Retail industry: Consolidation wave likely to continue in 2023 amid Covid clouds

New Delhi: The wave of consolidation is likely to hit the shores of the country's fast-growing retail industry next year also as larger players seek to strengthen their footprints, leverage technologies to improve efficiency and expand beyond metros. While the growth prospects are promising, the industry is entering 2023 with "cautious optimism" amid inflationary headwinds and concerns over spurt in coronavirus cases in different parts of the world.

After learning the lessons from the pandemic-induced disruptions, the retail players will continue with their multi-channel approach and marketplaces such as B2B (Business to Business) commerce and D2C (Direct to Consumer), and also focus on diversifying their supply sources.

Consultancy EY's India Leader - Consumer Products & Retail Angshuman Bhattacharya said India seems to be skipping the modern trade wave, with two of the large modern trade chains adopting a path of B2B commerce and kirana integration, with an ambition to create a data-unified retail environment.

D2C data, delivery information, and telecom data integration are likely to drive the eventual convergence of offline and online channels towards a "connected commerce" model of tomorrow, he said. According to him, the industry is likely to continue witnessing consolidation, as the scale gets driven through technology-led integration and efficiencies.

The Retailers Association of India (RAI) said the retail in the country is expected to grow better than all other key markets across the world. "The occasion-wear market (festivals, weddings etc.) will thrive in the country if no Covid restrictions are introduced," RAI CEO Kumar Rajagopalan said.

Reliance Retail, part of billionaire Mukesh Ambani's Reliance Industries Ltd (RIL), has become India's biggest brick-and-mortar retailer with over 16,600 stores.