Evolution of Retail in India

While barter is considered to be the oldest form of retail trade, retail in India has evolved to support the unique needs of our country given its size and complexity. Haats, Mandis and Melas have always been a part of the Indian landscape. They still continue to be present in most parts of the country and form an essential part of life and trade in various areas.

The PDS or the Public Distribution System would easily emerge as the single largest retail chain existing in the country. The evolution of the public distribution of grains in India has its origin in the ‘rationing’ system introduced by thee British during the World War II. The system was started in 1939 in Bombay and subsequently extended to other cities and towns. By the year 1946, as many as 771 cities/towns were covered. The system was abolished post war on attaining Independence, India was forced to reintroduce it in 1950 in the face of renewed inflationary pressures in the economy. A detailed discussion forms a part

Tracing the evolution of Indian retail would be incomplete without a mention of the canteen Stores Department and the Post Offices in India.

The Khadi & Village Industries (KVIC) was also set up post independence. Today, there are more than 7,050 KVIC stores across the country. The co-operative movement was again championed by the government, which set up Kendriya Bhandars in 1963. In Maharasthra , Bombay bazaar, which runs stores under the Sahakari Bhandar and Apna Bazaars run a large chain of co-operative stores.

In the past decade, the Indian marketplace has transformed dramatically. However, from the 1950’s to the 80’s investments in various industries was limited due to the low purchasing power in the hands of the consumer and the government’s policies favoring the small scale sector. Initial steps towards liberalization were taken in the period of 1985-90. It was at this time that many restrictions on private companies were lifted, and in the 1990’s, the Indian economy slowly progressed from being state led to becoming ‘market friendly’.

While independent retail stores like Akbarally’s, Vivek’s and Nalli’s have existed in India for a long time, the first attempts at organized retailing were noticed in the textiles sector. One of the pioneers in this field was Raymond’s, which set up stores to retail fabric. It also developed dealer network to retail its fabric. These dealers sold a mix of fabrics of various textile companies. The Raymond’s distribution network today comprises of 20,000 retailers and over 429 showrooms across the country.

Other textile manufacturers who also set up their own retail chains were Reliance which set up Vimal showrooms and garden Silk Mills with Garden Vareli. It was but natural that with the growth of textile retail, readymade branded apparel could not be far behind and the next wave of organized retail in India saw the likes of Madura garments, Arvind Mills etc set up showrooms for branded men’s wear. With the success of the branded men’s wear store, the new age departmental store arrived in India in the early nineties.

Traditional formats:

1) Itinerant salesman
2) Haats
3) Moles
4) Mandis, etc

Established formats:

1) Kirana
2) Convenience / Department stores
3) Company / Multi brand showrooms
4) PDS / Fair Price shops
5) Co-operative stores
6) Pan / beedi shops

Emerging formats

1) Exclusive retail outlets
2) Hypermarkets
3) Internal retail
4) Malls / Specialty malls
5) Multiplexes
6) Rural oriented formats
7) Fast food outlets
8) Service galleries etc

This was in a sense, the beginning of a new era for retail in India. The fact that post liberalization, the economy had opened up and a new large middle class with spending power had emerged, helped shape this sector. The vast middle class market demanded value for money products. The emergence of the modern Indian housewife, who managed her home and work led to a demand for more products, a better shopping ambience, more convenience and one stop shopping. This has fueled the growth of departmental stores, supermarkets and other specialty stores. The concept of retail as entertainment came to India with the advent of malls. The development of malls is now visible not only in the major metros but also in other parts of the country.