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.
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.
These businesses purchase from manufacturers and producers. They store and manage inventory at a regional level, distributing it further to wholesalers and large retailers.
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).
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.
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.
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:
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
While the traditional wholesale and retail trade network has served India well, it has its own set of challenges:
The last five years have seen a surge in startups and tech platforms trying to solve these very problems.
Companies like Udaan, Jumbotail, ElasticRun, and ShopKirana are bridging the gap between wholesalers, brands, and retailers through apps and logistics.
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.
Tools like BharatPe, Dukaan, Khatabook, and Vyapar are bringing digital billing, payment, and credit systems to small retailers.
FMCG brands are experimenting with new models to improve margins and control customer experience.
These models reduce dependency on wholesalers and create better customer data, faster feedback loops, and higher profitability.
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.
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 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:
Consumers will shop across touchpoints - offline, online, social media, and mobile apps — seamlessly. Brands will have to create unified experiences.
With AI, data analytics, and IoT, brands and wholesalers will track inventory, demand, and sales in real-time.
As sustainability becomes a priority, sourcing, packaging, and distribution will undergo ethical audits and eco-friendly shifts.
Retailers and wholesalers will get easier access to loans, credit insurance, and working capital through fintech partnerships.
The government is actively working on modernizing retail, with initiatives like ONDC (Open Network for Digital Commerce) and simplified GST rules for small traders.
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: