What is modern trade?


What is modern trade

What is modern trade?

Modern trade refers to the organized retail sector that includes large format stores, supermarkets, hypermarkets, and chain stores. These modern trade outlets are characterized by their standardized formats, professional management, centralized buying, and sophisticated supply chain management systems.

In India, modern trade has emerged as a significant growth opportunity for businesses. The Indian retail market is estimated to be worth around USD 1.1 trillion, and modern trade accounts for around 8% of the total retail market. The modern trade segment is expected to grow at a CAGR of around 20% over the next few years, driven by rising incomes, changing consumer preferences, and increased urbanization.

There are several business opportunities in modern trade in India, including:

  • Retail chain/franchise: Businesses can establish their own retail chains or franchise stores in modern trade outlets.
  • Private label products: Companies can develop their own private label products and sell them through modern trade outlets.
  • Supply chain management: Companies can provide supply chain management services to modern trade outlets, including logistics, warehousing, and distribution.
  • Technology solutions: Businesses can develop technology solutions to help modern trade outlets manage their operations more efficiently, including point-of-sale systems, inventory management systems, and customer loyalty programs.
  • Consumer goods: Companies can manufacture and sell consumer goods, such as packaged foods, personal care products, and household items, through modern trade outlets.

Overall, modern trade presents a significant growth opportunity for businesses in India, especially those that can offer innovative products, services, or solutions to meet the changing needs of consumers and modern trade outlets.

Here are some additional details on the modern trade sector in India and the opportunities it presents for businesses:

  • Growing middle class: The rise of a growing middle class in India has led to a shift in consumer preferences towards modern trade outlets. The middle class is becoming more affluent, and as a result, there is a growing demand for high-quality products and services that are available in modern trade outlets.
  • Increased urbanization: As more and more people migrate to cities, the demand for modern trade outlets has increased. Cities are the hub of modern trade outlets in India, and they provide a massive opportunity for businesses to expand their operations.
  • Digitization of retail: With the increased adoption of technology in retail, businesses that can offer innovative solutions to modern trade outlets, such as mobile apps, online ordering, and digital payments, are likely to succeed.
  • Foreign investment: The Indian government has recently relaxed the rules around foreign investment in modern trade outlets. This has led to an influx of foreign investment into the sector, which is likely to drive growth and create new business opportunities.
  • Private label brands: Private label brands are gaining popularity in modern trade outlets in India. Businesses that can develop and market their own private-label brands have the potential to create a loyal customer base and establish themselves as leaders in the market.
  • Regional markets: India is a diverse country with a wide range of regional markets. Businesses that can cater to the unique needs and preferences of different regions have the potential to capture a significant share of the market.

In conclusion, modern trade presents a significant growth opportunity for businesses in India. With the right strategies and innovative solutions, businesses can tap into this growing market and establish themselves as leaders in the sector.