From Storefronts to Supply Chain: Story of Wholesale & Retail Trade in India

It was a sweltering summer afternoon in Kanpur when Arvind Bhai unlocked the shutters of his modest Kirana store. The scent of fresh grain and masalas perfumed the air as he began stacking new inventory. For nearly 3 decades, his family had run this shop, buying goods in bulk from local distributors and serving hundreds of families in the neighborhood. 

For decades, the Indian kirana system has remained unchanged, with key players, including wholesalers, distributors, stockists, and retailers, ensuring that products travel seamlessly from the brand to the end consumer. Let’s explore the mighty FMCG distribution supply chain system in a little more detail:

Understanding the Basics: What Is Wholesale and Retail Trade in FMCG in India?

Wholesale trade refers to the sale of goods in large quantities, typically to retailers, other merchants, or institutional users. These wholesalers act as intermediaries between producers or manufacturers and retailers. They usually don’t deal directly with end consumers.

Retail trade, on the other hand, involves selling goods directly to the end consumers in small quantities. Retailers act as the final link in the supply chain, playing a crucial role in shaping consumption behavior. 

In India, both categories play a pivotal role in the economy by contributing to employment generation and ensuring last-mile access to goods and services. Together, they form the backbone of India’s consumption economy — from billion-dollar mall chains in metros to paan shops in small towns.

The Structure of India’s Trade Ecosystem

India’s trade ecosystem is vast, informal, and layered:

This is where goods originate. It could be a large FMCG conglomerate or even a local producer of spices, clothing, or utensils.

2. Super-stockists and C&F Agents (Carrying and Forwarding)

These businesses purchase from manufacturers and producers. They store and manage inventory at a regional level, distributing it further to wholesalers and large retailers.

3. Wholesalers

Wholesalers buy products in bulk and sell them to a network of retailers. Wholesalers can be general (dealing in multiple product categories) or specialized (focused on one category, like groceries or hardware).

4. Distributors

Distributors are similar to wholesalers in the sense that they procure products in bulk. The main difference is that distributors have a formal partnership with the manufacturers or producers, but wholesalers do not. Distributors are usually assigned a specific region or territory by the brand. They cater to local retail outlets, take orders, ensure delivery, and even provide credit in many cases.

5. Retailers

From supermarkets and department stores to corner Kirana shops and mobile carts, retailers form the most visible part of the ecosystem. Over 12 million Kirana stores operate in India, accounting for over 85% of the total retail market.

Wholesale and Retail Trade in FMCG

Fast-Moving Consumer Goods (FMCG) is the lifeblood of India’s retail trade. Products like soaps, snacks, shampoos, and biscuits are stocked and sold in massive quantities daily.

Here’s how it plays out:

• A biscuit company like Parle produces at scale.
  
  
• It sells to super-stockists in different states.
  
  
• These stockists push the goods to distributors who cover specific districts or neighborhoods.
  
  
• Distributors supply to kirana stores, chemists, small supermarkets etc.
  
  
• Finally, the end customers pick up the Parle products at their respective neighborhood stores.
  
  

This chain ensures product availability in even the remotest villages of India, thanks to deep penetration and a vast retail network. However, this model is now being disrupted.

Read: Offline Retail Trends in India 2025: The Big Shifts Shaping the Future

The Challenges of Traditional Trade

While the traditional wholesale and retail trade network has served India well, it has its own set of challenges:

1. Fragmentation: Most retailers and wholesalers operate informally, with limited access to credit, tech, or data.
   
   
2. Lack of Digitization: Manual billing, stock-keeping, and order-taking slow down operations and increase inefficiencies.
   
   
3. Inventory Risk: Retailers often run into out-of-stock or overstock situations due to poor demand forecasting.
   
   
4. Inefficient Supply Chains: High logistics costs, delays, and lack of real-time visibility plague the system.
   
   
5. Dependency on Credit: Many wholesalers and retailers operate on long credit cycles, leading to cash flow issues.
   
   

Digital Disruption: A New Age for Retail Trade

The last five years have seen a surge in startups and tech platforms trying to solve these very problems.

