India retail: A nearly $900 billion market dominated by mom-and-pop stores

Source: Business Standard, Mar 22, 2021

MUMBAI (Reuters) – India’s expanding retail landscape is changing fast, with global and domestic consumer and retail behemoths fighting tooth and nail to woo shoppers, as many choose large, clean supermarkets over crowded local stores and ordering online.

Data from Forrester Research shows India’s retail market was worth an estimated $883 billion last year, of which grocery retail accounted for $608 billion. By 2024, the market is expected to grow to $1.3 trillion.

India – population 1.3 billion – has over the years become a sought-after retail destination with a growing base of young and affluent shoppers. The sector contributes 10% to India’s gross domestic product and accounts for 8% of India’s employment, according to Invest India, the country’s investment promotion arm.


India’s mom-and-pop stores sell everything from clothes and footwear to groceries and electronics. Most of India’s grocery retail happens at kiranas – small- and mid-sized mom-and-pop outlets which account for 75-78% of the consumer goods market, Ambit Capital estimates.

Store owners typically have a strong and regular customer base in their neighbourhood, with home delivery and taking orders on phone a common phenomenon.

Hundreds of household items are crammed inside wall-to-wall glass or wooden shelves, or in the open, at such stores. Many outlets are so small and cramped that customers don’t set foot inside – products are handed over by store staff who stand behind a counter.

Many of these shops also offer staples – such as pulses, rice and flour – in loose or unbranded form. They typically operate from early morning till late evening.


This segment is a growing trend in India, with companies like Reliance Industries, led by India’s richest man Mukesh Ambani, Future Retail, led by Kishore Biyani, and Avenue Supermarts’ DMart all competing for customers.

This segment accounts for about 12-15% of consumer goods sales, according to Ambit. A long-established store format in the West, supermarkets are the polar opposite of kiranas; tidy, well-lit and with plenty of space for customers with shopping carts to seek out items from neatly stacked shelves themselves.

Mini-supermarkets in built-up residential areas are also spreading in response to the need to cater to urban shoppers buying supplies in smaller volumes on a daily basis rather than in a once-a-week drill. Most supermarkets operate during usual business hours and shut in late evening.


Shoppers in India are increasingly turning to e-commerce to shop for everything from electronics to groceries, boosted by online discounts and the development of rapid delivery services across the country.

While companies such as Inc and Walmart’s Flipkart dominate the market, smaller startups have also introduced app-based services for daily delivery of morning essentials like milk and eggs. Boston Consulting Group says e-commerce currently accounts for about 5-6% of Indian retail. But growth is phenomenal: India’s e-commerce retail market stood at $30 billion in 2019 but is set to expand by an annual 30% to $200 billion by 2026, Invest India estimates.

New national retail policy: Licence rationalisation among five focus areas

Source: Business Standard, Nov 24, 2020

Mumbai: The government had identified five areas in its proposed national retail policy, Anil Agrawal, joint secretary in the department for promotion of industry and internal trade (DPIIT), Ministry of Commerce, said on Tuesday. Agrawal was addressing delegates at the Confederation of Indian Industry’s (CII’s) virtual retail summit, saying a discussion paper had been launched and that the final stages of revision would be undertaken shortly.

The five areas that would be addressed in the policy are ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for digital commerce.

“Offline retail and e-commerce have to be looked at in an integral manner. There is also a need for skilling and reskilling the retail workforce,” Agrawal said.

Setting up a shop or department store requires 24 to 57 licences, with the compliance burden having grown in the past few years.

The need to unwind the knots in retail has been necessitated owing to its importance in the country’s economy. Retail is India’s third-largest sector, showed a report by consultancy firm Kearney released at the CIl summit. Growing at the rate of 10-11 per cent in the past few years, its pace has now slowed to about 9 per cent, due in part to the Covid-19 pandemic, which has curtailed business activity.

Of the segments seeing a surge in business include channels like e-commerce, which has been growing at the rate of 28 per cent per annum. This came as digital adoption continued to increase in the pandemic and post-pandemic world, Kearney said.

Modern trade and general trade, on the other hand, have been growing at the rate of 10 per cent and 8 per cent each per annum, the consultancy said, with the need for a truly omni-channel play to be adopted by retailers for future development and growth.

Also, close to 50 million people were employed in the country’s retail sector, implying that jobs had to be protected and nurtured, even as digitisation improved efficiency, experts said.

Shashwat Goenka, chairman of the CII national committee on retail, said the industry had the potential to create an additional 3 million jobs, if a cohesive national retail policy was introduced in the country. Goenka is the head of the retail and fast-moving consumer goods verticals at the RP-Sanjiv Goenka group.

