The East Indian retail market has been on a growth trajectory since the evolution of new Millennials population. Analysts have attributed this upward swing to the evolving middle-class, rising disposable incomes and growing aspirations for improved living standards, especially among the Millennials.
The region is at the cusp of transforming from a traditional customer base into a brand conscious, product-savvy market. Its young generation is shopping and demanding both fashion and quality along with value for money spent from retailers…
There is a new entrant on the leading retail regions’ list in the country – East India. The region, comprising of West Bengal, Bihar, Odisha, Jharkhand, Chhattisgarh and Assam has shown great potential in as far as the retail industry is concerned if the recent growth and development is anything to go by. No longer a silent observer in the retail race, East India is breaking all barriers to emerge at the top of the retail game, across all channels. Kolkata – the third-largest metropolitan area in the country and also the capital of Bengal – is the proud face of East Indian retail.
Some of the growth drivers of the region include a burgeoning, aspirational population, the proximity of Bangladesh – a country of 13 crore+ consumers – as well as the South-East Asian markets. Another reason why the region is fast emerging as a vibrant business center is the fact that the Kolkata and the Haldia portsact as gateways to landlocked countries like Nepal and Bhutan.
Cities like Durgapur, Bhubaneswar, Patna, Ranchi, Jamshedpur, Bokaro, Guwahati, Cuttack, Siliguri, Brahmapur, Rourkela, Sambalpur, Puri, Bhagalpur, Gaya and Muzaff arpur are rapidly following in Kolkata’s footsteps, gaining ground as retail hubs.
Many of these urban areas are already in the process of becoming smart cities (an urban renewal and retrofitting program by the Government of India) which in result poses a major opportunity for the retail industry to create new milestones.

1. What Research Says

The Eastern region, home to 27 percent of the country’s population, contributes ~16.5 percent of the GDP.
As per a report published by KPMG, the eastern regional states are expected to contribute at least 25 percent of the country’s GDP by 2035. West Bengal leads the eastern region GSDP pie share by 39 percent, followed by Bihar at 18 percent and Odisha at 15 percent. The region has a direct influence on over 30 percent of the Index of Industrial Production (IIP) by weight and 57 percent of the core industries. The region was heavily dependent on the informal sector, with the MSMEs being the highest contributing segment in the industrial output. Annual per capita income in the eastern region had been on a steady rise. With the exception of West Bengal, all the other eastern states accrued a major portion of their GVA (Gross Value Added) from the rural segments.
A report by the domestic rating agency Smera Ratings says the critical location of Bengal makes it the potential business hub of a $3 trillion regional economy by 2035, when the size of National GDP is likely to touch $11.34 trillion.


