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Progressive Grocer December 2017

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As rural India gains heft in purchasing power, the ubiquitous kirana shops will make further inroads into the country’s hinterland and reach places that remains out of bounds to modern retail. But the time has come for supermarkets to sally forth into many un-served or under-served districts of the country where the latent demand for modern retail service can be kindled. As transportation infrastructure and logistics across the country are improving steadily, the markets lying deep within the country can be profitably tapped by modern retail. Many retailers are now taking it upon themselves to develop personalized supply chain systems that ensure timely and nationwide delivery. On the other side, specialist companies with the know- how and expertise that comes with foreign equity participation, are increasingly making their presence felt.

These untapped markets can prove to be a fertile ground for modern grocers in India, many of whom are investing heavily in private labels to counteract the high costs associated with real estate and supply chain investment. Consumers in smaller towns and cities of India are price sensitive but highly value-conscious and private labels of modern retailers stand a bright chance of scoring high with the value-minded consumers of India’s backlands. Yes, it will require an extremely well-honed and sharp strategy to overcome the deficiencies of supply chain, logistics, power, and other challenges inherent to these backwoods. But then, nothing comes easy and modern retail will have to invest early in the markets of little India in order to reap the market dividends down the years.

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