“Moving forward, as the industry revives from its slump, new and emerging models need to be deliberated in order to accelerate the recovery process. The industry is still hampered by the loss in demand. Therefore, proactive steps need to be taken in order to revive consumer confidence,” Goenka said.

The national retail policy was expected to address concerns of small and medium retail entrepreneurs who had borne the brunt of the lockdown and pandemic, analysts said.

“The government has always been proactive for the retail sector and has taken several measures to help create a robust environment which has allowed retail to thrive. However, now as we recover from the pandemic, a policy-led approach where the industry and government work together cohesively will allow the retail industry to bounce back and grow exponentially in the years to come,” Goenka added. The Kearney report says that improving access to capital, especially for traditional retailers, rapid adoption of technology and modernisation by offline players, bridging logistics and supply chain infrastructure gaps, and enhancing labour participation and productivity are some of the building blocks for the future.

Retail sector sees marginal recovery in August: RAI Survey

Source:, Sept 10, 2020

New Delhi: Retailers witnessed a marginal recovery in their business in August compared with July, even though localised lockdowns in some states during the Unlock 3.0 phase interrupted the growth of retail in the country, according to a Retailers Association of India survey.

The sixth edition of the Retail Business Survey, however said retail sales shrank 52% from a year earlier in August.

According to the survey, the only category that showed a significant improvement in August was consumer durables, though sales were still 23% less than a year earlier. Food & grocery (-46%), footwear (-47%), apparel & clothing (-54%), sports goods (-58%) and beauty & wellness (-56%) all recorded sales around half of August last year. The southern region fared slightly better (-46%), followed by East (-52%) and West & North (-54%), on a y-o-y basis. Across regions, large retailers performed marginally better than medium-sized ones.

“The retail industry has started to witness some green shoots, especially in states that are allowing retail to operate with fewer interruptions. Support from governments at local levels across the country with the assurance of no more localised lockdowns will help fast-track recovery of sales during the upcoming festive season to almost to the same levels as last year … perhaps just 20% short of last year’s figures. Some segments may even do better,” said Kumar Rajagopalan, the association’s chief executive.

Despite the unlock 4.0 orders by the central government, local authorities in some states continue to impose partial lockdowns, which is dampening consumer sentiment and hampering recovery, the association said in a statement.

The industry body has appealed to the Department for Promotion of Industry and Internal Trade and the home ministry to instruct these states to adhere to the central government’s guidelines as any shutdowns should be very carefully calibrated to ensure a balance between lives and livelihoods.

American private equity firm Silver Lake invests Rs 7,500 crore in Reliance Retail for 1.75% stake

Source: The Economic Times, Sept 09, 2020

Reliance on Tuesday announced that Silver Lake will invest Rs 7,500 crore into its subsidiary Reliance Retail Ventures Ltd (RRVL) for 1.75% stake. This investment values the retail business of Reliance at Rs 4.21 lakh crore.

This marks the second billion dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35 billion investment in Jio Platforms earlier this year.

Reliance operates India’s largest retail business of onset 12,000 stores nationwide with 640 million footfall.

Commenting on the transaction with Silver Lake, Reliance Industries chairman and managing director Mukesh Ambani said the extension of relationship with Silver Lake will add to its transformational efforts of building an inclusive partnership with millions of small merchants while providing value to Indian consumers across the country in the Indian retail sector.

“We believe technology will be key to bringing the much-needed transformation in this sector so that various constituents of the retail ecosystem can collaborate to build inclusive growth platforms. Silver Lake will be an invaluable partner in implementing our vision for Indian retail,” said Ambani.

Egon Durban, co-CEO and managing partner of Silver Lake, said, Mukesh Ambani and his team at Reliance have created an outstanding world leader in retail and technology through their courageous vision, commitment to societal benefits, innovation excellence and relentless execution.
“The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the
COVID-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun. Reliance’s new commerce strategy could become the disruptor of this decade. We are thrilled to have been invited to partner with Reliance in their mission for Indian retail,” Durban said.

With more than $60 billion in combined assets under management and committed capital and a focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing. Its other investments includes Airbnb, Alibaba, Alphabet’s Verily and Waymo units, Dell Technologies and Twitter.

The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels. Latham & Watkins and Shardul Amarchand Mangaldas & Co acted as legal counsels for Silver Lake.

Essential goods to fuel retail industry’s growth in coming quarters: Report

Source: Business Standard, Sept 04, 2020

New Delhi: Essential goods will fuel the Indian retail industry’s growth in the coming quarters amid the coronavirus-induced slowdown, with consumer expenditure continuing to remain focused on these items, particularly food and grocery, according to a report.

