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Expansion plans across both small and large format stores.

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Future Group has said home deliveries of dairy products will start in two weeks.

Orders made through a mobile app

In conjunction with plans to launch 1,000 outlets under the Easyday, Nilgiris and Heritage banners, Future Group has announced its intent to enter the home delivery segment. As a first step, milk, bread and eggs will be made available for home deliveries in the major metro cities. Subsequently, there are plans to extend this to include fruits, vegetables and other groceries.

Shoppers will place their orders through a mobile app. The nearest store within a two to three-kilometre radius will then work with various logistics firms to fulfil the order. The retailer recognises that fresh, daily deliveries of these items from a central warehouse is unfeasible and hence, will make use of their store network to support home deliveries.

Part of a bigger plan

The plan to provide the milk delivery services follows the retailer’s announcement last month that it will open 10,000 stores all over India. The milk delivery platform is part of Future Group’s launch of a new retail business model. This model blends technology with bricks and mortar and, if successful, will enable Future Group to become Asia’s largest integrated consumer retailer.

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Plans to significantly expand store network as part of growth strategy.

Small stores dotted across India

India’s largest retailer, Future Group, has announced plans to expand its store network with the opening of 10,000 small stores across the country. Operating under the “Easyday” banner, these stores will be no more than 2,500 sq ft and will be based on a members-only format. The company is targeting to enrol about 20m members.

The company currently operates around 1,700 stores, including small and large outlets, and this plan will grow the retailer’s small store network by ten times. “We expect our small-format stores to overtake Big Bazaar in the next four years,” said Future Group founder Kishore Biyani.

Growth strategy for other banners

As part of its digital strategy, the company also announced plans to invest USD$14.7m to integrate technology with its bricks-and-mortar stores in India. These innovations will involve their other banners such as Nilgiris and Heritage.

Future Group has already started testing a scan-and-go facility at some of its Nilgiris supermarkets. This is a facility where customers can shop by scanning the barcodes of products using their mobile application and the selected products would be delivered directly to customers’ homes.

The company will focus on providing quality, convenience and competitive prices to its customers through a membership program similar to Amazon Prime. Additionally, there are plans to form alliances with different suppliers to value add to the membership program.

 

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Further consolidation in India grocery market seems likely.

Largest listed retailer in India exploring options

Future Group, led by CEO Mr. Kishore Biyani, is seeking collaborations and partnerships to enhance its market share. In a recent statement, Mr. Biyani said that India’s largest listed retailer may acquire an ecommerce platform or sell a minority stake to a “strong global retailer”. Future Group has held early talks with Amazon, although nothing has been announced yet.

The Future Group has grown consistently over the years through a series of acquisitions of supermarket store chains such as HyperCity and Nilgiri's and Sangam Direct. It currently has a total retail space of more than 13m sq ft, across more than 900 stores in India.

Response to Walmart's acquisition of Flipkart

A strategic partnership would also make sense for Amazon as this would allow them to enter brick-and-mortar retail in India. It also ensures that the ecommerce giant remains competitive in the wake of Walmart’s recent acquisition of a majority stake in Flipkart, India’s leading ecommerce operator.

 

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Future Group is negotiating a deal to acquire large format retailer HyperCity, in an attempt to expand its presence across India. A deal is expected to be reached by the end of this month.

Around 20 stores added to its network

HyperCity operates around 20 hypermarkets in a number of different cities across India; Mumbai, Hyderabad, Bengaluru, Bhopal, Ludhiana, Amritsar, Jaipur, Pune, Ahmedabad, Delhi and Noida in Delhi-NCR. Food accounts for around 65% of HyperCity's sales, meanwhile a similar percentage of sales for Big Bazaar, Future Group's flagship banner, comes from non-food categories. It will be interesting to see if Future Group alters HyperCity's product mix of food and merchandise, should the deal go ahead.

Currently, HyperCity is 51% owned by the Shoppers Stop department store chain, with the remaining 49% held by parent group K Raheja Corp. The planned acquisition will add around 1.4 million sq.ft of retail space to Future Group's existing 14 million sq.ft (approx). This is spread across various formats through different banners operated by Future Retail and Future Consumer Enterprise.

Recent acquisitions...

Future Group has acquired several different businesses in recent years. In 2014 they acquired South India-based convenience store chain Nilgiri. In 2015, they acquired Easy Day after merger of its retail business with Bharti Retail to create one the largest supermarket chains. Last year, Future Group acquired Heritage Fresh’s retail stores in Hyderabad, Chennai and Bengaluru. They also acquired Sangam Direct last year which further consolidated their position as the country's largest grocer. Future's Group latest announcement indicates that they have no plans to slow down their aggressive expansion, as they continue to increase their coverage across the market.

 

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