After GST, small grocers shifting toward organized wholesalers such as Walmart and Metro

Goods and Service Tax has altered the way people do business in India, and the small retailers are a part of that change. A greater number of small grocers are rushing in to buy daily essentials from the bigbox format, such as Walmart and Metro Cash and Carry stores, a trend that companies expect to continue in the long term as they shift away from unorganized wholesalers yet to be GST compliant. Sanjiv Mehta, MD at Hindustan Unilever, said that “There would be some level of channel reset in which we believe that organized wholesale will become stronger. And just speaking to Walmart the other day, the numbers of customers they have enrolled in the last couple of weeks have been much higher than what they have done in the past, which is a very clear indicator that organized wholesale will go up”.

Though promising, it will be a long road for the organized wholesalers to achieve a market share of significance. As of today, nearly 2.6% of traditional trade in all consumer product goods (CPG) moves through organized wholesale and has been growing faster than modern trade, albeit on a lower base. Krish Iyer, CEO of Walmart India, also sounded positive with a bit of caution. He added that “There will be a process of education, although we didn’t expect memberships and sales to surge so quickly. GST will definitely benefit us in the long term as smaller customers get habituated to buying from organized channel”.