As per ‘Indian Retail- Certainty Despite Headwinds’, a joint study by the Retailers Association of India (RAI) and real estate services firm ANAROCK, the average bill value for essential goods has gone up 1.5 times after lifting of lockdown to Rs 900 per basket at present from Rs 650 per basket in early-March.

Categories such as food and grocery, followed by apparel, fast-moving consumer durable and electronics, furniture and home furnishings and quick-service restaurant will see a V-shaped recovery in the next 2-3 quarters, the report said. It added that other segments like beauty, wellness and personal care and home essentials may take 4-6 quarters to recover fully.

Overall, the report also found that 70 per cent of retailers anticipate business recovery in more than six months and 20 per cent in more than a year.

According to the report, in the wake of the pandemic, omni-channel retail has taken centre stage with in-mall stores doubling as urban warehouses to ensure fast delivery. Besides, hygiene and sanitation are now of prime importance in malls and touchpoints automation and digitalisation is the new norm.

RAI Chief Executive Officer Kumar Rajagopalan said, “Omnichannel was gaining importance before the pandemic. The pandemic has enhanced the importance of retailers having an omnichannel strategy since concepts of digital browsing, click and collect, curbside delivery, and video shopping have gained importance.”

He further said COVID-19 has propelled consumers to purchase based on convenience either as delivery to home or by shopping at offline nearby stores or by time-scheduled shopping.

ANAROCK Retail MD and CEO Anuj Kejriwal said omnichannel retailing is evolving rapidly with brands collaborating actively to enhance their reach.

“Many are using malls or in-mall stores as urban warehouses to ensure a faster delivery to customers and are tying up with existing e-commerce and delivery portals to leverage their existing network and ensure reduced additional cost,” he said.

COVID-19 will work as a catalyst for the growth of organised retail and e-commerce in India. Online spending is on a marked rise with online shoppers projected to increase from 15 per cent in 2019 to 50 per cent of the total online population by 2026, Kejriwal added.

When it comes to sanitised shopping experience, the report found that mall owners are looking to minimise touchpoints by going digital and sanitising cars before letting them in the parking spots.

“With valet services, cars are sanitised before and after the car is returned to a customer. Sanitisation of customers’ belongings before mall entry also figures high on the list,” it added.

Store operators are sanitising apparel after every trial, and steam-ironing them before returning them to the rack after 24 hours. The report also said many retailers are also using technology for consumers to order before entering the store, or for home delivery of products. Automation and contactless technology will redefine the shopping experience in the future, and retailers will need to adopt such technologies.

How India’s 12 million kirana stores becoming cornerstone of growth plans of Reliance Retail, Amazon, Flipkart

Source: Financial Express, Jul 24, 2020

India’s 12 million kirana stores are becoming the cornerstone of the growth plans of retailing giants Reliance Retail, Amazon and Walmart Inc-owned Flipkart.  They are increasingly teaming up with mom-and-pop stores to supply merchandise and also to help digitise their operations, empowering them to record customer preferences and stock SKUs accordingly. Moreover, they’re enabling buyers to place orders online at their neighbourhood stores, and at some point, plan to help the stores deliver the goods.

As they transact on e-marketplaces and dabble in analytics, kiranas are transforming from pure brick-and-mortar entities to quasi-digital businesses and in the process changing the character of the country’s $650-billion retail industry. Experts reckon that powered by the involvement of these ubiquitous outlets, the country’s e-retailing business could grow multi-fold to $100 billion very soon.

While Reliance Retail is betting on its alliance with WhatsApp to give it an edge, Amazon is already enabling small kiranas to sell their goods on their e-marketplaces. In fact, four years back, Amazon had in a pilot project tied up with local groceries and modern retailers such as Big Bazaar to deliver groceries in Bengaluru.

Flipkart now proposes to supply goods to kiranas leveraging the expertise of Walmart India — a cash-and-carry business — that has been servicing kiranas for more than 10 years now.  Walmart India runs 28 best price shops and caters to more than 1.5 million customers kiranas and MSMEs.

In a corporate restructuring exercise, announced on Thursday, Walmart India will be housed in Flipkart Wholesale, which will launch marketplace operations in August, starting with services for the grocery and fashion segments.  Last week, Walmart Inc topped up its investment in Flipkart, which it bought out in 2018 for $16 billion, by a chunky $1.2 billion.

Given Flipkart’s relationships with manufacturers, big and small, it should have no problem sourcing merchandise, experts said. The latest initiative is aimed at retaining the customers of Walmart India and not losing them to Amazon and Jio.

