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Urbanisation with affluency coupled with digital disruption forces online offline retailer to join hands

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With rapid urbanization of several Indian cities, there are localities within these urban cities that can be comparable with Tier II cities in other parts of the country. According to top retail experts at India Retail Forum 2018, the retail landscape is getting redefined with the affluence index and retail potential on one hand and the digital disruption on another.

According to Peeyush Bajpai, Director – Big Data Client Solutions, The Nielson Company, while the population of 2.6 million population of Mazgaon in Mumbai can be compared with Nagpur, the entire Patna city can be compared with Kandivli-Dahisar. Thane, Kalina and Andheri can be compared to Vadodara, Nashik and Meerut respectively.

These localities had three times more per capital expenditure in the fast-moving consumer goods than their counterparts compared above, but the digital disruption is fast catching up.

“Decreasing data prices and a ubiquitous mobile penetration is driving the always online consumer with attractive online deals and discounts,” said Anurag Mathur, Partner & Leader – Consumer Goods & Retail, PwC Strategy.

Convenience is making mobile the all-pervasive tool, even for payments as 50 percent of all respondents use smartphones to complete payment at a bricks-and-mortar store, Mathur said.

Over the past four years, share of e-commerce transaction over mobile has rose to 29 percent from 7 percent while Cash on Delivery has declined to 16 percent from 31 perent.

While offline and online players are shaking hands, global retail giants like Walmart, Amazon, Ikea are increasingly showing interest in the Indian growth story.

Meanwhile, the digital disruption had also impacted the brick and mortar retail malls, that had seen record supply and absorption in 2011. Since then there has been a rationalization of supply in recent years. However, the future looks promising with healthy supply pipeline and robust absorption, said Shajai Jacob, Director and Head, Marketing, JLL India.

Investments in retail in past two years dwarf those from previous 5-7 years. However, the future is promising, Jacob said.

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