The retail market in India accounts for 10% of the country’s GDP, highlighting its significance in the country’s economy. With high competition, choosing the right location for your business is crucial to capture the market share.
India’s growing middle class, urbanization, and shift toward organized retail create promising opportunities, but identifying the next big retail market should not be guesswork and it requires careful location analysis.
This article explores key factors in identifying prime retail locations and highlights how location intelligence platforms play a vital role in this process.
Identifying High-growth Potential Locations for Retail
1. Leveraging Location Intelligence to Spot Growth Zones
There’s a high chance that the next store location that you finalized might end up being in a saturated market, lack genuine foot traffic, have lesser TG concentration in the trade area, and other drawbacks.
Investing in such locations would lead to underperformance of your store or worst case scenario, store closure.
If you want to pinpoint emerging retail markets that competitors may have overlooked, leveraging a location intelligence platform would be the ideal choice.
Our platform helps identify high-potential markets by analyzing key factors such as:
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- Footfall Trends: Track foot traffic patterns and number of visits (Hourly, Daily, Monthly) to understand consumer interest and demand in specific areas.
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- Customer Demographics: Gain insights into local populations’ age, income, preferences, and more to determine if your ideal target audience is present or to tailor your offerings.
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- Spending Capacity: Identify the purchasing power of households by analyzing income and affluence levels to maximize revenue opportunities.
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- Trade Area Analysis: Assess the catchment area around a potential retail site to understand where shoppers are coming from.
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- Competitor Analysis: Monitor competitor presence in your target location to assess demand and determine if the market is already saturated.
2. Monitor Urbanization in Tier 2 and Tier 3 Cities
Urbanization spreads beyond India’s largest metros, and Tier 2 and Tier 3 cities are becoming hotbeds for retail expansion. You can capitalize on this growing trend by expanding your presence into these cities.
However, the location you choose should also have your ideal target audience and a higher customer base to make your investment worthwhile.
Location intelligence plays a key role here in understanding your Total Addressable Market in any Tier 1, Tier 2, and Tier 3 cities across India.
With such a platform, you can gather valuable insights into the demographics of a particular location.
Additionally, staying informed about local government investments, such as infrastructure projects and economic incentives, can further solidify your location choices.
Public investments in transportation, commercial hubs, and residential areas often signal growth zones with increased demand for retail options.
3. Understand Consumer Preferences and Behavior by Region
Regional tastes and preferences vary widely across India. If you have decided to open a store at a particular location you should be well versed with the customer’s expectations.
Leverage location demographics such as – Age, gender, household income, population density, purchasing power, etc, to have an idea about their preferences to tailor your product offerings.
Also, trending products and sentiments by region should be analyzed. By knowing consumer sentiment in specific areas, you can adapt more effectively to local demands, ensuring your store aligns with the needs and interests of the community.
4. Examine Real Estate Trends and Affordability
Real estate costs are a key factor in evaluating potential retail locations. Premium urban spots may offer high visibility but come with hefty rental prices, which could limit profitability.
Meanwhile, affordable retail markets might lack the foot traffic required for sustained success. Balancing these aspects is essential.
Here location intelligence platform gives you the average rent of your target locations and allows you to pinpoint locations that not only meet your budget but also attract steady customers, making the investment more sustainable.
For instance, upcoming commercial hubs or residential developments often present a “sweet spot” for affordable leases combined with a growing audience.
5. Leverage Predictive Insights to Anticipate Demand
Using predictive analytics to forecast retail demand is a strategic advantage that you can have.
By analyzing various location demographics, predictive models allow you to foresee areas where demand for retail is likely to increase. This approach helps you stay ahead, positioning your store in locations set to experience higher customer footfall and demand.
Predictive insights are particularly useful if you’re looking to expand your presence into unknown regions where you might lack enough data to make a solid decision.
| Lenskart partnered with GeoIQ to predict the revenue of their stores with 95%+ accuracy!
6. Seek Out Proximity to Complementary Businesses
Selecting a retail location near complementary businesses, such as cafes, gyms, or entertainment venues, can significantly increase foot traffic and expand your customer base.
Being situated in proximity to businesses that attract similar or overlapping customer demographics encourages multi-purpose visits, where customers stop by multiple stores in a single outing.
For instance, a clothing store located near a popular café or fitness center benefits from shared foot traffic, as customers are more likely to explore nearby shops. This strategic placement not only boosts visibility but also appeals to consumers who prefer convenience, allowing them to combine shopping with leisure activities.
By choosing a location with complementary businesses, you can establish a presence in areas with built-in demand, making your store a natural part of the customer journey.
7. Stay Informed on Government Policies and Incentives
Government policies and incentives can open up valuable opportunities for retail expansion, especially in emerging retail markets and underdeveloped areas with high potential.
Regular updates from state and local governments on tax benefits, relaxed zoning laws, and investments in infrastructure often highlight which areas are being primed for growth.
Keeping tabs on these government initiatives helps you take advantage of lower costs, tax breaks, and improved infrastructure that supports retail businesses.
For example, if a state offers tax relief in certain districts to attract retail investment, this can significantly impact your location decisions, giving your brand a competitive edge in regions ripe for development.
8. Analyze Socioeconomic and Lifestyle Shifts
Areas with rising incomes, improved education levels, and increased employment can be a signal of a shift toward higher consumer spending.
These regions tend to welcome premium products, branded stores, and unique shopping experiences, as consumers seek to upgrade their lifestyles.
Retailers can benefit by examining shifts in lifestyle and spending behavior, focusing on regions where disposable income is on the rise and where consumers are inclined to explore new brands.
Conclusion
The retail market in India is a competitive space and a well-rounded approach to location selection should be your first priority once you decide to start a retail business.
Identifying the next big retail market can possess a lot of opportunity and also an immense risk if you don’t make data-backed decisions.
Utilize our location intelligence platform to access vital locations to make data-backed decisions at no cost!
