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Operating in the Indian retail market—selected trends and challenges

Selected trends in India’s retail sector include—

  • Improving operational effectiveness— Retail&Consumer companies are optimising operations, streamlining the movement of goods, increasing efficiencies and assessing stores. Retailers are assessing their supply chains, renegotiating rental agreements (since rental rates have fallen), establishing shop-in-shop formats and are closing underperforming stores

  • Focusing on product development— Indian Retail&Consumer companies are launching private labels in a range of categories, including apparel, beauty care, consumer durables, FMCG, food, footwear, home goods, household cleaners, etc. While these products may have a “no frills” approach in packaging and marketing, they satisfy consumers’ value preferences. India’s major retailers expect to increase the range and visibility of private label offerings, derive an increased share of revenue from the sales of these products, embark upon promotional offers and sales for such offerings and offer some of their private label products through other retailers’ outlets.

  • Increasingly sophisticated consumers— The Internet/media, global lifestyle influencers, increasing incomes, overseas travel and a preoccupation with celebrity culture are making Indians more aware than before. Sophisticated consumers are demanding access to new products in health foods and beverages, dietary supplements, health and wellness, skincare, etc.

  • Embarking upon a green agenda—Although nascent in India, some retailers are revising business strategies and embarking upon sustainable business practices to appeal to environmentally-aware consumers. Competitive forces are playing a role in encouraging the use of biodegradable packaging, adopting sustainable business practices, reducing carbon footprint, etc.

Strategic Issues for Retail CEOs* : Perspectives on Operating in India’s Retail Sector

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