Changing Retail & Distribution
Source: Jumbotail
India's retail channels and the distribution landscape are likely to undergo rapid changes at a pace much faster than before. The General Trade will lose share but grow in absolute terms at least until circa 2026. All other channels such as EBOs, Modern Trade & E-commerce will grow.
Strong change drivers are in place including the growth of E-commerce and D2C businesses (or the digital-first brand), expansion of modern trade, up-gradation of kirana stores & the advent of B2B e-commerce players like Udaan and Jio Mart(also called aggregators). It is possible that aggregators can take away 5-25% of the market share depending on the geo and product. This will lead to deep implications on the economy, brands, kiranas, distributors & D2C companies.
Brands are facing the following tough questions
- • Is it possible to modernize, make more agile and efficient the distribution network without losing its relationship with retailers?
- • How will traditional distributors be impacted? What new capabilities will be needed?
- • How should they approach aggregators?
- • How can they manage the channel conflict?
- • How can technology be used to achieve the above? What new capabilities must be developed or outsourced?
To understand what strategic options you have as a brand or as a D2C company, please read this well-researched paper of ours
