The Myth
There has been a lot of hue and cry about FDI in retail since 2012. If you look at the news stories in the media you’ll get the impression that ‘retail’ means showroom chains, hypermarkets and departmental stores for high income group urban consumers. Although the Indian retail market has been valued at $600 billion, it has been concentrated over tier 1 and tier 2 cities.
The Reality
Less than 30% of the Indian population live in tier 1 and tier 2 cities. Major Indian and International retail chains constitute less than 8% of the Indian retail sector. There are more than 15 million small retailers, kirana shops and beedi shops in India. The unorganized retail sector is a giant untapped source of revenue that has largely been unnoticed by the so called ‘mainstream’ retail players.
The Gap
Indian unorganized retail has been a long, unbroken and proud tradition of self employment, local business and extreme market penetration and still does not enjoy any benefit from modern technology. The supply chain (except for some brands) is not robust. If these gaps could be filled even to a small extent, it would represent a huge revolution in the retail industry.
Filling The Gap
Pay1 is one of the few organizations that are looking to organize the unorganized Indian retail and empower them with the latest technology and insights.
The next retail revolution will come from sleepy little villages and dusty forgotten towns instead of big, shiny malls in giants supercities. Just a thought.
