The state of grocery retail in India

The grocery market in India has evolved considerably in the past decade. Here’s what you need to know about the changing face of demand, dynamics and disruption in the sector, and the implications for retailers and consumer-packaged-goods players alike.

With 12 million retail outlets, a million wholesalers and distributors, 1 and a multitiered structure, the Indian retail ecosystem is one of the most complex in the world. Over the past ten years, gradual shifts—such as the onslaught of modern trade, the entry of cash and carry, the advent of the e-commerce revolution, and, more recently, the growth in new-age B2B providers—have begun to transform this ecosystem.

To add to it, the Indian consumer has been evolving dynamically in their quest for convenience, health, and value. The pandemic that forced everyone to stay home further accelerated many of these trends. The year 2020 was defined by sinusoidal changes and uncertainties for the Indian consumer, and consequently for grocery retailers as well.

The grocery landscape has a transformation under way, with three factors guiding this shift.

  • Digital adoption: Approximately 500 million Indians are connected on the internet, and more than 100 million transact on it 2 —and India has seen one of the fastest accelerations in digital adoption anywhere in the world.
  • “Innovation for India”: A connected India has led to the birth of start-ups, which have built or adapted their operating models to the local context.
  • Emergence of ecosystems: Direct-to-consumer ecosystems have become a market-shifting force (exhibit).
There are five archetypes of disruption in the Indian grocery ecosystem.
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These visible, tectonic shifts in the grocery retail landscape are giving brands and retailers much to think about in the pursuit of popularity and profitability. The eventual path to success for retailers seems to be to strengthen their core and to be the first to develop new capabilities in omnichannel, analytics, and personalization. For brands, it could be critical to think about strengthening their core channels while shaping and building new ones and embedding the capabilities required to sustain these shifts.

Read the full report to learn more about the shift in consumer preferences, the evolving supply ecosystem, and to understand the implications for retailers, disruptors, and brands.

Download The state of grocery retail in India, the full report on which this article is based (PDF–1.3 MB).

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