Posted on : 2023-02-17 03:01:03
Article : Good evening, Friday Management TASK 230- In early 2000, Groceries and FMCG retail has emerged as one of the fast-paced and dynamic sectors with arrival of new players. With e-commerce penetration there is a clear indication for supermarkets growth in stores numbers and new markets penetration.
In this TASK and Solution 230 article, we discuss on modern retail trade and role of supermarkets- their growths and falls. Many of the consumers know the super market brands but very few know their corporate portfolios as well as their business strategies and turnouts. With rising needs for consumer goods across different sectors, many companies have invested in the Indian retail space in the past few years. It has emerged as one of the most fast-paced and dynamic industries due to the entry of several new players. India’s retail sector attracted US$ 6.2 billion from various private equity and venture capital funds in 2020. Along the side of brick-and-mortar retail stores e-commerce is also expanding steadily in the country. With a plethora of products available at the low prices, the trend will revolutionize the retail industry. Moreover, retailers are leveraging digital retail channels to reach out to customers in tier II, tier III cities and rural. As an introduction let us look at the history of retail businesses and the changing customer behaviour. Retail in India has travelled through different phases. The history of retailing goes back to the era when the barter system came into existence. The introduction of currency gave rise to commerce activities, and small entrepreneurs set up shops to sell medicines, groceries, hardware, etc. Small kiranas or general merchants became an integral part of the daily lives of people. In this way, retail gained recognition as a professional activity. This evolution led to the surge of two categories of retailing. One is the store retailer, the other one being the non-store retailer, and the virtual store or retail on the internet. Here the brick-and-mortar stores are kirana, convenience stores, Super markets, or Hypermarkets or standalone stores in malls.
Added to this, Consumer behaviour is changing and so are retail needs. Technology and in-store retail are collaborating to eliminate traditional central store purchases and disrupt the whole industry. There is an emerging need to create innovative customer-centric shopping experiences to meet the needs of modern shoppers. With the current store layout not fulfilling that, the future stores will need to adapt to keep customers coming in. In fact, this modern retail chain of super markets presence is seen since late 90’s and their growth under different brands raised in early 2000. The chain super markets are either domain, regional or national spread. In AP the first chain super markets were Trinetra which had 100 stores locations in United Andhra Pradesh, this was sold to Aditya Birlas in 2004-2005 which started MORE supermarkets. Looking at the prosperity of supermarket business modes many corporates have stepped into this business like Birlas 2007, Reliance 2006, Future Group Big Bazaar 2001 led by Kishore Biyani, which is now taken over by Reliance, D Mart 2011 started by Damani and Heritage foods group’s Heritage Fresh 2015 in Andhra pradesh India which was later merged with Bigbazaar, now many stores were closed and rest are changed as Jiomart. All super markets stock and sell groceries, vegetables, dairy products, food products and personal FMCG products/brands catering to all age groups and sections of society. When the government has opened up FDIs into retailing with certain conditions, many global retailers like SPAR, WALMART etc have arrived into India through collaboration with Indian companies in foreign lands.
This modern retail stores market is evolved for the betterment of market capitalisation by the brand marketers and benefit for the consumers as well as the supermarket brand owners. Unfortunately, few supermarket brands have gone for acquisition or joint venture modes due to incompetent running of the establishments or market factors. In the solution part of this TASK we will discuss about Kishore Biyani’s Big Bazaar -its glorified years and ultimate sale to Reliance and Amazon.
Post your perceptive comments on supermarkets business models and inputs on Kishore Biyani’s ventures. Our Solution part will be posted on our Good Morning Monday Management Solution for TASK 230 on 20th Feb 2023.
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