Convenience Stores: India vs Global

The concept of shopping of general household items in India and other countries are a lot different. Here in India the majority of sales happens from the small scale retail shops, in recent years the concept of shopping mall like Big Bazaar, D-Mart, Reliance mart etc. with a very competitive prices has grown in India but limited to few cities only. And also to compliment them e-commerce for grocery like Amazon pantry, Big Basket has also taken some lead as they also provide the home delivery service and relieve the headache of all the travel, time to find the items and long queue for billing. Though Amazon pantry, Big Basket are trying to reach small cities to provide their facility but eventually the role of small retail shops cannot be replaced as they capture most of the rural part and most of the small cities in India.

Globally the concept of grocery shopping is little different, people use to buy their monthly grocery needs and household needs from big retailers like Amazon, Tesco etc at a very low and competitive price and the small retail stores plays the role of fulfilling the emergency needs or the needs of perishable items like fruits/vegetables, dairy products, poultry products etc. Also, globally the small stores are call as “convenience stores” as they provide you convenience of buying product when you are in hurry and hence they charge you more  and maintaining the records for POS help them a lot in keeping up the profit. Not all but some of these small stores use the records of sales to analyze forecasting, inventory management and pricing and become big giant of small retail stores chain like Seven 11. This is keeping balance in the share of retail sector between small and big retailers.

In India though the small stores have captured almost 80% share of retail market but lack of maintaining the records is not allowing them to grow with market growth. The MRP concept was bought so help the consumers as the market in India is not organised and consumers would become helpless without MRP, but it is also helping the shopkeepers for pricing of the product but because of this they are loosing the share of the competitive market gradually. The ideal scenario should be that MRP should be removed and big guns can play with more competitive prices and the small retailers can have the best price so that they also get enough profit to continue and grow their business. But is it possible in India, as of now the answer is “NO”. India is not ready for this and the convenience stores are also not ready to develop the mechanism to find out the best selling price, as to achieve this they would need to do a detailed analysis and neither they have infrastructure nor enough data for this.
But, GST could be something which can help them here. Because of GST now all the retailers will have to manage their POS(Point of sale) data, it has become necessary for them to invest some in maintaining the sales account to properly filling the GST. The POS data history is very important if you want to expand your retail business. Analyzing of your POS data can help you in expanding the business but also increasing the profit margin and if maintained properly this can also become another source of income for the small retail stores.

 

Disclaimer: Views expressed here are personal.

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