East India retail has been considered a conservative market for decades. However, modern retailers have passed this barrier long back and the current east market is doing exceptionally well in all retail sector. The market has been on a growth trajectory since the evolution of new Millennials population. Analysts have attributed this upward swing to the evolving middle-class, rising disposable incomes and growing aspirations for improved living standards, especially among the Millennials.
“From the retail perspective, East India is very promising and is in the nascent stages as far as modern retail industry trends are concerned. The market has a huge potential to grow. It is slowly getting used to the latest trend and is showing an increase in buying power and affinity towards good brands,” says Amit Dharap, Regional Head East, Titan Company Ltd.
Devansh Binani, Director, Himalaya Optical talks about the investment pouring in the East India market, saying, “East India’s retail market has witnessed steady growth over the past years owing to start-up coming into the business. Investors are not only backing these startups but also the mature businesses. Regional brands in the East are growing their foothold in metros as well as Tier II &III towns and slowly national and international brands are also joining the league. The consumption growth in this part of the country can be attributed to the rise in affluence, which is not just limited to the metros but also true for the Tier II & III cities. Another catalysing factor is urbanisation. Consumers do not have time and are likely to pay premium for convenience. Due to the revolution in the telecom market the digital maturity of the customers has led to brand awareness and consumers prefer buying from organised branded stores for better shopping experience. The agility in the retail infrastructure with the increase in the number of malls has also boosted the growth.”
“The East Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. Indian Retail Industry has immense potential as India has the second largest population with an affluent middle class. Other factors contributing to this growth are rapid urbanisation and solid growth of Internet,” says Arun Biyani, Director, Mobel India Pvt Ltd.
“East India’s retail market is under-rated and hence can do with some exaggeration. There is huge potential in the East and most cities are doing phenomenal business. It deserves more credit than it gets for the opportunities we have here,” states Malini Singhal, Director, Zink London.
According to Shiv Daswani, Little Shop, Partner the organised retail market in East India is making a tremendous impact on the country. “Organised retail in the East has done phenomenally well. Kolkata has been a bit of a ‘role model’ of a city, as far as organised retail model structure is concerned. People here also extremely organised as far as their retail purchases are concerned. Here, customers save money through the year and then go on a spending spree during Durga Puja. The region is also a benchmark for a number of mall developers across the country who specially come here to study the success of malls. From Forum Mall to South City, City Centre to Quest, the success of malls in the East, and in particular Kolkata has been absolutely phenomenal. Brands like Pantaloons, Shoppers Stop, Big Bazaar and Max amongst many others, are clocking their highest sales in this part of the country. The loyalty that a brand enjoys in the East, is difficult to fathom anywhere else in the country. And most of the development of organised retail in the East, has happened in the last 10-15 years.”
“East India has immense potential with varied geographical reach. The North- Eastern part is one of the most evolved market in terms of consumer awareness but still not served to its full potential. The resource rich Jharkhand / Chhattisgarh also gives scope of growth, and in West Bengal – with focused government initiative SSG can be target. We currently want to focus to address the huge potential scope in East and increase our presence and footprints from 7 states and to pan India,” says Shreyans Surana, Director, Baazar Style Retail Pvt. Ltd.

3. Major Challenges and Bottlenecks

Despite the rise and rise of the region, there are certain challenges and bottlenecks which cannot be ignored. “We at Titan do not see major industry bottlenecks in East India. There are lots and lots of opportunities, that too in Tier II, III & IV cities. Consumers are very much aware of the new national and international brands and they are ready to spend money on these brands,” states Dharap.
For Biyani, East is home to major opportunities and lower number of bottlenecks. “With the presence of young and aspiring population, vibrant economy and untapped market, the market also lagging behind in terms of skilled and educated manpower, high rates of taxation, laws and availability of quality real estate at a reasonable price.”
Binani agrees, “There is a huge opportunity in the Tier II & III cities in the region, owing to infrastructural development. The cities are well connected and hence the retail market is expanding in these cities and even national players are expanding their presence in these cities resulting in a good brand mix for the aspiring empowered consumers and all the credit goes to the digital influence. The major challenge in our industry is to get trained manpower since our industry involves loads of technical know how and there are not enough training institutes in the eastern region of the country.
Therefore, hiring and retaining technical manpower is not cost-effective as was the case earlier for the east. The competition in our industry is increasing day by day.
Singhal highlighted the absence of international brands in the region, “Since all international brands are not available in the East as much as it is available in other parts of the country, it is a huge opportunity for us. Quality of talent available in the East is a bottleneck for us,as all good resources migrate to other parts of the country due to better opportunities and more choices available to them.”
“There are a couple of bottlenecks in our industry. Firstly, I believe that rents are very high in the region. For a brand to survive, one must have reasonable overheads. Only once a brand is profi table in one territory, would it expand to other territories. Secondly, there is a lack of quality real estate in terms of options available. We have 10 malls in Kolkata whereas the city is moving further towards organised retail. We could do with another 10 malls in the next 10 years. Sadly, we don’t hear of too many new malls being developed. Skilled manpower for retail is another area where I feel the East could improve.
In regard to opportunities in the sector, I feel the industry should unite and have representatives who could voice retailers’ concerns and interact with the bureaucrats, persons-in-power and other decision makers, to provide more people like us, in the organised trade, support going forward. The government needs to recognise retail as a big contributor to the tax revenue coffers and should take steps to take to task, those that are not compliant. It is difficult to sell in malls with huge overheads, if 2 streets away, hawkers are selling cheaper without any accountability. It may take time, but such situations need to be taken into control, which only the Government can do. All I can say it is a matter of time and in a few years, organised retail will be an even bigger force to reckon with given the country’s population and rising aspirations,” adds Daswani.
Highlighting the bottlenecks in the infrastructure segment, Surana says, “With our understanding of the regional factors which influence consumption, the opportunities are endless along with the bottlenecks. The real estate prices are some cities and also the state capitals are amongst the highest in the world, the lease or rents of property is one of the major area of expenditures which impact the profitability and also the rates of stamp duties and other incidental costs – which is leading to the lowest per capita retail space @ 2 sq ft per person. Especially in small towns the mindset of LL / Builders for larger change and support to retailer also is a hurdle which requires lot of mutual understanding and common goal to uplift the regional economy. Infrastructure and skilled manpower are also one of the challenges which is faced in smaller towns. The eastern region is underdeveloped with lowest average per capita income of Rs 10,315 because of lack of urbanisation, consumer habits, multiple legislations, lack of trained manpower, lack of training and manufacturers backlash due to geographically distant from manufacturing hubs like Ludhiana and Tripura.”
“Eastern India market is growing at about 12 percent and this growth is largely fuelled by low penetration of durables in this part of the country and emerging Tier II cities. Eastern India has rich mineral deposits and a strong agricultural base. This clearly means a strong rural demand where product per customer is low at present. This also means a great opportunity for retailers to tap the untapped market. Challenge is poor availability of quality manpower as available in west and south and inflated real estate prices,” says Pulkit Baid, Director, Great Eastern Retail Pvt Ltd.

