INDIA RETAIL MARKET
Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. With the arrival of several new players, Indian retail has become one of the most dynamic and fast industries. The sector is the largest source of employment after agriculture and has deep penetration into rural India generating more than 10 per cent of India’s GDP.
With the advancement in technology, internet, engineering, many retailers are adopting and using the internet of things, big data technology, RFID, and other technical software and programs to enhance customer experience, customer engagement through which retailers are improving efficiency.
In particular, many customer-oriented internet of things technologies, such as augmented reality, smart shopping carts, smart displays, and RFID tags, are expected to change the way customers experience retail shopping. The Indian retail Company holds the world’s fifth-largest position. Another of the major growth drivers is the Democratic state of Indian Construction Industry, which encompasses self-sectors.
The Indian retail sector is highly fragmented with 97 percent of its business being run by the unorganized
The last few years witnessed immense growth by this sector, the key drivers being changing consumer profile and demographics, increase in the number of international brands available in the Indian market, economic implications of the Government increasing urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers.
There is an increased demand for quality retail space from a varied segment of large – format retailers and brands, which include food and apparel chains, consumer durables and multiplex operators. Large Indian players like Reliance, Ambani’s, K Raheja’s, Bharti AirTel, ITC and many others are making significant investments in this sector leading to emergence of big retailers who can bargain with suppliers to reap economies of scale. Hence, discounting is becoming an accepted practice.
Proper infrastructure is a pre-requisite in retailing, which would help to modernize India and facilitate rapid economic growth. This has helped in efficient delivery of goods and value-added services to the consumer making a higher contribution to the GDP.
International retailers see India as the last retailing frontier left as the China’s retail sector is becoming saturated. However, the Indian Government restrictions on the FDI are creating ripples among the international players like Walmart, Tesco and many other retail giants struggling to enter Indian markets.
INDIA RETAIL MARKET DYNAMICS
India’s retail operational industry, organized and unorganized in combination, employs about 40 million Indians. The typical Indian retail shops are exceedingly small. Over 14 million outlets operate in the country and only 4% of them are larger than 500 sq. ft (46 m 2 ) in size. India has about 11 shop outlets for every 1000 people.
The three top categories of products for which retail sales are the highest includes grocery, apparel, and furniture. Of these categories, Grocery retailing has been placed as the leading category because of its crucial position in satisfying one of the basic needs of any human being i.e. food.
Over the past few years, the retail sale in India is hovering around 33-35% of GDP as compared to 20% in the US. The Indian retail industry is the fifth largest in the world. Consisting of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India, especially over the last few years.
Though at an initial stage, the retail industry in India was mostly unorganized, however with the tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. Now with growing market demand, the industry is expected to grow.
The first few companies to come up with retail chains were in the textile sector, for example, Bombay Dyeing, S Kumar’s, Raymond’s, etc. Later Titan launched retail showrooms in the organized retail sector. With the passage of time new entrants moved on from manufacturing to pure retailing.
Shopping malls emerged in the urban areas giving a world-class experience to the customers. Eventually hypermarkets and supermarkets emerged. The evolution of the sector includes the continuous improvement in the supply chain management, distribution channels, technology, back-end operations, etc. this would finally lead to more consolidation, mergers and acquisitions and huge investments.
India has occupied a remarkable position in global retail rankings; the country has high market potential, low economic risk, and moderate political risk. India’s high growth potential compared to global peers has made it more favourable. India is expected to become the world’s third-largest consumer economy soon in the coming years with the increasing potential and availability of a young generation of individuals with scope of learning and development.
INDIA RETAILMARKET SEGMENTATION
The Indian Market of Retail can be segmented into following categories for further analysis.
By Product Application
- Food and Beverages
- Personal and Household
- Apparel and Footwear
- Toys and Products
- Electronic and Household
- Other product categories
By Technology Integration Type
- Voice Search Based
- In store digital display based
- Social shopping based
- Geo location services based
- Visual search based
- Smart fitting based
- AI and ML based
- IOT Based
- Big Data based
By Distribution Channel Type
- Supermarket / Hypermarkets
- Speciality Stores
- Convenience Stores
- Online Stores
- Other Distribution Channels
By Regional Classification
- Western Region – India
- Eastern Region – India
- Southern Region – India
- Northern Region – India
RECENT MARKET TECHNOLOGICAL TRENDS IN RETAIL SEGMENT
The recent integration of the technological advancements of artificial intelligence and other components alongside the visual technologies of motion and sensors has increased the retailing segment in recent years, with better presence and virtual reality-based experience being created for the customers. Thereby it can be seen that the various technological inclusions within the industry has increased its reach and is trying to boom the industry through its viability of approach.
The Internet of Things (IoT) is a network of literally billions of physical devices communicating with each other and sharing data. IoT has massive potential for the retail industry, providing a way to create even more engaging and innovative shopping experiences. One of these applications is beacons – small wireless devices powered by Bluetooth Low Energy (BLE) that transmit a continuous signal.
Another practical application of this technology comes in the form of RFID tags. These smart barcodes give you total visibility for products all the way through the purchasing process. The integration of the facial recognition technology can even help the sales staff better respond to customers’ needs, deciphering any changes in your customers’ emotion and then notifying your staff so they can attend to distressed or confused shoppers right away.
Facial Recognition can even compare faces against a database of known shoplifters to provide proactive theft prevention. Facial recognition in retail can decrease shoplifting by a considerable percent. That means better value for the customers.
RSA or robotic store assistants, with built-in 3D scanners can help the customers recognize products and even lead customers to products by navigating through the store. Now, technological advancements in the retail industry are starting to robotize last-mile delivery, too.
Virtual fitting rooms are one of the most intriguing innovations in the retail industry that utilizes augmented reality. Since the “try-before-you-buy” approach is more difficult to manage while adhering to public health mandates during the COVID-19 pandemic, augmented reality technology gives the edge to help customers make choices on products.
Modern retailing has entered India in the form of sprawling malls and huge complexes offering shopping, entertainment, leisure to the consumer as the retailers experiment with a variety of formats, from discount stores to supermarkets to hypermarkets to specialty chains.
The organized segment typically comprises a large number of retailers, greater enforcement of taxation mechanisms and better labour law monitoring system. In the coming years it can be said that the hypermarket route will emerge as the most preferred format for international retailers stepping into the country. At present, there are 500 hypermarkets operated by four to five large retailers spread across 100+ cities catering to a population of half-a-million or more.
The Retail industry competition can be seen amongst the top players who are involved in placing the most possible retail stores across the country for better access and presence. Tata has been integrating itself into the market by provisioning low-cost requirements by establishing a hypermarket business with Star India Bazaar. It offers customers a variety of products in categories, such as staple foods, fruits, vegetables, consumer electronics, health, and beauty products and many more at affordable prices.
The Mukesh Ambani led ‘Reliance Retail’ is the largest retailer in India with a pan-India presence. There are 10,644 stores across 600+ towns and cities in India. The Main aim of the organization was and is presently to have a better presence which totally integrates upon the levels of discounting which is provided at its stores on basic necessities and daily needs. It has been maintaining this to have an added advantage and edge over D Mart Retail stores across the country.