Satish Meena of Forrester Research pointed out companies like Amazon, Flipkart and Jio not only want to support kiranas with back-end infrastructure but also want to deliver supplies so that kiranas need not rely on local distributors. Meena believes Walmart’s expertise in sourcing and Flipkart’s in last-mile delivery can be a good combination.

Reliance Retail announced last week it was planning to expand its range of merchandise — that would be supplied to small stores — to include electronics, fashion and healthcare products. The retailer runs a pan-India network of 12,000 stores that includes neighbourhood outlets Reliance Fresh and supermarket Reliance Smart. So far Amazon Inc has committed over $6 billion to its India operations and experts believe the US-based firm will unravel more strategies to grow its business here.

Flipkart said in a statement on Thursday: “Whether in grocery, general merchandise or fashion, kiranas and MSMEs will have one-stop access to an extensive selection of products with attractive schemes and incentives, supplemented with data-driven recommendations for stock selection, delivered through a fast and reliable network to drive greater efficiencies and better margins.”  Flipkart Wholesale will be led by Adarsh Menon.

Lockdown or not, 20% of India’s retail to shut shop

Source:, May 13, 2020

NEW DELHI: About a fifth of the retail shops across India may fold up even if lockdown is lifted soon because expenses such as high rents will make business unviable amid muted sales, with customers expected to shop only for essential goods, trade bodies said.

In congested areas, where social distancing is impossible, traders have decided to remain shut even after the restrictions are relaxed. More than 60% of retail outlets in major markets including Colaba, Nariman Point and Andheri in Mumbai and Khan Market, Connaught Place and Sadar Bazar in New Delhi are occupied by tenants, traders said. Many have defaulted on rent, they said.

Rent for a 1,000 square-foot shop can be as high as Rs 5 lakh a month in Khan Market and Rs 3 lakh in Breach Candy area, said Praveen Khandelwal, secretary general of the Confederation of All India Traders. “At least 20% of Indian retailers’ business will collapse and they will wind up businesses. About 10% of other traders who are dependent on these 20% traders, too, will collapse,” he said.

In Delhi’s old markets, shopkeepers who pay rents of Rs 4-5 lakh a month are scared, said Sanjay Bhargava, president of Chandni Chowk Sarv Vyaapaar Mandal. Most rent agreements have a force majeure clause and it has been invoked. Traders are trying to manage on their own with savings. “We will not be requesting or expecting relief from the government,” said Bhargava.

Ajay Bajaj, senior advisor to Confederation of Sadar Bazar Traders Association in Delhi, said rentals are expected to fall more than 50% once lockdown goes.

Ram Lal, president of the Gaffar Market Traders Association, said, “Our only advice to shop owners and tenants (unable to pay) is that they should resolve the issue mutually and pay at least 50% of the rental.”

Retail India set for a recast as e-tailers woo kiranas

Source:, Apr 24, 2020

The humble corner store has emerged as the unlikely darling of multi-billion-dollar corporations, online supermarkets and digital payment startups, courted for its reach, agility and customer insight displayed at a time when many well-heeled online vendors have buckled.

In yet another hat-tip to India’s enterprising kirana store, global online retailer Amazon on Thursday began ramping up a programme to sign up hundreds of local grocers, a day after Reliance Jio and Facebook Inc. joined hands to power Reliance Retail’s JioMart. Soft-launched in December 2019 as ‘Desh Ki Nayi Dukaan’, JioMart currently serves online shoppers in some parts of Mumbai and its suburbs.

‘Local Shops on Amazon’ helps customers discover products from local shops, while helping shopkeepers supplement their footfalls with a digital presence, and expand beyond their normal catchment, the company said. Shops that sell groceries and essentials are already live on Amazon, since India’s strict lockdown rules allow the sale of only such items. With Amazon going full steam into the corner store network, there is more competition on the way for rivals JioMart and Walmart-backed Flipkart.

Jio, Facebook and Amazon are only the latest suitors for India’s kirana stores numbering close to eight million, a segment once perceived to be on the back-foot with the aggressive entry of swanky supermarkets and online grocery platforms. Others chasing kiranas include big retailers like Reliance Retail, cash and carry companies, business-to-business (B2B) startups and even large e-commerce firms.

Reliance Retail aims to be India’s largest omni-channel retailer through its hybrid online-to-offline new commerce platform.