4. Key Sectors on the Rise

The key industries which would drive eastern India’s economy were leather, jute, tea, locomotives, steel and mining. The region contributes more than 20 percent of the national output in each of these industries. As of last fi scal year, the Eastern region contributes the maximum in terms of locomotive equipment output at 63.5 percent, out of which West Bengal alone chips in with 46 percent share, almost the entire (99.2 percent) jute production output of which over 79 percent comes from West Bengal alone, and over 82 percent of the country’s tea production. The region also contributes to over 25 percent of leather production, 21.5 percent of steel output and 44.1 percent of mining and quarrying, 28.7 percent of crude oil output and 10.4 percent of chemicals and chemical products, says the KPMG report.
The rise of these industries is ultimately a boon for the local and regional retail industry. The retail industry in East has abundance supply of skilled labourers and as a result there are so many brands in the apparel, accessories and leather industry which are quite popular in the region and are doing actually good on the revenue parameters as well. East India is a hub for small scale industries and retailers.
There is thus huge potential for the retail market in this sector. The areas which have attracting investments andnew players are:
– Shopping Malls
– Jewellery shops
– Clothes lines
– International Brands
– F&B
– Furniture
– Glass products
Shopping Malls: Shopping malls in the East are the face of organised retail industry. Over the years, East has seen ahuge rise in the number of shopping malls.
Cities like Kolkata, Ranchi, Bhubaneswar, Bokaro have witnessed major investments happening the retail real estate in form of huge malls. Even the smaller citiesin the region are moving ahead from the shopping complex concepts are welcoming the mall culture. And the reason is quite simple.
Malls are the platform which engages visitors by offering promotions, contests, polls, customised offers, gift ideas, targeted advertisements based on real-time intelligence and location-based marketing and of course information under one roof. There are so many factors which make consumers visit the mall on a regular basis both for their needs and leisure. Malls are also increasingly turning Omnichannel, making use of the consumer’s smartphone to attract him/her in. In short, smart malls of the East are using digital technology to heighten their unique value propositions.
Sanjeev Mehra, VP, Quest Properties India Limited explains, “Mall culture is now around 15 years old in the East and very well established in the region. What we are observing, is that, cities like Guwahati, Shillong, Bhubaneshwar, Patna, Jamshedpur, and other secondary and tertiary cities, are picking up and entering in the retail growth of the East. Progress has been made to create shopping centers in all these secondary and tertiary cities. In the last three years, we have seen a rise in them, even centers with 100,000 sq.ft. are coming up which is very encouraging and allows patrons to enjoy a retail experience. Bottleneck always hunkered around ‘Quality Retail Space’ in the East. For retail to grow in the very nascent market, it is important to ensure that we have quality retail space.
Predominantly, we have seen the high streets facing challenges like noisiness, dirtiness, unhygienic conditions and with complete absence of management – does not encourage international brands to open up on a high street. This clustered around substantial plots, which are to drive in Retail for Shopping Centers, is sadly missing. The great opportunity is to make centers in all these spaces of around 200,000 to 300,000 sq. ft. centers as it needs to be closer to a certain density area.
The government must give incentives to develop such quality retail space. We believe these incentives are going to be the opportunity for the government and the city equally for the combined growth, as we have seen in South East Asian countries where quality retail space work hand-in hand. If the city authorities and the government in the region decide, then the bottlenecks can be removed, and the huge opportunity can be tapped.
Rajdeep Laha, Head Leasing, Galaxy Mall, Asansol explains further, “With the intense competition in the metros, mall developers are aiming those markets which promise viable financial returns. Here density of population, strength of purchasing power of the targeted population, viable rent to revenue ratio, lower cost of construction and land play a significant role. Tier II & III cities are untapped markets where it is important for retailers to establish their brands and the process is evident by the presence of brands in different formats. There are certain challenges and problems in East, which is often conceived as a land of political turmoil, conservative consumer behavior and a place where unorganized retailers still rule the rest. The biggest issues are intrusive government policies and local laws, high tax rates, poor infrastructure and logistics and very significantly the dearth of quality retail spaces in this region.”
Arijit Chatterjee, COO, Junction Mall says, “In East, semi-premium, large and medium format malls or complex with international, national and regional brands are holding viability and are operating successfully. Successful properties are becoming popular not only because of the brands that they host but also for other off erings including dining options, entertainment zones, multiplexes and few of exclusive services that they off er. Small towns like Durgapur, Siliguri, Haldia,Bhagalpur, Gaya, Ranchi, Cuttack are also showing serious potential of becoming busy retail addresses in parallel with Kolkata, Guwahati, Bhubaneshwar, Patna etc. Logistics is the biggest bottleneck in our industry. There are many operational challenges in the logistics industry as well. Also, there is a crisis of skilled manpower resulting in a bottleneck. Changes in policies are also factors to look into.”

