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Types of Outlet

Department stores
Large scale retail establishments comprising of a number of departments in the same building: clothes, electronic items, home appliances, cosmetics, jewelry, food items. Located in central places of big cities.
 Vishal Mega Mart
Supermarkets or self service store
Large scale retail shops operating at lower costs, selling at lower price.
Spencer's, Subhiksha
Convenience stores or General stores or Variety stores
All types of goods of regular use. They provide services like goods on credit and home delivery to their customers. Some of them may remain open 24/7.
Super Bazaars
These are large retail stores organized by cooperative societies.

They sell a variety of products under a single roof and at reasonable prices.
Super bazaars.

Multiple Shops or chain stores
These are a group of retail stores of the same type under one common ownership and centralized management but are located at various locations.
Specialized stores
These are the shops that deal in only one or two special types of goods. They are generally located in shopping centers.
Shoppers' Stop, Globus, Fabindia, Westside
Street stalls
These are the small shops on the roadside, street-crossing, bus stops, etc.

Evolution of the Retail Sector

Growth and Regulation
There has been a significant expansion in distribution channels in India during the past few years. Indian retail industry is one of the fastest growing in the world. According to Invest India, the overall retail market is set to cross the $2 trillion mark by 2032 from $690 billion in 2021. The Indian retail e-commerce market, which amounted to $72 billion in 2021, is also set to grow at an annual growth rate of 30% for a gross value of goods of $350 billion by 2030. Retail is India's largest industrial sector, currently accounting for over 10% of India's GDP and 8% of total employment.

Most Indian manufacturers use a three-tier selling and distribution structure that has evolved over the years. This structure involves redistribution stockists, wholesalers, and retailers. As an example, an FMCG company operating on an all-India basis could have between 40 and 80 redistribution stockists (RS). The RS will sell the product to between 100 and 450 wholesalers. Finally, both the RS and wholesalers will service between 250,000-750,000 retailers throughout the country. The RS will sell to both large and small retailers in the cities as well as interior parts of India. Depending on how a company chooses to manage and supervise these relations, its sales staff may vary from 75 to 500 employees.  Wholesaling is profitable by maintaining low costs with high turnover, with typical FMCG product margins anywhere from 4-5%. Many wholesalers operate out of wholesale markets. In urban areas, the more enterprising retailers provide credit and home-delivery.  Now, with the advent of shopping malls, companies talk of direct delivery and discounts for large retail outlets.

In 2021, e-commerce generated $63 billion in revenues, growing by 26% compared to 2020 (ecommerceDB). India will have 500 million online buyers by 2030, compared to 150 million in 2020, with digital spending projected to increase more than tenfold to $800 billion and account for more than a third of all retail sales by 2030.

Market share
India’s food and grocery retail industry is considered the third largest in the world with sales reaching $858 billion in 2022 and expected to grow annually by 8.17% (Statista). The food and grocery sector constitutes nearly 70% of the total retail market in India. The food retail sector in India is comprised of modern grocery retailers along with e-commerce, representing 10% of the market share and traditional retail formats, specifically neighborhood shops called kirana stores, which account for 90% of all retail sales.

Due to the Covid-19 crisis, the food retail sector in India has undergone changes.  India's largest food retailer, Reliance, has worked with WhatsApp to expand its presence in the e-commerce market by linking kirana shops to its online platform and supply chain. Due to blocking restrictions and social distance regulations, Indian customers have increasingly turned to e-commerce platforms to secure essential food supplies. Thus, many retailers have organised themselves with and commerce services, Amazon India has expanded its Amazon Pantry services to over 300 cities.

The unorganized sector in food retail is predominantly dominated by general stores, kirana stores, convenience stores and street markets. On the other hand, the organized sector includes gourmet stores, department stores, discount stores, supermarkets and hypermarkets, e-tailers and cash-and-carry formats; there are mainly Indian firms.

