Distribution and Retail
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| E-COMMERCE |
| GEMS AND JEWELLERY |
| RETAIL |
eCommerce
The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology, and training and has a favorable cascading effect on other industries as well. The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest E-commerce market in the world by 2040. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement, and digital advertisements will likely support the growth in the sector. Over the next five years, the Indian e-retail industry is projected to exceed ~300-350 million shoppers.
Some major challenges faced by this industry include low profitability, warehouse and inventory management, returns and cancellations, packaging and logistic challenges, stress working capital, Legal complications, and online security issues.
References: Media Reports, Press releases, Business Standard, Economic Times, LiveMint, Times Now, Times of India, IBEF.
Disclaimer: This information has been collected through secondary research and Infominer is not responsible for any errors in the same.
Gems and Jewellery
India ranks first among the top exporters in cut & polished diamonds, and second in gold jewellery, silver jewellery and lab-grown diamonds. Based on its potential for growth and value addition, the Government declared the gems and jewellery sector as a focus area for export promotion. The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India’ in the international market. The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India.
According to the ‘Online Gold Market in India’ report by The World Gold Council, the online gold market in India, which was relatively nascent at 1-2% (as of 2020), is witnessing a strong push from both digital players who view this market as an opportunity and large jewellers who view this market as a required addition to their brick-and-mortar model.
Road Ahead
In the coming years, growth in the gems and jewellery sector would largely be contributed by the development of large retailers/brands. Established brands are guiding the organized market and are opening opportunities to grow. Increasing penetration of organized players provides variety in terms of products and designs. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low-cost gold metal loans and likely stabilization of gold prices at lower levels is expected to drive volume growth for jewellers over the short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.
References: Media Reports, Press Releases, Reserve Bank of India, Gem & Jewellery Export Promotion Council, IBEF.
Disclaimer: This information has been collected through secondary research and Infominer is not responsible for any errors in the same.
Retail
India is the world’s fifth-largest global destination in the retail space. Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many companies have invested in the Indian retail space.
The government of India has allowed 100% FDI in the online retail of goods and services through the automatic route, thereby providing clarity on the existing businesses of e-commerce companies operating in India. The government’s focus to improve digital infrastructure in Tier 2 and Tier 3 markets would be favorable to the sector.
Road Ahead
E-commerce is probably creating the biggest revolution in the retail industry, and this trend is likely to continue in the years to come. Retailers should leverage digital retail channels (e-commerce), which would enable them to spend less money on real estate while reaching out to more customers in tier II and tier III cities.
References: Media Reports, Press Releases, Department of Industrial Policy and Promotion website, Consumer Leads report by FICCI, IBEF.
Disclaimer: This information has been collected through secondary research and Infominer is not responsible for any errors in the same.