5. Investment in Pipeline

Over the past two years, India’s retail market has garnered significant investor interest due to favorable government policy reforms, increasing transparency and ease of doing business, coupled with rising in disposable incomes and increasing globalisation has led to demand for retail picking up.
“Though the region has seen the entry of large funds predominantly in India, we are yet to see the “Big Boys” enter the East. I think there is a real lack of commitment and convincing to the big players about the opportunities which are there in the East. I can’t fathom why the investment from the fund should not make it way in the future. The investment is predominantly seen in a whole lot of development in the Secondary and Tertiary cities with opening up of quality shopping centres.
However, these centres are very small and does not have complete offerings. The risk-reward game of entering a city and too large a commitment is predominantly the way to go as there have been burnt in the past. But the need of the hour is to find opportunities of tomorrow, today. The demands of the people are ever-growing and from last 10 years, social media is keeping things relevant all the time. Therefore, more pressure from the brands to push for centers and government being a catalyst on the level of incentive will be attractive enough to invest in centers inthe East,” says Mehra.
Prominent retail chains like Bata, Reliance Fresh, Spencer’s, Aditya Birla Group, Shoppers Stop, Future Retail, V Mart, Pantaloons, Liberty, Provogue, V2, Joyalukkas, Bharti, fabindia and Cantabill, have established themselves as premium retail leaders and have been operating successfully in the region since a decade.
As retailers look for scale, sustainability and growth, Eastern India with its huge population base and untapped potential continues to be the market to invest in, today and tomorrow.

A multimedia journalist with over eleven years of experience in print and digital media, Sandeep Kumar is assistant editor with Images Group. Books, retail, sports and cinema are an inextricable part of his life.