Retail outlets in India: use them, or use online sales?

India retail outlets: use them, or use online sales?

Entering the retail industry in India

The retail industry in India was worth around $600 billion in 2015. It is still one of the pillars of the Indian economy, having gone through a host of innovations and new entrants in the past decade.

India's retail industry

The country’s retail sector is composed of eight major categories namely:

  1. Food and Grocery
  2. Apparel
  3. Consumer Durables
  4. Information and Communications Technology
  5. Jewelry and Watches,
  6. Pharmacy
  7. Furniture and Furnishing
  8. Footwear and others

According to India’s country data, this industry will continue to grow by a whopping 12 to 13 percent till 2019. With the entry of foreign companies, retailing is expected to reach new heights in India in the next few years.

Retail outlets in India

Retail outlets in India include corner stores, markets, and shopping malls.

The “Kirana” stores are small neighborhood stores usually owned by families. These are located in almost every corner in India, totaling to an estimated of 12 million stores nationwide. They usually offer daily household products such as grocery items.

The High Street or commonly called the Khan market, on the other hand, is a premium outdoor market. It is deemed to be the costliest in India, with rent ranging from $200-235 per square meter. In fact, real estate firm Cushman & Wakefield rated this option as the world's 21st most expensive retail high street, in 2010.

Malls are becoming a fad in India with this format emerging as a favored shopping destination. Every urbanized locality has supermarkets and shopping malls complete with retail outlets, food courts, and other entertainment options, making them frequently visited venues.


Modernisation and policies

With the advent of technology, increased products, entry of international companies, and the widespread trend of consumerism, there is a massive opportunity to enhance the Indian retail industry.

Country data says India is second to China when it comes to the percent of revenue made from unorganized retail. The country has more unorganized retail than organized ones. Due to this, policies are being pushed to stimulate organized retail. These policies also aim to create more opportunities for global players. Indian policies have been reforming although this reform is slow-paced.


To further improve India’s retail industry, localization is important. According to the Federation of International Trade Associations, localization is the customization of all components of a product for a particular target market.

In India, for example, the Audi became a successful brand as its signal horn was specifically designed for the Indian market.

In another attempt to cater to local needs, Unilever started manufacturing goods such as shampoo, tobacco, and detergents in small packages especially for the Indian consumer market. In this way, they earned massive growth particularly in the country’s rural areas. Instead of selling shampoos in bottles, they placed it in sachets. People in the rural areas bought their products because of their appropriate quantity, good quality and suitable one time pricing.

Online retail and e-commerce

With modernization comes online retail. An increased number of people are engaging in the online mechanism as it is more convenient.

Web penetration has grown fast in India, making it the third country worldwide with the largest internet base. The e-commerce industry has been rising since 2014. Products like gadgets, clothes, cosmetics, accessories, books, and furniture, among others, can be obtained in just a click. Indeed, online retail has reshaped the world of commerce, making it possible for people to buy what they want through the virtual world.

This entry in Asia was updated on May 4, 2018 by specialist.