The organised grocery business is a very challenging sector. It requires substantial long-term investments and the returns are often not commensurate in the early years. Competition in this sector is growing every single day with new online and offline players entering the market.
Unorganised retail continues to grow with new neighborhood outlets opening literally every day, making this one of the most competitive sectors in the country. The industry also faces massive challenges in procurement, transportation, distribution, infrastructure, investments, technology and manpower.
At the same time, e-commerce is expanding at a frenetic pace and is expected to dominate the future of retailing in urban India. While brick and mortar sector will continue to grow, online retailing will bring in much needed conveniences for shoppers and save on the time that is often spent on travel and navigating in- store shopper traffic.
Despite all of these challenges, retailers who make calculated strategic growth decisions and invest in the right channels will benefit from the potential this sector offers. The Indian grocery sector is currently valued at close to Rs. 17 trillion and that is not a small number. With India’s rising population, increased consumption and growing economy, it will continue to be a sizeable opportunity for players resilient enough to stay invested for the long term.