“After digital payments, it is e-commerce that will usher in the next big revolution in leveraging the potential of the vast network of kirana stores and resellers across the country. E-commerce has the potential to re-position and re-invent kirana stores as convenience stores from an e-commerce perspective, while offering them a new source of revenue, making it a win-win situation for all,” said a spokesperson from Flipkart, which has already partnered 37,000 kirana stores across the country.

“Our approach to work with kiranas and general trade stores is to inculcate a sense of entrepreneurship, instil a sense of discipline and develop a rewarding ecosystem for them.

These efforts will help transform the kiranas to serve the new set of consumers who are more tech-savvy and want personalized services,” the Flipkart spokesperson added.

The ability of these stores to deliver without a break during the crippling nationwide lockdown has won them much admiration.

“Kiranas that had lost some sheen, thanks to modern trade and online channels, are back in the limelight as they have outperformed online grocery retailers in the lockdown period,” said Samarth Agrawal, founder and CEO of MaxWholesale, a B2B platform that helps kirana stores place online orders for stocks. “Kiranas have proven their dependability and sustainability. You rush to the kirana store when in immediate need of a product which underlines their dependability. Plus, they have not only been storing products but making home deliveries profitably,” he added.

Agarwal said no artificial intelligence can match the kirana shop’s consumer understanding.

“The only missing piece in the kirana story was technology, where companies like ours come in to make them more efficient,” said Agarwal.

The Facebook-Jio deal will enable these stores to deliver products and services by transacting through JioMart, using Facebook’s WhatsApp. “Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector,” Reliance Jio said on Wednesday. India’s kirana stores account for 80% of the country’s retail industry, and for Reliance Industries’ Mukesh Ambani, it is a massive opportunity.

“We see the deal as strategically significant for Facebook as it will enable transactions on WhatsApp, giving fillip to its effort to monetize the platform. On one hand, JioMart could enable inventory and back-end supply chain for small shops, on the other, the WhatsApp platform could enable ordering and payment providing seamless customer experience. We do see formidable execution challenges as well as opportunity,” Edelweiss Securities Ltd said in a 22 April report.

Reliance Retail aims to be India’s largest omni-channel retailer through its hybrid online-to-offline new commerce platform, for which it is deploying merchant point of sale (M-PoS) machines. Currently, there are 15,000 digitized stores in the country. RIL plans to grow this to 5 million by 2023. For faster adoption, it is also asking FMCG firms to insist that kirana stores and distributors use its M-PoS.

During his India visit earlier this year, founder Jeff Bezos had pledged $1 billion in new investments to bring small businesses online, courting merchants and the government amid regulatory scrutiny and protests by traders. The investments, said Bezos, will touch as many as 10 million small and medium businesses.

Meanwhile, B2B startups are helping digitize kiranas to enable online ordering, ensure online payments and even deliver goods to shoppers. “In the near future, we foresee all kiranas being part of a select few digital platforms. In a few years, it’ll be difficult to imagine a kirana store without a platform association. This is one of the largest retail and consumer internet opportunities of our times, estimated to be more than $60 billion by 2025,” said Amit Sharma, CEO, and co-founder, at B2B commerce platform ShopX.

Airport retail in India to grow to $9.3 bn by 2030 from $1.4 bn: Report

Source: Business Standard, Feb 25, 2020

Mumbai: The airport retail segment in the country is expected to grow to $9.3 billion (about Rs 66,000 crore) by 2030 from $1.4 billion (about Rs 9,940 crore) at present, with as much as $2 billion (about Rs 14,200 crore) coming from duty-free sales, a report said on Tuesday.

Real estate opportunity for Indian airport operators is projected to be $1.6 billion (about Rs 11,350 crore) by 2030, global property consultancy Knight Frank said in its report on transit retail.

“The total opportunity for airport retail to be approximately $9.3 billion by 2030 from its current estimated market size of $1.4 billion in 2019,” it said. Read the rest of this entry »

H&M narrows gap with Zara on the back of new stores, low prices

Source:, Oct 07, 2019

MUMBAI: Swedish retailer Hennes & Mauritz (H&M) has narrowed the gap with global rival Zara in India’s fast-fashion market with more new stores as well as merchandise priced lower than most rivals.

The Indian unit of the world’s second biggest clothing chain posted sales of Rs 1,237.7 crore last fiscal, compared to Rs 893 crore a year ago, according to financials sourced from Veratech Intelligence.

Net profit jumped 29% to Rs 45 crore. The brand had opened its first India store in October 2015, competing mainly with Spanish chain Zara, which entered India five years earlier in 2010. Inditex Trent, which runs Zara stores in India, saw its revenue rise 17% to Rs 1,438 crore in 2018-19 with net profit of Rs 71 crore. Read the rest of this entry »