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600 malls set to come up by 2010

14-February-2004
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600 malls set to come up by 2010

The organised retail trade in the country is set to triple to Rs 52,000 crore by 2010, of a total retail market of Rs 2,085,000 crore, according to an ICICI Bank study based on consumer spending and retail activity.

The study said shopping malls, which would number 500-600 by the end of the decade, would drive retail growth, making up nearly Rs 38,000 crore, or 73 per cent, of organised retail trade.

Sharing excerpts from the study at the KSA Retail Summit, V Vaidyanathan, senior general manager (retail banking), ICICI Bank, said the younger generation, which was comfortable with the buy-today pay-later concept, would drive the retail boom.

“There is a big change in the profile of credit card users. The number of credit cards grew 37 per cent last year. The younger generation is taking loans that did not exist a few years ago,” he said.

Another healthy trend for retailers is that around 45 per cent of credit card spends are on consumer durables, apparel, footwear and music, products that lend themselves to organised retailing.

Currently, the Rs 15,200 crore organised retailing sector is only a fraction of the total retail trade of Rs 1,300,000 crore in the country. Shopping malls account for Rs 2,900 crore.

According to the study, besides the metros, cities like Chandigarh, Pune, Indore and Ludhiana will also see high retail activity by 2010.

In ICICI Bank's index of market attractiveness, the southern state capitals hold sway with Bangalore topping the list followed by Chennai and Hyderabad. Kolkata was the least attractive among the metros.

The overwhelming 73 per cent contribution of malls towards retailing was likely to be unique to India, the study pointed out. Even in more mature retail markets like the US, business from malls is well below 40 per cent.

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