Rural sales are growing faster than the urban markets and would sustain depending on the government’s support, says Hindustan Unilever CMD Sanjiv Mehta. He said the recent farm reforms are in the right direction and would result in more technology and capital for the sector. Mehta highlighted that rural markets are showing higher growth in FMCG sales than urban areas, with the recent farm reforms set to bring about higher incomes in the rural areas.
“The growth of the e-commerce is clearly irreversible but the way I look at India, general trade, modern trade, e-commerce will co-exist and India is not only a country where the general trade would disappear,” Mehta said at a panel discussion at Massmerize 2020, which was organized by the FICCI. “The share of general trade, which includes small shops and kirana stores may come down but it would be a fatal mistake to write its obituary.”
Mehta, who is also the vice president of FICCI and chairs the FICCI FMCG Committee, pointed out that the cost of distribution in the grocery channels is absolutely fine, as there has been the benefit of proximity. He explained that people have gravitated to the nearby grocery shops because of the sheer convenience. The executive added that general trade would also be digitized and connected. “As modern trade goes to tier II and III cities, it is going to fillip in those cities and omni channel is going to be a bigger part of modern trade channels for the sheer convenience and benefits.”
Herjit S Bhalla, Hershey India Managing Director, believes general trade, which is also adopting modern techniques, is going to stay. “General trade is going to stay and its not going anywhere. If we actually look back at it, there is lot of e-com kind of behavior by general trade, as they are delivering on a phone call and talks to you,” Bhalla said. “Even during the peak of the lockdown, it was general trade which emerged as the savior for people due to its proximity.”