Green Retail

04 May 2020

One of the major pillars of the Indian economy, the retail sector, accounted for 10 percent of the country’s GDP (Gross Domestic Product) and 8 percent of employment, before the Coronavirus outbreak. The entire world is moving towards a ‘greener’ way of work and retail is no different. This sector has emerged as an important part of the green marketing program. Green retail, as people call it, assimilates the availability, display and promotion of green products, sustainability practices and ethical business practices in the retail store.

A report by the Confederation of Indian Industry (CII) and AT Kearney indicates that a large set of Indian consumers spanning different age-groups are willing to pay more for environment-friendly or trusted brands across categories such as cars, footwear, apparels, personal care, fresh food, and packaged foods.

A growing percentage of Indian consumers have an affinity towards brands with higher ethical practices and sustainable practices. Millennials are leading this shift, with Generation X & Generation Z following suit. This has led to a significant shift in consumer behaviour towards sustainable products and sustainable retail.

Refrigeration, ventilation, cooling, lighting, etc. are some of the major contributors to energy consumption in a typical supermarket (or retail store). Retailers must realise the importance of improving efficiency in energy usage and switch to renewable sources such as wind, solar, etc. for the generation of electricity.

Many large-scale Indian retailers and smaller players are using green logistics (or green supply chain) which is a more sustainable option for shipping and logistics. The trend is increasingly picking up in the e-commerce segment where electric delivery rickshaws are used for delivery of goods (or consignments). The trend of green supply chain is also gaining pace in India. Many retailers are cultivating products that are sustainable and directly sourced from organic (or local) farmland or producers.

The Central, as well as, the respective State Governments are also taking initiatives to drive sustainability in India. Single-use plastic is prohibited in many states across India. However, switching to sustainable packaging poses a challenge for retailers and brands operating in a value-conscious market like India as they must find cheaper alternatives to plastic packaging. The good part is that many leading brands and e-commerce companies are using recycled content for packaging.

The four major focus areas that require a push from the Government are – choosing a cohesive policy for ensuring ease of doing business, modernization & adoption of technology, access to capital & subsidies in select areas, and continuous upskilling of employees. There was significant progress in the ease of doing business as the MCA (Ministry of Corporate Affairs) reduced the procedures to start a new business. The Government also relaxed the number of approvals required for opening mom-and-pop & eatery joints.

New packaging regulations were announced by FSSAI (Food Safety and Standards Authority of India). To promote digital transactions, small retailers are incentivised by giving a lower rate of 6 percent of deeming profits on their total turnover.

There has been a focus on Public-Private Partnership (PPP) as the Government partnered with private players for imparting industry-specific skills, thereby making the participants employable in the retail sector. The retail sector is also seeing a large number of women joining the workforce. 

Currently, the impact of the coronavirus pandemic on retailers in the country is severe, but retail sales recovery is expected to gradually pick up once the lockdown is lifted.

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