Who could have predicted 100 years back that a ground breaking invention into which you say ‘hello’ will grow into a device of such formidable impact. Mobile phone, as this device’s latest form is called, has truly given the masses a voice and in many ways ‘freedom of expression’.
Be it something as simple as saying ‘hi’, capturing a moment via a photo, satiating the curious mind by searching something on YouTube, listening to music or watching something on Netflix. It’s truly the personal confidant and ever scarier, maybe your true soulmate. I will probably write a book on it someday. Today I want to talk about how this magical device is changing the retail landscape in India.
Retail forms about a third of India’s GDP; this goes to show how substantial this sector is. This sector is now probably the most impacted one, given the lockdown. Retail is the driving force and pretty much the yardstick used to gauge the health of an economy. Of the trillion-dollar segment retail is in India, modern retail comprises less than 10%. Majority of the segment is what’s called unorganized. I think the term is inappropriate as, if you see the efficiency with which the so-called unorganized segment works it will put many a supply chain models to shame. For the sake of this discussion lets refer it to as the ‘real retail’. The pie in the sky for the global majors has been to increase the percentage of modern retail and maybe it is happening in a way how everything happens in India. India leapfrogs!
India is now home to the second largest internet consumers globally. All of this happened in just about a decade! The traditional model of commercial internet access was dial-up, then DSL (Digital Subscriber Line) and then came High speed (broad band, fiber, 5G). In India we leapfrogged from Dial up in the 1990s to 4G now. A vast majority of the consumers first experienced internet via a mobile network only. The same sort of leapfrog is happening in the retail space. The traditional maturity model for retail is mom & pop stores (commonly referred to as kirana in India), then big box stores, malls and then ecommerce. Indian retail space is seeing a leapfrog from kirana to ecommerce. The lockdown is proving to be a catalyst as people cannot go out, most shops are closed, and people are wary of their own safety.
Like a coin, India too has two faces, one is the metros like Bombay, Delhi, Bangalore and then the smaller towns and villages. E-commerce is gaining traction in both the areas but for very different reasons. In metros its mostly for convenience, better deals, people unwilling to get stuck in traffic or go around in circles to find parking. On the other hand, in towns and villages e-commerce is gaining traction simply because of the sheer access it provides. Consumption volumes aren’t encouraging enough for business to open stores, malls however the resident of such a place wants to sport the latest shades or the T-shirt his favorite movie star is donning. The movie he just got done seeing on one of the many OTT (Over the Top) streaming apps that dot his cell phone screen. How convenient is it to just swipe your phone screen, get to a market place and within a few short clicks order the latest fad? Its emotionally priceless. And this in itself is the magic ecommerce brings. The conduit that brings all this together is the internet and I will give it its due respect in a different post.
Retail as we know, will look very different in times to come. The kiranas will not give way to modern retail. The real retail and modern retail will coexist with ecommerce. I predict the segment will grow phenomenally via holistic inclusion and mutual respect of sharing the pie! Going back to the magical device, the humble cellphone is quietly but surely rewriting the retail story in India.
(Edited by Anu Choudary)
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