The major food retail chains in India are: Reliance Retail, Future Value Retail, Avenue Supermarts Limited, More Retail Limited, Star Bazaar, Spencer’s Retail, Walmart India, Spar Hypermarket and Namdhari’s Fresh.
Retail Sector Organisations
Retailers Association of India


Internet access
As of December 2017, India had an estimated 481 million internet users, 11.3% more than the previous year. While internet penetration in urban India is at 64.84% (up from 60.6% in 2016), in rural areas internet penetration has grown only a little - from 18% in 2016 to 20.2% in 2017. Delhi, Mumbai and Kolkata are the cities with the highest penetration. Online communication remained the top activity among urban users, whereas in rural areas entertainment is the most common reason for browsing the internet. The majority of internet users in India are male, with women estimated to represent only about 30% of total users. According to data released by the Telecom Regulatory Authority of India (TRAI), India’s mobile phone subscriber base has reached the one billion users mark, with a smartphone user base of over 300 million. India has topped the U.S. to become the second largest market for smartphones after China. Google is by far the most common search engine, with a market share of 97.6%, followed by Bing (1.4%) and Yahoo (0.9%).
E-commerce market
Indian e-commerce is growing at an annual rate of 51%, the highest in the world, and is expected to jump from US$ 30 billion in 2016 to US$ 120 billion in 2020. According to a Morgan Stanley report, India’s e-commerce market will be worth US$ 200 billion by 2026. As per industry body NASSCOM's latest estimates, India's e-commerce market was worth US$ 33 billion in the financial year 2017. India’s e-commerce sector is highly competitive, as it sees the presence of international marketplace players like Amazon, eBay, Alibaba and others competing alongside the domestic marketplace operators such as Flipkart, Snapdeal, TataCliq. Since 2014, the Government of India has announced various initiatives to propel e-commerce and internet usage in general, namely, Digital India, Make in India, Start-up India, Skill India and Innovation Fund. Technology enabled innovations like digital payments, hyper-local logistics, analytics driven customer engagement and digital advertisements will likely support the growth in the sector. Cross-border B2C e-commerce is growing fast, with automotive, baby supplies, toys, clothing, footwear, wearables and accessories, jewelry, watches, cosmetics, health products and digital entertainment and educational services being the leading product categories for international purchases. The major challenges restricting growth of cross-border e-commerce are high shipping costs, import duties and complexities in returns and exchanges. The Indian B2B eCommerce market is also expected to grow, reaching US$ 700 billion by 2020. In order to exploit the huge potential in the B2B e-commerce market in India, leading B2B companies have started to build their own platforms for small business owners and traders.
Social media
Social networks' penetration rate in India - at only 14% of the population – is one of the lowest rates in the world. Facebook is the most popular social network: India is the country with most Facebook users in the world (270 million) ahead of the US. Key Facebook users from India are aged 18-24, with more than three-fourth of the users being male. WhatsApp has more than 200 million users, followed by Messenger, Instagram (59 million), Google+ and Twitter (10.1 million) (Statista). The professional social networking platform LinkedIn has over 42 million users. Most active users on LinkedIn in India are in age group 24-35, with an almost even share of men and women.

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Distance selling

Evolution of the Sector
The World Federation of Direct Selling Associations (WFDSA) 2017 report shows direct selling in India grew 7%, was valued at USD 1.513 billion, and involves 5,102,231 independent representatives. 2017 retail sales by product category were divided as follows: wellness (53%); cosmetics and personal care (30%); household goods and durables (9%); and home care (4%) according to WFDSA.

According to Euromonitor International, direct selling in India is dominated by beauty and consumer health products (nutrition and well-being) offered by companies such as Amway India Enterprises, Herbalife International, Oriflame India, Eureka Forbes, and Avon Beauty Products India. Internet retailing increasingly pressures direct selling as a more convenient purchasing option, a trend that is most evident in metropolitan areas but not in semi-urban areas. Amway remained the leading direct selling company in 2017.

The Indian Direct Selling Association (IDSA) promotes best practices in the industry.

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Latest Update: June 2024