Indian retail – A $900 Billion Market
Author : Mohd Arham
The population of India is around 1.3 billion and with the growing affluent shopper it is becoming one of the most sort-out retail destination. The sector counts for 10% of the Gross Domestic Product and 8% direct employment in the country.
As the use of technology and Internet are increasing people are preferring a clean and hyper market where they can get all the necessary item easily over the crowded local stores. As per the data from the Forrester Research shows that the retail market was estimated to be $883 billion in 2020 out of which $604 was from the Grocery and by 2024 the market is expected to grow up to $1.3 trillion.
Kiranas & Mom and Pop Store
The Mom-and-Pop store is place which sells everything from fashion to grocery and the electronics. Majority of this are small and mid-size and accounts for 75-68% of the consumer good market as per Ambit capital estimates. The shop owner has strong connection base with in the society and takes many orders on the call and even delivers till the room like an e-commerce service.
It majorly includes the daily household item and food grocery which are stored/kept inside the shelves or in wall glass. In many cases the shop is so small the customer could not even see the product due to low space and the products are kept at back side which on asking is given by the store boy from the behind. They also offer loose products of pulses, rice and flours and operate from morning till late evening.
Supermarkets – Modern Retail
This is segment is just opposite of the Kiranas here the products are visible clearly and maintained on the shelves in the bulk amount and the customers have plenty of space to have view and choose as per its need and accounts for 12-15% consumer goods. It growing at a faster pace in India and Reliance Industries Mukesh Ambani is one of the most profitable players in this market and been ranked as fastest going retail company globally and the only Indian company to feature in top 100 list of global retailers.
Last year Reliance retail agreed to buy Future group asset to become major leader in the market but the deal has been in legal process with Amazon. There are also many mini-supermarkets with in the societies to cater their daily urban needs and operates usual working hour.
Dmart owned by Avenue supermart LTD. Is another major player in this organized sector. Although Reliance much bigger than this but still Dmart has 965 organized sector which is in well situation to take competitive advantage.
The wave of e-commerce is increasing day by day and with covid-19 gave a boost to everyone to use it for everything from electronics to grocery and with fast home deliveries it made convenient to use specially in urban side. Firms like Amazon and Flipkart which dominate the market. As per Boston Consulting Group E-commerce account for only 5-6% of Indian retail but is expected to grow around $200 billion market in 2026.
The Retail sector of India can be viewed in two parts as the organized and unorganized sector. In terms of the growth FMGC retail is growing at a faster pace and even the unorganized sector specially the Kirana stores is also being merged with big e-commerce firms such as Reliance, Udaan and Amazon. They wanted to capture this market and expand it not only to their near locality but to a wider place from where it is situated. The lockdown has already given boost to mini and super markets where people go and buy daily usage stuffs for a week or 10 days to get rid of everyday things.
In a nutshell we may conclude that the retail industry in India has a very bright future prospect. It is expected to enrich the Indian Economy in terms of income and employment generation