‘E-tailing to grow manifold in next five years’

Total spending in top 7 cities is likely to more than double.

Employees sort out orders before sending them out at a warehouse on the outskirts of Mumbai. “In India, the e-tailing base is the market-place model, and its growth is being fuelled fueled by the growing middle-class. File photo: Reuters

In a testimony to the rapidly growing domestic e-tailing segment, a report expects the sector to jump by more than five times across major cities in the next five years.

While the total retail spending in the top seven cities is projected to more than double to Rs.7.65 lakh crore ($127.5 billion) in 2019 from Rs.3.59 lakh crore ($59.8 billion) in 2014, the share of e-tail is expected to grow to 11 per cent in 2019 from 2 per cent in 2014, a report ‘Think India. Think Retail’ by Knight Frank, a global property consultancy, and Retailers Association of India (RAI) said.

The seven cities include New Delhi NCR (National Capital Region), Mumbai, Kolkata, Pune, Hyderabad, Chennai and Bengaluru.

E-tailing across 23 product categories considered in the study is expected to increase to Rs.83,900 crore in 2019 from Rs.7,200 crore in 2014, a staggering compound annual growth rate (CAGR) of 64 per cent. The growth of e-tail will correspond with a decline in the share of brick and mortar modern retail as well as non-modern retail. Brick and mortar modern retail’s share is expected to decline to 13 per cent during the reference year from 17 per cent in 2014, while non-modern retail will decline from 81 per cent to 76 per cent over the same period.

According to Knight Frank India Chairman and Managing Director Shishir Baijal, “the e-commerce industry is booming like never before, and this, coupled with high disposable incomes, has led to a spurt in the Internet culture that aims to change the dynamics of the brick and mortar modern retail segment.”

“In India, the e-tailing base is the market-place model, and its growth is being fuelled by the growing middle-class,” RAI Chief Executive Kumar Rajagopalan told this correspondent.

“There are several catalysts playing concomitantly in favour of e-tail, the most significant being the strengthening ecosystem that makes buying online better every day. Increasingly, malls and high streets are feeling the heat with the growth of e-tailing,” he said.

Meanwhile, in terms of retail space, the requirement for brick and mortar modern retail in India is expected to increase 92.1 million sq. ft in 2019 from 70.3 million sq. ft. in 2014, the report says.