Seen as a key player in the retail sector, Lucknow leads with 18.4 per cent share. Other Tier 2 cities include Kochi, Jaipur, Indore and Kozhikode
Tier 2 cities across India are increasingly becoming key players in the nation’s retail sector, with Lucknow emerging as a standout contender, commanding an 18.4 per cent share of gross leasable area, as per a report by Knight Frank India.
The report underscores the growing significance of Tier 2 cities as retail hubs, attributing their rise to factors such as economic growth, expanding employment opportunities, rising disposable incomes and the widening reach of ecommerce into smaller markets. Consequently, these cities are now pivotal drivers of growth for the real estate sector, attracting substantial investments and development ventures.
Apart from Lucknow, other Tier 2 cities that have made significant contributions to the shopping centre stock include Kochi, Jaipur, Indore and Kozhikode.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented, “India’s retail landscape is a fascinating amalgamation of factors, shaped by its vast population, strides in digital literacy, and economic expansion. These elements converge to propel the growth of the retail sector, with particular emphasis on the evolution of retail spaces into multifaceted hubs of commerce and entertainment.”
However, the report points out that the development of shopping centres in Tier 2 cities have followed a distinct trajectory compared to Tier 1 markets. While Tier 1 cities witnessed the establishment of shopping centres as early as the 1990s, Tier 2 cities saw their emergence only in the early 2000s, resulting in the prevalence of relatively smaller shopping centres in many Tier 2 cities.
Nevertheless, signs of progress are evident. While 16 Tier 2 cities still boast shopping centres sized below 0.1 million square meters, only 5 Tier 2 cities have centres exceeding this threshold. The shift towards larger and more robust retail infrastructure in Tier 2 cities signifies the sector’s next phase of growth in India.
In recent years, the Indian retail landscape has undergone notable transformations, characterized by trends such as revenge shopping, influencer marketing, and strategies tailored for Generation Z. These trends have reshaped traditional shopping experiences, fostering unique and immersive environments for consumers.
Despite challenges posed by the pandemic, the retail sector is displaying resilience, with a diverse landscape and a widespread presence of brick-and-mortar stores across the country.
