In 2014-15, Indian Railways carried 8.4 billion passengers — more than 23 million passengers a day (roughly half of whom were suburban passengers). India’s thousands of railways stations – in excess of 8,000 at last count – comprise perhaps the greatest under-optimised retail real estate spaces in the country. While not all of them may be viable locations, many contain untapped consumption-building opportunities.
Rail travel retailing represents a significant component of many retailers’ strategy for growth globally. The Grand Central Terminal in New York city, for instance, one of the busiest train stations in the world serving nearly 200,000 commuters every day, is not only a commuter hub but is also considered a tourist destination. With 145,000 square feet of retail space, it is home to some of the world’s biggest retailers, including Apple, which selected this location to open its largest retail venue.
With the ongoing revamp of most railway stations, Indian Railways – the fourth largest employer in the world — is also gradually opening up avenues for retail environments. One of the moves to enhance the rail travel experience is a trial run of an e-catering process, recently announced by Indian Railway Catering and Tourism Corporation, which will offer food ordering services to train passengers through prior online bookings. The initiative will witness partnership of several privately-run foodservice majors with IRCTC, which will not only improve quality of products delivered on trains, but will also pave the way for a potentially game-changing private public partnership.
Speaking on the potential of the process on running a trial with IRCTC, Harneet Singh Rajpal, Senior VP-Marketing, Domino’s Pizza India says, “This is qualitatively a big opportunity and we are very positive about it, but we cannot ascertain its quantum without a trial of consumer response to this new service and also logistical feasibility of delivering hot and tasty pizzas on train seats.”
“We will analyse the results after the trial and then move forward accordingly,” he adds.
Retail at railway stations is not an altogether novel phenomenon for India. Iconic bookstore chain, AH Wheeler & Co (P) Ltd, which opened its first outlet at Allahabad Railway Station in 1877, later spread as small book stalls in several mini and macro railway stations across the country. After 125 years since inception, AH Wheeler now is a chain of 378 bookstalls at 258 railway stations in the country.
Currently in India, however, airports are considered the preferred locations for travel retailing, especially as a result of private operators remodelling some major airports of the country in the past few years. The T2 terminal at Mumbai’s Chhatrapati Shivaji International Airport has about 700,000 sq. ft area dedicated to retail, food and beverage, lounges and travel services. Similarly, at Delhi’s Indira Gandhi International Airport, terminals T1 and T3 house around 500 brands spread over 323,000 sq ft.
In addition, with the development of intra-city metro infrastructure, Metro stations have also emerged as viable retail spaces. Real estate majors such as Parsvnath Developers already operate Metro Malls in Delhi-NCR, while in Hyderabad, Larsen & Toubro is on course to creating a stunning retail zone at the upcoming ‘Hyderabad Next’ metro rail project.
While hygienically packaged, branded foodservice will be a key draw for rail passengers, opportunities also exist for several lifestyle categories, including gifts, toys, fashion accessories, sports and travel equipment, among others. Could this be the inception of a new retail revolution in India? Watch this space.
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