National Identity & Value-Based Buying are Becoming Mainstream: Sumit Agarwal, CAIT

Indian retail is at a very exciting, but also critical juncture. The future will be defined not just by technology and speed, but also by ethics, sustainability, governance, and inclusivity especially towards traditional players like Kiranas. Sumit Agarwal, Joint Secretary General, Confederation of All India Traders (CAIT) says the need of the hour is balanced growth that empowers innovation while safeguarding small retailers and ensuring fair play. 

Excerpts: 

What are the top five retail trends shaping the Indian market today?

There is no doubt that Indian retail is undergoing a major transformation, a paradigm shift that has accelerated over the last five to seven years. The entire retail landscape is evolving, and traditional retail models are being challenged and reinvented. Based on current developments, I see five major trends defining this transformation:

Technology & AI Integration
The most significant trend today is the deep integration of technology and artificial intelligence (AI) in retail. From personalized customer experiences to predictive inventory management and AI-driven customer service, retail is becoming smarter. Businesses now use data and machine learning to understand consumer behaviour and deliver tailored offerings in real time.

Omnichannel Retailing
Retail is no longer just offline or online, it is everything. Brands are now ensuring presence across physical stores, e-commerce platforms, social commerce, apps, and even quick commerce. This omnichannel strategy ensures a seamless experience and helps brands retain customer loyalty across touchpoints.

Ethical & Nationalistic Consumer Behaviour
Consumer choices are increasingly influenced by ethical and nationalistic sentiments. For example, recent geopolitical developments have triggered large-scale boycotts of Turkish and Azerbaijani products. Platforms including Myntra have responded by delisting such brands, aligning with consumer sentiment. National identity and value-based buying are becoming mainstream.

Rise of D2C Brands
Direct-to-consumer (D2C) brands are booming, thanks to the explosion in internet penetration, digital payment systems, and social media. These brands, particularly in beauty, personal care, and health, leverage storytelling, influencer marketing, and efficient digital channels to reach consumers directly.

Tier-II & Tier-III City Expansion
A massive shift is happening beyond metros. The real growth today is coming from Tier-II and Tier-III cities, driven by increased connectivity, rising aspirations, and deeper digital adoption in these regions.

Quick Commerce vs. E-Commerce. Can quick commerce replace traditional e-commerce?

Not exactly. Quick commerce has carved out a niche, especially for groceries and FMCG products typically priced under INR 500. It thrives on rapid delivery but operates within a different model compared to traditional e-commerce, which handles higher-ticket items such as electronics, apparel, and furniture. Quick commerce is growing rapidly, but it serves a specific segment. E-commerce remains more sustainable and profitable for higher-value products.

What does the future hold for quick commerce over the next five years?

Quick commerce is in its hyper-growth phase right now. The gross merchandise value (GMV) is currently estimated to be under $5 billion, but with an expected compound annual growth rate (CAGR) of 40–50%, it could reach $20–25 billion within the next five years.

However, sustainability is a key concern. The model is heavily dependent on foreign direct investment (FDI), and unfortunately, most of the funds are being used to cover operational losses rather than building infrastructure or assets. Until these companies develop viable, asset-backed, and profitable models, the long-term sustainability remains in question.

Also, regulatory scrutiny is expected to intensify, especially concerning the misuse of FDI in inventory-led models, which is not permitted under India’s current FDI guidelines for e-commerce. Without course correction, the sector may face legal and structural challenges.

Is quick commerce affecting traditional Kirana stores?

Absolutely. Quick commerce has disrupted nearly 25% of the traditional retail space, especially in urban and semi-urban areas. With around 3 crore Kirana stores across India, this disruption is significant.

The primary concern is the violation of existing FDI regulations. These quick commerce companies operate inventory-led models using foreign capital, which is not legally allowed. This unfair advantage is harming India’s deeply rooted Kirana ecosystem. We at CAIT have been actively voicing this issue and calling for stronger regulatory intervention.

What interventions do you recommend to protect Kirana and ensure fair competition?

There must be strict enforcement of the existing FDI regulations, which allow FDI only in marketplace models and not in inventory-led operations. Quick commerce platforms must operate as neutral facilitators, not sellers.

Moreover, India needs a robust regulatory framework that monitors inventory control, pricing mechanisms, deep discounting, and seller favouritism. The Competition Commission of India (CCI) has already found platforms such as Amazon and Flipkart guilty of breaching competition laws. However, due to the complexity of circumvention, stricter and smarter policy enforcement is necessary.

Thoughts on the D2C (Direct-to-Consumer) segment growth and key factors behind it?

The D2C space is thriving in India. The main drivers include:

1. High internet penetration and mobile usage

2. Social commerce and influencer marketing

3. Digital payment integration (like UPI)

4. Strong e-commerce infrastructure

These brands have successfully tapped into niches such as beauty, wellness, and lifestyle, offering high-quality products without middlemen. With leaner structures, they are more agile and closer to the customer. That said, customer acquisition costs remain a challenge, and maintaining profitability without discount dependency is a key hurdle.

What are some common myths surrounding quick commerce and digital retail?

There are several misconceptions:

Speed trumps quality: Fast delivery is valued, but not at the cost of poor product quality or packaging. A bad experience delivered in 10 minutes is still a bad experience.

Discounts create loyalty: Loyalty comes from consistency, not discounts. Brand trust and emotional connection matter far more.

Selling more means winning: Focused, strategic offerings with optimized logistics often perform better than a scattered product portfolio.

Technology solves everything: Technology is a tool, not the solution. Corporate governance, ethics, and a human-centric approach are critical for long-term success. The recent downfall of tech-first businesses like BlueSmart highlights this point.

On convenience retail, for example, shift from powder to liquid detergents, how do you see changing consumer behaviour?

Consumers today value convenience above all. Time is the new currency. Whether it’s liquid detergents or quick delivery, behaviour is shifting to match urban constraints including traffic, parking, and fast-paced lifestyles.

COVID-19 further accelerated this shift. Pre-COVID, consumers focused on saving. Now, it’s about instant gratification and maximizing life experiences. People are spending more, and buying patterns have fundamentally changed especially among younger demographics.