Hyderabad retail market was pegged as the fourth largest retail market back in 2016 leaving behind cities like Pune and Chennai. Fast forward to today, the Pearl City is an even bigger retail market than before.
No wonder, the fact of Hyderabad’s soaring retail scene was a part of 26-year-old Nethra’s rebuff when her South Delhi resident aunt tried to cajole her to come over to the capital for her wedding shopping spree.
“Cikkam’ma, I have the best offers, stores, and options here in Hyderabad city, whether they are the old retail haunts, new mall brands or e-commerce. Besides, for the décor of my new home, I have my sights on IKEA and guess what? Hyderabad hosts the only store in the country!” The aunt was suitably miffed but she could not say one word to counter Nethra.
Our country’s retail format is in varied forms, from local stores to retail chains and then is the well-adapted and flourishing e-commerce sector. According to the report by Malls of India, the country is the fifth largest retail market currently and is poised to take over as the world’s third largest consumer market by the year 2025. With changes in business and investment policies, growing GDP, urbanization growth, penetration of internet and online shopping, etc. the purchasing power of an average Indian has increased and so has his retail participation.
Hyderabad Retail Industry’s Scorching Growth
A stable economic environment is driving the growth of the retail market and amidst all these Hyderabad retail market has evolved as the apple of the eye for the industry. The city of Hyderabad has growing retail spaces per capita for every 1,000 citizens and the south and west zones of the city are testimony to this fact with ever more mall spaces on the anvil. Hyderabad’s total retail spending has been forecasted to increase from Rs 319 billion in 2014 to Rs 692 billion in 2019, which means a growth rate of 17%.
The second quarter of 2019 saw many international brands like Ximi Vogue, MG Motors, Taneira, etc. make their presence known in the city. Along with these smartphone brands, automotive brands and popular retail brands are poised to enter the city and make their mark in the retail sector.
Today, the locations of Banjara Hills, Jubilee Hills, HITEC City, Kukatpally and others like Sarojini Devi Road/SD Road, Himayatnagar represent the best and most popular retail hubs in the Hyderabad market. The IT corridor, with its premium office spaces and posh residential locations, translate to a thriving retail environment that will continue to grow in the coming years.
The Mall Story
Hyderabad’s major shopping malls like Inorbit Mall, Forum Sujana Mall, Sarath City Capital Mall, and GVK Mall are melting pots for attracting both consumer spending as well as domestic and international brands. Hyderabad has been one major contributor towards the revival of the mall space in the country with at least 358 new leases or at least 500,000 sq. ft. of mall spaces in the first half of the last year. The city is expected to get 12 new malls by 2021 which will almost double the inventory of mall spaces from its current count. This means that from 4 million sq. ft. at present, Hyderabad malls would cover at least 6.5 million sq. ft. area. The areas that will receive major additions in mall space are Secunderabad and Uppal, among others.
Factors Favouring the City
Hyderabad has a truly cosmopolitan vibe and a fantastic urban infrastructure situation. This unique combination attracts industries, brands and eventually a modern working population that utilizes the employment circuit to increase their spending power and thus, fuels the Hyderabad retail sector in turn. It is a self-fulfilling cycle that is well in motion in Hyderabad.
Amazon has its largest delivery centre or logistics base in the city and this means a campus with that many jobs. The opening of IKEA’s first-ever store in India in Hyderabad further strengthened the growth of the retail industry in the city. When established and popular global giants such as Apple, Uber, H&M, Forever 21, GAP, etc. chose this city it just goes to show the diversified retail base.
There are many reasons behind the scorching pace of growth of Hyderabad retail sector. For one, Hyderabad is a major technology and IT hub, which means it is home to a fast-growing community of high-income professionals and thus, potential customers.
This has a direct impact on the residential development in the city, which has spurred the high-income group to choose Hyderabad as home, adding to the cosmopolitan vibe and to the high buying power of residents.
With the influx of a young population, Hyderabad is turning into a fast-developing metropolitan with international brand recognition. As a result, the real estate activity in the city has also seen a spurt in commercial spaces that will generate employment and attract more potential customers.
But the major push that has turned the tide in the favour of this city has definitely come from the government. Post the new state formation, the stable political and economic environment has attracted investors. Plus, industry-friendly policies have further strengthened the city’s reputation as a viable investment destination.
E-commerce and Retail Are Not Mutually Exclusive in This City
Despite e-commerce growth, the Hyderabad retail industry hasn’t slowed down. One of the main reasons behind this is the great office segment of the city which has increased the per capita income. This scenario makes the retailers competitive and the demand for retail space equally aggressive. Agreed, that e-commerce makes shopping easier but the prominence and popularity of high streets in the city are still mushrooming. The number of consumers has increased and the diversified segments ensure that both e-commerce and retail flourish.
Moving forward, Hyderabad retail industry will take this sharp pace of growth to higher levels with many more international retail stores coming on-board. This will cause a ripple effect and the city will see development in sourcing chains and strengthen supplier linkages. All these added together will fuel continued growth in the retail sector and have a powerful impact on the economy.