New Delhi – Global brands have significantly bolstered their position within India’s retail sector, now accounting for an impressive 25% of retail space during the initial quarter of fiscal year 2024. This marks a substantial increase from the mere 14% observed in the same period of the previous year.
Data sourced from CBRE, a leading real estate services and investment firm, highlights a remarkable surge in retail leasing by international brands. Notably, there has been a surge of 1100 basis points during the June quarter of this year in comparison to the corresponding period of the preceding year. This substantial growth contrasts with the gradual expansion strategies employed by domestic retail giants such as Aditya Birla, Reliance, and Tata. The surge in leasing activity among global brands is attributed to both established retailers and newcomers to the market.
The retail leasing landscape has experienced a notable uptick, with retailers securing a total of 1.3 million square feet of retail space. The fashion and apparel sector spearheaded this growth, capturing a significant 33% share, followed closely by the food and beverage sector at 18%.
The luxury, home, and departmental store segments jointly held an 11% share, while the consumer electronics sector contributed 7% to the leasing activity. Among the lessees, domestic companies led the way with a commanding 75% share, followed by retailers from the Asia-Pacific region at 12%. Europe, the Middle East, and Africa (EMEA) followed with a 10% share, and the Americas secured a 3% share.
Industry experts forecast that the influx of international brands into the Indian market will continue to expand across various categories throughout the year. Particularly noteworthy is the projected robust growth within the luxury segment. With one of the highest global growth rates, India has emerged as the favored destination for brands seeking to expand in the EMEA and APAC regions. Over the past few years, numerous American brands have shown keen interest in India’s thriving retail market.
Anshuman Magazine, Chairman & CEO of CBRE India, South-East Asia, Middle East & Africa, commented, “Approximately two dozen international brands are poised to establish their presence in India this year, driven by the surge in post-Covid consumption.” This marks a significant increase from the solitary global brand that entered the market in 2020 and the limited annual entries prior to the pandemic.
Samant Jerath from Jerath Properties, a prominent retail consultancy firm, emphasized, “Evolving consumer preferences in India are propelling the expansion of global brands in terms of sales and store presence. The role of social media has been instrumental in amplifying this shift. As this trend continues, the market share of global brands is set to increase further.”
Renowned international names such as the Italian luxury fashion brand Roberto Cavalli, British luxury goods brand Dunhill, and American sportswear and footwear retailer Foot Locker are actively discussing plans to establish their presence in India. Additionally, Lavazza and Armani Caffè from Italy, Jamba from the US, and The Coffee Club from Australia are also expected to make their entry into the Indian market this year.