High-profile acquisitions, Apple’s foray and the blend of online and offline experiences redefine India’s retail landscape in 2023
As 2023 concluded, the retail landscape experienced substantial changes where high-profile acquisitions and divestments were seen reshaping the corporate landscape. With the arrival of tech giant Apple in India, the direct-to-consumer (D2C) platforms and brands embracing the brick-and-mortar domain marking 2023 to be a game changing year for the retail sector.
Amidst these developments, the Reserve Bank of India (RBI) banned the Rs 2000 currency notes, redefining consumer transactions. The festive season in the country was also promising despite the inflation and other global headwinds.
In the following segments, we will dive into each development that shaped the retail sector in 2023.
Acquisitions All The Way
This year saw an influx of acquisitions with big giants acquiring or taking the lion’s stake in small brands/companies. Reliance Retail Ventures (RRVL) being one of the biggest players in the sector took a lead in the race of acquisitions. The company acquired a 51 per cent controlling stake in LOTUS, a 100 per cent equity share in Metro Cash and Carry India, a 51 per cent stake in Alia Bhatt’s Ed-a-Mamma, a 50 per cent stake in Gujarat-based Sosyo Hajoori Beverages, a 100 per cent V Retail.
Apart from this, the company also forayed into new segments and introduced its brands to expand its portfolio including Tira, Yousta, Glimmer beauty soaps, Get Real natural soaps, Puric hygiene soaps, Dozo dish wash bars and liquids, HomeGuard toilet and floor cleaners and Enzo laundry detergent powder, liquid and bars, Independence and more. Also, the Chinese fast fashion brand, Shein will return to India via a partnership with Reliance Retail.
Followed by Aditya Birla Fashion and Retail (ABFRL), the company acquired TCNS clothing; Titan acquired an additional 27 per cent stakes in CaratLane; Walmart stakes in Flipkart reached 80 per cent with additional investment.
The fast-moving consumer goods (FMCG) sector also took helm in the acquisition race where brands like Dabur acquired a 51 per cent stake in Badshah Masala; Hindustan Unilever acquired 51 stakes in Zywie ventures; ITC acquired a 100 per cent stake in Yoga Bar; Wipro Consumer Care completed the acquisitions of Jo, Doy, Bacter Shield and Nirapara, Brahmins; Godrej Consumer Products (GCPL) acquired the FMCG division of Raymond Consumer Care (RCCL); Emami acquired 26 stakes in Aaxiom Ayurveda; Marico acquired 58 stakes in Satiya Nutraceuticals, Tata consumer acquired 23 per cent stakes in south Africa based Joekels tea packers.
Global Expansion On Indian Soil
India’s rapidly growing pace has attracted several foreign brands and companies to the country, especially in the electronic sector. The tech behemoth Apple expanded in India with its two exclusive stores in two major cities, New Delhi and Mumbai.
Later, according to the reports, it was disclosed that Tata Group will soon manufacture iPhones in India for domestic and global markets. This was after the Tata Group took over Wistron operations in India. Apple’s Chief Executive Officer (CEO), Tim Cook has expressed confidence about a long-term working relationship with India.
In a bid to strengthen its presence in the Indian retail market, Apple initiated a global consumer promotion and student discount across its company-owned offline retail stores and online stores, alongside the establishment of around 200 franchisee-owned exclusive retail outlets.
Additionally, there are reports of Apple planning an expansion of its production operations in India, to increase its production value to approximately USD 40 billion within the next four to five years.
Apart from Apple, the parent company of Google, Alphabet Inc., also revealed its plan to manufacture Pixel smartphones in India and will partner with domestic and international manufacturers. The company also collaborated with HP to produce its Chromebooks in India. However, HP itself is expected to invest between Rs 250 to 300 crore to start its new manufacturing unit in India.
Other well-known companies such as LG Electronics and Dixon Technologies‘ subsidiary, Padget Electronics, have invested Rs 200 crore and Rs 256 crore in India, respectively. Whereas LG developed a new line to produce a premium range of side-by-side refrigerators and Padget Electronics will manufacture Xiaomi smartphones.
The consumer electronics brand, Casio also revealed its plans to expand in India with the intent to locally manufacture 30 per cent of its products in India in the long run.
Other than the electronic sector, other domains including FMCG and other beverage brands aspire to expand in India as well.
Global companies like Nestle and Coca-Cola aim to expand with an investment of Rs 4,200 crore and Rs 1,387 crore in India. However, Coca-Cola already invested in the new plant and Nestle is planning to invest gradually by 2025.
The British brands, Pret A Manger and Cobra Beer are optimistic about expanding in the country. Cobra Beer plans to revive the manufacturing and distribution channel in India and the UK-based food and organic coffee chain Pret A Manger opened its first outlet in India with Reliance Brands (RBL).
Click To Brick
Online platforms and D2C brands are embracing the brick-and-mortar format, as they must have realised the importance of touch and feel for consumer during shopping.
The ecommerce giant, Flipkart has recently extended its presence by inaugurating its initial grocery fulfillment centre in Odisha. This step aims to enable the quick delivery of groceries within 24 hours of order placement, nurturing the region’s economic development by providing a national platform for local sellers, MSMEs and small and medium farmers.
Additionally, D2C brands such as Licious, mCaffeine and Sugar Cosmetics are also expanding their retail footprint.
Licious opened its five new exclusive stores in the Delhi-NCR region. According to the company, these stores are designed to create a differentiated immersive space for avid Licious fans. mCaffeine too aspires to create roughly 1 lakh offline outlets by 2025.
On the other hand, Sugar Cosmetics is now expanding in offline mode, opening experiential stores in tier one, tier two and metro. The company currently has more than 160 brand-owned stores.
Government’s Vision
In May, the Reserve Bank of India (RBI) withdrew Rs 2000 denomination banknotes from the circulation, leading to a chaos in an attempt to exchange or deposit their high-value currency in banks. This resulted in consumers opting for cash on delivery while buying on D2C platforms.
Furthermore, the Indian government released national retail trade policy to provide better infrastructure and increased access to credit for traders, with provisions to ensure easy and affordable credit, digitisation of retail trade, modern infrastructural support for distribution chains, promotion of skill development, improved labour productivity and effective consultative and grievance re-dressal mechanisms.
Festive Push
This year saw a surge in the retail sector during the festive cheer as sales of different segments improved. According to Redseer Strategy Consultants’s report, India’s online sales during festive months in 2023 were estimated to be worth about Rs 90,000 crore, 18-20 per cent higher than last year.
During the festive season, a significant consumer shift was observed, where electronic items were at the top of the consumer list.
Overall, 2023 was a flourishing year for the retail sector, despite the global headwinds including inflation, interest rates, energy prices and supply chain constraints. Going ahead traditional retail is expected to grow to USD1.38 trillion by 2030, as per market research firm Statista.
