Third episode briefing you about 5 years of GST, why large retailers are stocking up, Indian consumer awareness, direct selling industry and more.
Hello and welcome to This Week in Indian Retail - a podcast dedicated to the major events, news and stories that impacted the Indian retail industry in the last week.
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This is July 3rd 2022 and I’m your host Prateek Malik from New Delhi.
Let’s get started!
Summary of Week 26 of 2022 :
The industry reviewed 5 years of GST launch GST system has been adopted by each retailer and has seen its fair share of policy changes, announcements, technological dependencies, etc. Parallel to the government’s oversight, retailers in India also made sufficient efforts to remain compliant to each norm. This includes changing accounting practices and utilising new software solutions. Numerous indirect taxes, non-creditable taxes were simplified via GST for all affected businesses. Now, the industry review if GST has been fruitful enough or not. Certain wishes are echoing in the market, including - inclusion of petroleum products in GST, appointment of an Appellate Tribunal, simplification of ITC, restructuring of rates and many more. Experts mentioned to the media that while GST helped improve India’s Ease of Doing Business rankings and brought a large portion of commercial taxation above the surface; there’s still a long way to go towards achieving the seamless workflows.
Large retailers maintaining higher inventory levels As per the reports provided by some of the large retail groups to their investors, there is a constant stocking of higher inventory pool to prepare for the anticipated demand. Market biggies like Trent, Go Fashion, Page Industries, V-Mart, Relaxo, Aditya Birla Fashion and Retail, Vedant Fashions, TCNS have increased their inventory caps by at least 30% with some doubling it as well. While a segment of economists claim the world economy is slowing down; some of these groups think otherwise. There are multiple reasons cited for this including offsetting uncertainty in the raw material inflation, higher seasonal demands and retail outlet expansion plans. How well it will fare for the rest of the market, only time can tell us.
Indian consumers are now aware about the product reviews and ratings game on e-commerce Delhi based social media platform LocalCircles recently conducted a market survey with 38,000 consumers spread across 284 districts in India to gauge the consumer understanding of online reviews and ratings. Let’s talk about a few key findings. a. 65% found the ratings to be positively biased meaning that sellers are potentially influencing ratings to attract new buyers and e-comm platforms are not taking action b. Merely 17% found the ratings to be accurate against the actual products received c. 90% believed that once a product is rated low and gathers negative reviews, it should not be allowed to be re-listed on the platform d. 87% believed that only verified buyers must be allowed to post a review on the e-comm platforms E. 41% claimed that their negative reviews were not published sometimes This report has been an eye-opener for both the sellers and platforms who used to leverage the short-sightedness of the digital consumer along with the instantaneous nature of the engagement to harness quick sales. Hopefully it will help the ecosystem to be matured towards better consumer transparency.
Indian Direct Selling industry now the 12th largest globally According to the World Federation of Direct Selling Associations - The Indian direct selling industry crossed $3.25 billion in retail sales in 2021 and maintained its 12th place in global rankings among direct sellers worldwide. According to IDSA, India can become the 5th largest direct selling market globally in the next decade. Key players like Amway, Oriflame, Tupperware, Modicare, Herbalife are other have been the major contributors. In addition to this, there has been a consistent surge in the emergence of new, regional direct selling players. The government also tried to regulate the industry by the release of Consumer Protect (Direct Selling) Rule 2021 in December last year. It basically imposes a ban on any form of ponzi schemes, pyramid schemes and money circulation schemes. Hoping for a fair market evolution in this industry over the coming years.
That’s a quick wrap for this week.
If you’re interested in being on our podcast to share your retail experience or reflect on the new developments, you can tweet or DM me over Twitter at @geekprateek .
Keep listening to us and do share with your peers in the retail ecosystem.
See you in the next one.
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