B2B E-commerce Platforms

Companies like Udaan, Jumbotail, ElasticRun, and ShopKirana are bridging the gap between wholesalers, brands, and retailers through apps and logistics.

• Retailers can order inventory via apps.
  
  
• Distributors get visibility into demand patterns.
  
  
• Brands can push promotions, track performance, and reduce leakages.
  
  

FMCG Digitization Tools

Platforms like Badho are helping FMCG brands manage their channel marketing and distribution network digitally,  from onboarding distributors to tracking schemes, monitoring sales reps, and collecting real-time retailer feedback.

POS & Inventory Management

Tools like BharatPe, Dukaan, Khatabook, and Vyapar are bringing digital billing, payment, and credit systems to small retailers.

The Rise of Direct-to-Retail (D2R) and Direct-to-Consumer (D2C) Models

FMCG brands are experimenting with new models to improve margins and control customer experience.

• D2R (Direct-to-Retail): Brands bypass traditional distributors and supply directly to high-volume retailers.
  
  
• D2C (Direct-to-Consumer): Brands like Mamaearth, WOW Skin Science, and Slurrp Farm sell directly through their websites and marketplaces like Amazon or Flipkart.
  
  

These models reduce dependency on wholesalers and create better customer data, faster feedback loops, and higher profitability.

Modern Retail vs. Kirana: A Coexistence Model

There’s been a lot of debate on whether modern retail and e-commerce will wipe out Kirana stores. The truth is, they are co-evolving. 

Modern Retail Advantages:

• Better product display and in-store experience
  
  
• Loyalty programs and digital payments
  
  
• Better access to financing
  
  

Kirana Strengths:

• Deep trust and community relationships
  
  
• Hyper-local delivery and credit to customers
  
  
• Low operational costs
  
  

Many platforms are now empowering Kiranas to function like modern stores — with real-time ordering, digital payments, loyalty apps, and hyperlocal delivery integrations. The goal is not to replace them, but to modernize them.

The Future of Wholesale and Retail in India

The retail trade in India is expected to reach USD 1.8 trillion by 2030, with organized retail capturing a growing share. Here’s what we can expect:

1. Unified Commerce

Consumers will shop across touchpoints - offline, online, social media, and mobile apps — seamlessly. Brands will have to create unified experiences.

2. Smart Supply Chains

With AI, data analytics, and IoT, brands and wholesalers will track inventory, demand, and sales in real-time.

3. Green and Ethical Retail

As sustainability becomes a priority, sourcing, packaging, and distribution will undergo ethical audits and eco-friendly shifts.

4. Embedded Financial Services

Retailers and wholesalers will get easier access to loans, credit insurance, and working capital through fintech partnerships.

5. Policy Reforms

The government is actively working on modernizing retail, with initiatives like ONDC (Open Network for Digital Commerce) and simplified GST rules for small traders.

The Next Chapter in India’s Trade Story

Back in Kanpur, Arvind Bhai has just completed his stock entry on a new app. He’s still figuring out how to use it, but his teenage daughter helps him every evening. His distributor now sends e-invoices. A fintech startup just offered him a working capital loan. And a new snack brand found him via a digital platform, offering better margins than his previous supplier.

This is how transformation begins, not with big headlines, but with small shifts at the grassroots.

Wholesale and retail trade in India isn’t just about transactions; it’s about people, trust, networks, and adaptability. And in this age of digital disruption, the sector has one foot in the future while staying firmly rooted in tradition.

Key Takeaways:

• Wholesale = bulk buying & selling to retailers; Retail = direct-to-consumer selling.
  
  
• FMCG drives most trade activity; Kiranas are still dominant but modernizing.
  
  
• B2B platforms, POS tools, and D2C models are reshaping the trade landscape.
  
  
• India’s retail market will grow massively, driven by tech, policy, and urbanization.
  
  
• Kiranas and modern retail will coexist, aided by digitization and new-age tools.