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Retail Food Market and ICT
From 2006 – 2010, modern private retail chains in India achieved 49 percent growth
rate.
Supermarket revolution in 3 waves;
- In 1960 – 70’s – Government retail chains
- In 1970 – 80’s – Cooperative retail chains
- In 1990 – present – Private retail chains (Reardon & Minten, 2011).
Demand drivers include;
- Rising individual incomes and rapid urbanization,
- Shift in individual dietary patterns from carbohydrates to protein and vitamin-rich
diets,
- Increased intake of fresh veggies , fruits, meats, sea food, milk & dairy products,
- Preference for processed and semi-processed foods and
- Demand for constant supply of fresh and processed foods at economical prices.
Success due to unique characteristics;
- Driven by domestic capital investment,
- Early presence in small towns & cities and diversification in small format stores,
and
- Early presence in poor and lower-middle class food markets (Reardon & Minten, 2011).
Information & Communication Technology (ICT)
India has 970 million telephone subscribers; 572 million subscribers are based in
urban areas and 399 million subscribers live in rural areas.
A break up of the subscriber
base by mode indicates 944 million wireless subscribers, 27 million wireline subscribers
and 267 million Internet/ broadband subscribers, of which 181 million used narrow
band and 86 million, broadband (TRAI, 2015).
Prepaid subscribers form around
88.9 percent and 95.71 percent of the total subscriber base of the CDMA and GSM
segments, respectively (TRAI, 2015).
Recent ICT trends in food and beverage retail
sector include;
- Sales of food and groceries currently account for more than two-thirds of all retail
sales and the value of these sales is expected to nearly double to $686 billion
by 2020 (Bhattacharjee, 2014).
- $5 billion or 5 percent of total FMCG sales will be online by 2020, on the basis
of survey conducted among 1,600 online users spread across 8 cities covering eight
FMCG categories such as skin care, hair care, oral care, home care, infant care,
male grooming, beverages and food (Economic Times, 2015).
- Online purchases made through mobile phones in India have grown by more than 100
percent over the past two years, with the ability to shop on the go at 47.7 percent.
- The growing availability of apps that makes it easier to shop (45.3 percent) and
convenience (38.1 percent) have emerged as the most compelling reasons for driving
smart phone shopping (Indo-Asian News Service, 2015).