New Delhi: With an epic battle of billionaires for supremacy in one of the world's most prolific markets and a pandemic-propelled surge in online shopping in the background, India's nearly trillion-dollar retail market is hoping to touch 85 per cent of the pre-COVID business in the first half of the new year.
In a year when the COVID-19 carnage ripped apart the retail business, circa 2020 will best go down for the unravelling of the war between Jeff Bezos, the world's wealthiest man, and richest Indian Mukesh Ambani for pre-eminence in the booming market that is estimated to reach $1.3 trillion by 2025.
It all started with Ambani's Reliance Industries agreeing in August to buy assets of the nation's second-largest retailer for Rs 24,713 crore, just a year after Bezos' Amazon purchased an indirect stake in the indebted Future Retail. Amazon opposed the deal, claiming it violates Future Group's investment agreement with it.
Since then, the story has been playing out in Singapore and Indian courts, and the outcome may shape India's retail landscape for years to come.
Amazon's success will slow Reliance's plans to expand its e-commerce business and the country's largest offline retail chain while a win for Ambani, who has already armed himself with Rs 47,265 crore of funds raised through minority stake sales in his retail venture in a matter of 45 days during COVID-19 period, will put brakes on expansion plans of the US giant.
That apart, the $854 billion (Rs 63 lakh crore) retail sector is hoping that the first half of 2021 would bring it close to normal levels of business although industry players feel that recovery will not be possible without 'unconventional solutions and government support'.
Shuttered shops, zero revenue for months, inability to pay rentals and struggle with working capital for some while for others, the struggle was to deal with huge spikes in demand and cope with supply chain challenges, the story of 2020 for Indian retail sector under the spell of the COVID-19 has been one of contrasting fortunes.
While piles of unsold inventory turned into modern trade outlets' biggest nightmare, local kiranas and e-commerce established themselves as a reliable channel with a steady supply of essentials, vegetables, packaged food and other FMCG products during the lockdown.
"The pandemic taught retailers a concept called essential and non-essential from a government action perspective. Segments such as apparel, jewellery, shoes and CDIT (Consumer Electronics, Durables, IT and Telephones) among other non-essential categories reported 100 per cent loss of business during the lockdown as all stores were closed," Retailers Association of India (RAI) CEO Kumar Rajagopalan said.
Essential category players also faced challenges, albeit of a different kind -- dealing with huge spikes in demand, coping with supply chain challenges, ensuring liquidity, modifying and managing store operations to maintain safety standards, taking care of employee health and grappling with shortage of staff, he added.
With potential vaccines expected to hit the market in early 2021, large modern retail companies and offline retail stores are cautiously optimistic about people venturing to shop like in pre-COVID times even as they have accelerated omni-channel models, fast-tracking their digital route to reach consumers.
"Retailers are hopeful of achieving about 85 per cent of pre-COVID levels of business in the first six months of the year 2021," he said. However, he also said that although globally, COVID-19 vaccinations have started, the pandemic situation may take some more time to completely settle, and thus retailers should move ahead with cautious optimism in
2021.
Spencers & Natures Basket Managing Director and CEO Devendra Chawla said, "we are very optimistic about the coming year with demand picking and supply constraints getting eliminated, we are looking forward for a good 2021".