The changing shape of retail in India

26 Mike Wilson Mac Cormack

Contact Mike MacCormack
mike.wilson-maccormack@benoy.com

In India, rising affluence, urbanisation and a young, fast-growing population are reshaping consumer expectations and retail trends. Here, Mike MacCormack, Head of our Newark Studio, explains how Benoy is responding.

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How would you define the retail landscape in India?

Retail in India is an interesting mix of traditional outlets and environments, such as markets, independent shops and stores, and more modern, curated highstreets and clustered retail hubs. In recent years there’s been a shift towards the latter, which is expected to account for around 20% of all retail in India by 2021, a dramatic increase from just 10% in 201617. What we’re seeing is a growing appetite for designed’ formats and experiences, such as retail villages which combine shopping, dining and entertainment. And while traditional retail will continue to play a major role in Indian consumer culture, the growth potential for what’s known as organised retail’ is huge. 

'Around 50% of India’s population is under 25. By 2022, the median age of people in India will be just 28, compared to 37 in China and the US, and 45 in western Europe.'

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What’s driving the changes you’re seeing?

Demographics and urbanisation are the main drivers. India today is home to a young, fast-growing population and an expanding middle class. Around 50% of India’s population is under 25. By 2022, the median age of people in India will be just 28, compared to 37 in China and the US, and 45 in western Europe. 

These young consumers are well educated and tech-savvy, with increasing disposable income. They’re professionals and university graduates, drawn from smaller towns and rural communities to India’s rapidly growing cities. Embracing international brands, they tend to favour shopping malls and more organised retail formats, which is driving sales in fashion, food and beverage. 

Indian family structures have also changed, with nuclear families now accounting for 70% of all Indian households. And nuclear families tend to spend around 20 – 30% more than extended families. So, we’re seeing more affluence and inclination to spend. Meanwhile, air pollution and other environmental issues are causing people to look for greener, more sustainable retail options. It’s a unique combination of factors, accelerating the shift in retail preference and consumer behaviour.

'Bricks-and-mortar retail is still strong on the subcontinent. Even with increasing digital access, only 25% of internet users in India made an online purchase in 2018, so the preferred method of shopping is still very much in-store.'

Isn’t online retail restricting the appeal of in-store shopping?

No, not really. Bricks-and-mortar retail is still strong on the subcontinent. Even with increasing digital access, only 25% of internet users in India made an online purchase in 2018, so the preferred method of shopping is still very much in-store. 

It’s also worth remembering that India’s young consumers are Millennials and Gen Zs – digital natives who increasingly relish the opportunity to meet in physical spaces and immerse themselves in real experiences. The importance of togetherness and community space cannot be overstated. Obviously, people are having to adjust their habits at present, with COVID-19 and everything that’s going on in the world, but generally in India physical interaction is key. And the communal experience provided by malls and flexible store designs is hugely attractive. 

'We’re not creating conventional or monocultural retail structures. We’re creating flexible, mixed-use buildings that overlap with people’s requirements in other areas of life, which in turn lays the foundations for great public realm.'

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As a firm of designers, how are you responding these new trends and expectations?

We start, as always, by assessing the needs and wishes of the end-user; by looking at the drivers and reasons-why that are shaping present trends and choices. Because understanding cultural nuances and generational preferences is critical. 

In this respect, our work in India’s residential sector has helped to shape our response to retail. In residential, we often refer to smart densification’, which is all about the creative use of space in overpopulated cities. We know that living space in India is reducing in size as people opt for smaller apartments in prime city locations. So, in retail we look to provide opportunities for shared space, for convenience and connectivity – providing the spaces and experiences people might be missing in their homes. 

We’re not creating conventional or monocultural retail structures. We’re creating flexible, mixed-use buildings that overlap with people’s requirements in other areas of life, which in turn lays the foundations for great public realm. In fact, mixed-use is the key; in dense city environments, integrated developments that blend residential, retail, office space and amenities provide an excellent solution for modern urban living.

In Ahmedabad, for example, we’ve created a premier mixed-use destination merging high-end residential with retail and corporate, using exposed concrete as a nod to local traditions and craftsmanship. Meanwhile in Noida, our Supernova project will blend green living with luxury modern conveniences to create North India’s tallest mixed-use development. And in New Delhi, we’ve integrated cinema, retail and residential to create the capital’s most luxurious and dynamic mall experiences – The Chanakya, which embodies our efforts to delight consumers with totally unique facilities and experiences, while maximising value for our clients. 

You’ve been working with Indian clients now for a number of years, what would you say drives that interest?

Our international exposure and experience is a real asset in India. Indian clients and developers are very well travelled. They have a global outlook. And they’re keen to tailor international best practice and successful development models to the Indian market. For this reason, they’re often excited by our future-focused research and international approach. 

Our work in Asia-Pacific and Europe is particularly relevant, especially where we’ve embraced external space and landscape. There are a lot of internally facing formats in India, so projects from our portfolio that leverage outdoor environments – such as the Beach and City Walk in Dubai – are really popular with our clients. Our work on ICONSIAM in Bangkok, with its local focus and cultural design cues, is also very relevant, as is ION Orchard in Singapore, which is an exemplar in managing a tight, mixed-use site, while integrating high transit footfall. 

As international design consultants, we offer an experiential placemaking capability that’s unique in India. We think beyond single sectors to provide a whole programme of uses, with different ways of bringing these uses – and, in the process, communities – together. In this way, we aim to create iconic destinations that will continue to enrich people’s lives, create value, and shape sustainable urban environments in this young and fast-evolving retail market.