Challenges and Future of grocery business in India

photo-1454367021904-b6a8d452fc48This study is part of a research project to understand & gain insights into the current trends pertaining to online vis-à-vis offline gorcery retailing and to identify room for improvement .This  paper is one of the first in a series of papers to be published from the Department of Digital Marketing & Metrics Professional PG programme.

It is primarily a Secondary research which tries to study the Indian Grocery business from the point of view of an entrepreneur looking to venture into the Indian Grocery Industry. It is assumed that the reader of this document has had a basic schooling and is able to appreciate the fact that Retail in a populous and expansive country like India is a much sought after business due to our country’s demographic dividend. It has many facets to it in terms of regulations, distribution channels, procurement, automation, online integration, Inventory management and many more –each of which poses unique challenges and has numerous avenues to work on and streamline.

On the face of it, retail looks like a very lucrative business where every businessman would want to get into; but is it really so? Is it a game of volumes or ticket-sizes? What are the challenges in terms of capital requirements to start such a venture? How long would it take to break even and start making profit? What would be the requirement in terms of skilled manpower? What area should be served and what volumes of tickets which would propel the graph of revenues upwards? What would attract the customer to the retail/online store? And finally, what will drive profits –Volumes / Ticket-sizes / Area covered / A healthy ratio of Revenues to Resources?

Another couple of questions which have an open ended answer w.r.t. to different firms would be –How fast to grow so that you don’t stretch yourself too thin to serve the clients efficiently? and on the other hand what should be the optimum number of resources to have for an optimum operation?

We aim to answer most of these questions by presenting the trend in the market and the expanse of it to gauge the scope of such a business in the Indian economy in the time to come. We also present the case of which has garnered multimillion dollars as investment from marquee investors and give an overview of how they are doing and at what rate are they expanding. In continuation to that, we offer a small study on the case of opening an Online Grocerystore and in what time we think will it break even. A rough calculation is also provided for the same.

This paper starts with details on the retail channels available in India and goes on to explain the advent of the online retail format and how it is here to stay for long. It briefly explains how the future is in the Omni-channel retail and the winner would be the one who decodes this Online-Offline Retail conjunction.

This study was done under the guidance of our Director & Professor in Digital Marketing & Metrics, Dr. Raja Roy Choudhury and the study would not have been possible without his insights and his guidance every step of the way. They say there needs to be a clear big picture and a goal before you dig the details. The big picture was clearly provided and articulated by Professor and the contents of the subject gave us a deep dive into the world of retail. Needless to say this paper was not a possibility without him.

We hope that this paper provides a complete picture of the future of Grocery Business in India to both an expert in the field and to a novice reader inquisitive on the subject.

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