THE OLD ORDER changeth, yielding place to new! The famous phrase from Alfred Lord Tennyson’s classic poem Morte d’Arthur applies to the automobile industry more than ever before.
While the industry is going through the tectonic shift of transition to electric vehicles, there’s another dramatic change underway in customer preference. Sedan, the epitome of elegance and grace, which ruled the car market for decades — is dying. Not too far back, sedans lorded over the car market with more than one-third share, but that’s shrunk to about 10% today — and falling. Having peaked to a volume of 6.5 lakh a year in a market size of 19 lakh cars, sedans now sell less than 4 lakh annually in a market that has expanded to 38.9 lakh cars a year. As a result, in the past decade, the number of vehicles offered in the segment by carmakers has shrunk drastically from more than 24 to just 7 in 2023. Read why the sedan is dying, and who’s gaining at its expense.
In another industry, however, the old order is making a huge comeback. Brick and mortar retail, which weathered the onslaught of online retail for nearly a decade, is back with a bang.
The past year, particularly, has been among the best for India’s largest brick and mortar retail chains, both in growth and profitability. While Trent registered an 83% growth over FY22; Shoppers Stop grew by 60%; ABFRL’s revenue grew by 53%; and Lifestyle Retail closed the fiscal 50% higher than the previous one. India’s biggest retailer, Reliance Retail’s revenue grew 54% in FY23. The exponential growth in FY23 which showed signs of normalising in Q4 of the financial year is being attributed to some revenge buying after the pandemic. But that’s just one side of the story. Read Ajita Shashidhar’s detailed account of how the brick and mortar retail has fought its way back despite a rampaging online retail.
Staying with brick and mortar retail’s resurgence, India is seeing the advent of ambitious local retailers expanding their presence in regional markets at a pace never seen before. Almost every region has a local retailer who has mastered his craft often with a few stores, and is now going deeper within the state or neighbouring states. With their reach, they command substantial scale now. Grocery retailer Ratnadeep, set up way back in 1987, had 50 stores in Telangana and Andhra until 2019. Today, it has 140, in Telangana, Andhra Pradesh and Karnataka. Apparel player Sai Silk Kalamandir from Hyderabad has four formats — Kalamandir, Mandir, Vara Mahalakshmi and KLM — across 54 stores spread in Telangana, Andhra, Tamil Nadu and Karnataka, up from 20 in 2019. Another apparel retailer from Chandigarh, Kapsons has 30 stores in Punjab, Haryana, Uttarakhand and Jammu, up from 20 in 2019. Menswear player JadeBlue Retail has 66 stores in two formats — JadeBlue and Greenfibre — across Gujarat, Rajasthan, MP and Maharashtra, double the 33 it had pre-Covid. Read about what gives them the edge in their markets.
The special package this issue is Fortune India’s iconic ‘Most Powerful Women, 2023’. The project initiated by Fortune Inc. in the U.S. in 1998 has had a historic run for a quarter of a century now. The Fortune MPW remains the most authentic ‘ranking’ of the women who made their mark in business and economy. That package starts with a reality check of India Inc. on diversity.