F&B brands. Lucknow is closely followed by Jaipur and Amritsar. Jaipur also has the most sizeable presence of global cash-and-carry brands—approximately 10%—in the city’s bouquet of international shopping outlets.
NCR and Mumbai have the largest concentration of malls and a majority of the upcoming new projects are based in the two cities, Mehta said, adding that this is a supply-demand issue—as and when a new project comes up in towns like Pune, Chennai or Ahmendabad, international brands do launch there.
This was seen in the past year when Elante Mall launched operations in Chandigarh, brands like Marks and Spencer, Guess, Gant, GAS, Diesel and Zara opened stores in the mall.