Akash Mitra dissects the evolving Indian retail landscape, revealing how traditional and modern trade coexist with the explosive growth of e-commerce. He explains why understanding these channel shifts and "big day" strategies is crucial for FMCG and AgriTech businesses to capture market share.
People have shifted from traditional trade to organized trade, and within organized trade both modern trade and e-commerce are taking the share.
— Akash Mitra, Bijak, sharing how Modern Trade is approached in FMCG and AgriTech. There is no doubt t
The Indian retail landscape is a dynamic ecosystem, broadly segmented into Organized Trade, Unorganized Trade, and E-commerce. Organized Trade encompasses both modern trade (supermarket chains like Shoppers and Reliance Smart) and master wholesale platforms such as Metro Cash and Carry, catering to a structured shopping experience.
In stark contrast, Unorganized Trade refers to the ubiquitous local grocery stores (kiranas) and street vendors that continue to control the bulk of the market, especially for daily essentials. E-commerce platforms, including giants like BigBasket and rapid delivery services like Zepto, represent the third and fastest-growing segment, leveraging digital convenience.
Retailer-driven promotional events, often centered around national holidays such as Republic Day, Independence Day, and major festivals like Diwali, are crucial for driving significant sales spikes in organized trade channels. These periods, termed 'Big Days,' are strategically leveraged to achieve double-digit growth.
Both modern trade and e-commerce platforms aggressively campaign during these times. E-commerce often gains an edge due to its lower operational overheads, allowing for more aggressive discounting and promotional offers that can outcompete physical stores. Strategic planning around these 'Big Days' is vital for maximizing market capture.
Within organized retail, AgriTech's primary focus shifts from just farming methods to the structured sourcing, packaging, and compliance of agricultural produce. This ensures traceability and quality assurance, a stark contrast to the unorganized market where product origins are often obscure.
For instance, in modern trade formats like Smart Bazaar or Reliance Fresh, fruits and vegetables are meticulously packed and labeled according to the Legal Metrology Act. This includes details on origin, price, weight, and expiration dates, providing consumers with transparency and building trust. Unorganized street vendors, however, typically sell produce without such detailed information, making traceability virtually impossible.
E-commerce and Direct-to-Consumer (D2C) platforms possess a significant competitive advantage due to their substantially lower operational overheads compared to traditional brick-and-mortar modern trade stores. This efficiency stems from reduced costs in manpower, electricity, and rent, which are inherent to physical retail.
The ability to operate with lean digital structures allows these platforms, exemplified by the rapid rise of unicorns like Zepto, to offer more aggressive promotions and better deals to consumers. This cost efficiency often enables them to outperform physical stores, particularly during high-stakes 'Big Day' sales events, by passing on savings in the form of attractive discounts.
Despite the undeniable rise of e-commerce and its cost advantages, the physical retail experience offers unique benefits that digital platforms struggle to replicate. These include the immediate gratification of a purchase, the ability to physically interact with products, and the invaluable human touch of personalized service.
As the expert notes, "retail experience is something which that cannot be compensated." In a physical store, customers can receive direct guidance from staff, gaining insights into market trends or product suitability, which allows for more informed choices. This human interaction and sensory engagement provide an irreplaceable value proposition for brick-and-mortar outlets.
Despite the rapid growth of e-commerce unicorns like Zepto, major players such as Reliance and Spencers are actively opening new physical shops. FMCG products, in particular, remain a significant driver for the success of these new store openings, indicating a continued demand for the physical retail channel and its experiential advantages.
While AgriTech encompasses vast areas like using drones, fertilizers, and sustainable farming, in the context of organized retail, it specifically means sourcing products like fruits and vegetables from farmers/FPOs, ensuring they comply with regulations like Legal Metrology for traceability, packaging, and labeling, rather than just farming techniques.
Even though modern trade and e-commerce are gaining ground, traditional grocery stores still account for 86.3% of FMCG sales (Q1 this year, down from 88.5% last year). The sheer number of these stores far outweighs modern supermarkets in most areas, demonstrating their continued dominance in daily consumer goods and local accessibility.
Focus on understanding the unique needs and operational models of traditional, modern, and e-commerce partners. Negotiate "Big Day" promotional slots and terms to maximize visibility and sales volume, especially in organized retail.
Design your product and supply chain to cater to the distinct requirements of each channel—from bulk distribution to kiranas, structured delivery for modern trade, and efficient D2C logistics. Prioritize traceability for AgriTech products to build brand trust.
Develop tailored marketing messages for in-store experiences versus online promotions. Utilize digital marketing's cost efficiency to amplify "Big Day" offers and drive traffic, while still supporting the unique experiential value of physical stores.
Gain practical knowledge of supply chain dynamics, consumer behavior across different retail formats, and the impact of digital transformation. Understanding the interplay between traditional, modern, and e-commerce is crucial for future career growth in FMCG and AgriTech.
Retail experience is something which that cannot be compensated.
— Akash Mitra, Bijak, sharing how Modern Trade is approached in FMCG and AgriTech. There is no doubt t
Sales Head at Bijak, sharing how Modern Trade is approached in FMCG and AgriTech. There is no doubt t
Akash Mitra, a seasoned sales leader, brings extensive experience in the fast-moving consumer goods (FMCG) and AgriTech sectors. Currently leading sales at Bijak, he provides invaluable insights into navigating India's complex retail environment, emphasizing the strategic importance of both modern trade and organized AgriTech channels. His expertise covers understanding channel shifts and leveraging key promotional events to drive market share.
Sales Leadership · FMCG & AgriTech Expert · Channel StrategyJoin thousands of Indian professionals learning from industry experts.
Explore All Courses →