Of Footfalls And Clicks
Both real and virtual experiences in retail will come together to transform India’s economy
Photo Credit : Ritesh Sharma
Retail is among the oldest activities of society. It is the most necessary human activity and will last as long as humans exists. Today, millions of entrepreneurs, and collectives of people add value to nature’s bounty and try to find buyers for their value-added products. Millions more find value in these products and reward them for their effort as consumers. Retail acts as the most crucial link in this activity.
The world’s largest retailer by revenues, Walmart is also among the largest employers and is also the biggest buyer of value added products and merchandise across the world. In China, Alibaba is widely acknowledged in transforming China’s domestic economy. In more ways than one, the governments in the US and China and almost anywhere in the world have played a crucial role in facilitating the growth of these mega-corporations.
In India, too, the role of modern retail and distribution in transforming the economy, aiding the growth of manufacturing and increasing the farmer incomes are becoming more evident. Modern retail is creating demand for a much wider range of value-added products, backed by temperature controlled logistics networks, modern infrastructure and incentives for food processors to multiply their existing capacity.
Rice that costs a farmer around Rs 15 per kg to produce can now be sold as rice flakes in cereals at over Rs 2,700 a kg. Tomatoes sold at Rs 20 a kg, can go through dozens of ways of value addition. Ketchups, curry powder or even personal care items made from tomatoes can increase its value anywhere from 10 to 100 times, thanks to the demand creation that modern retail can create.
Cotton of around Rs 50 changes into a shirt of Rs 500 and within it is the story of thousands of people who have earned their livelihoods from this economic transformation. The need of the hour for India is to ensure that this transformation happens across every agri produce in our country. And this can happen when consistent and growing consumer demand is created by the growth and transformation of modern retail.
To continuously create this demand, modern retail too is evolving. After a few years of growing mindshare of e-commerce models, the worlds of real and virtual retail are seamlessly merging. Over the past 12 months, Alibaba has picked up substantial stakes in four major retailers — department store chain Intime, consumer electronics chain Suning Commerce, grocery chain Sanjiang and Lianhua Supermarkets and has started its own fresh produce store, HEMA. It closest competitor, JD.com has bought into Yonghui supermarkets and is setting up experience centres and convenience stores. Amazon’s acquisition of WholeFoods and expansion of Amazon Books and Amazon Go stores are more widely known.
In fact, Alibaba now frequently champions its vision of New Retail as the harmonious integration of online and offline. In a column ‘Blended Future’ published in BW Businessworld in mid 2015, we had said, “The future, as is being proved in mature markets, lies in multi-channel retail that blends the benefits of real world retailing with that of virtual or digital interfaces.” This is today becoming a reality as we seamlessly integrate real and virtual experiences in every facet of retailing.
In the coming decades, retail will play a growing role in social and economic transformation in India. And much like our own lives wherein we live seamlessly in the real and digital world, New Retail will be a blended future of real and virtual experiences coming together as one.
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