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East Delhi emerges as marketer's paradise

August 22, 2006 10:36 IST

Mumbai Suburban may be the country's largest market {Rs 39,484 crore (Rs 394.84 billion) this year}, and Chandigarh the richest district in per capita terms (Rs 69,000 per annum), but what matters from a marketer's point of view is the density, or how much they can sell within a km's radius from the outlet.

And the top district in the country in terms of market density is East Delhi, which has a smaller market of Rs 9,511 crore (Rs 95.11 billion) this year, but one, which translates into Rs 149 crore (Rs 1.49 billion) of annual sales per sq km.

While East Delhi is not home to many luxury shops or shopping malls, the ones coming up in Ghaziabad essentially cater to this market.

East Delhi even beats West Delhi, which has a large number of malls, both in terms of overall market size and density, though West Delhi is the one seen as the marketer's paradise - West Delhi's total market is of Rs 8,178 crore (Rs 81.78 billion), and the density per sq km is Rs 63 crore (Rs 630 million). Some part of this, of course, is related to the population density in East Delhi - it has over 28,000 people per sq km as compared to West Delhi's 20,000 or so.

In terms of income levels, East Delhi is vastly better off than West Delhi, with over 42 per cent of households earning over Rs 300,000 a year, as compared to around 11 per cent for West Delhi.

While both areas have the same penetration of two-wheelers (36 per cent of households own such vehicles), West Delhi leads in the proportion using four-wheelers (20 versus 17).

These results, from the latest Indicus Analytics' publication, "Market Skyline of India 2006: District Profile," are based on the National Data Survey on Saving Patterns of Indians (2004-05), National Accounts Statistics, and Reproductive & Child Health Survey that was conducted in 2003-04 and then projected forward.

The RCHS, like the government's National Sample Survey, covers all 590 districts in the country, with a sample size of around 1,000 households per district.

Chennai, which has the fourth largest market in volume terms {Rs 23,252 crore Rs 232.52 billion)} among the country's most urbanised districts, is the second-most dense, with annual sales of Rs 134 cr (Rs 1.34 billion) per sq km.

With over 26,000 people per sq km, Chennai is almost as dense as East Delhi, and though nearly 28 per cent of its households earn over Rs 300,000 a year, this is still lower than East Delhi's 42 per cent.

Chennai has the second spot when it comes to four-wheelers (at 21 per cent, Chandigarh beats it by one percentage point), but tops the two-wheeler charts, with 70 per cent of its households owning such vehicles.

The biggest surprise, of course, is Mumbai that is generally perceived to be the country's richest market. While Mumbai Suburban is indeed the largest market (if you don't assume the whole of Delhi to be one market), in terms of total annual household expenditure, it is fifth in the pecking order.

The district is much lower down the order when it comes to the use of four-wheelers (12th in districts with 80-100 per cent urbanisation), and 10th in the case of two-wheelers. Only a fifth of its households earn over Rs 300,000 a year, a figure that's roughly the same as Mumbai district, and much lower than that for Chennai or East Delhi.

In north India, though Gurgaon is considered a much richer market than Noida, and the latter better than Ghaziabad, in terms of density almost the opposite is true.

Gurgaon has a market density of just Rs 1.78 crore (Rs 17.8 million) per sq km {total market is Rs 4,929 crore (Rs 49.29 billion)}, while Gautam Buddha Nagar (Noida) is second at Rs 4.8 crore (Rs 48 million) per sq km {total market Rs 6,067 crore (Rs 60.67 billion)}, and Ghaziabad has a density of Rs 5 crore (Rs 50 million) per sq km {total market Rs 9,767 crore(Rs 97.67 billion)}.

Since Ghaziabad also caters to the East Delhi market, that is an added plus as far as setting up of up-market shopping areas is concerned.

Sunil Jain in New Delhi
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