THE INDIAN RETAIL MARKET is estimated to be around $800 billion. Predominantly, it is unorganised and operated by over 11 million kirana shops. These kiranas depict the power of MSME or even nano-SME entrepreneurs, using their native intelligence and commercial acumen to trade. They continue growing despite the past two decades of large brands of formal retailers having entered this space. This retail space has its set of complexities of hyper local consumer behaviour, local product preferences, price sensitivity, packaging requirements, brand vs product trade-offs and much more.
The Indian grocery ecommerce market is estimated to grow to around $25 billion by 2025. The research firm Sanford C. Bernstein's report mentions that "Online grocery penetration is expected to reach -3-5%, by 2025 from less than 1% today. Long-term structural drivers remain strong: rising income and affluence, lower tier consumption, e-commerce penetration (-30% CAGR) and a youngpopulation (-50% below 25). Grocery spend as a proportion of income remains high at -30%".
Traditionally, the Indian households bought monthly groceries in bulk. With the advent of nuclear families, this slowly segmented into buying groceries as dry goods and fresh goods (like vegetables, fruits, meats, etc.) as separate purchase patterns. With usage of marketing mediums to communicate freshness, price bargains, free home deliveries, special SKUS (stock-keeping-units), seasonal merchandise and more, the formal retailers have been trying to capture territory and consumer mindshare, as well as a share of their wallets. Fairly, the consumer behaviour of planning the monthly groceries purchase has changed and continues to shift more towards Just-in-Time (JIT).
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