Thread by @thekaipullai

Unpopular Opinion: No matter what you do in India, you can never uproot the traditional distribution networks in India, especially in FMCG. Any company which overlooks them and favours Udaan, Jiomart etc etc, is shooting themselves in the foot

No single company can cover the entire length and breadth of this country. TN alone has more than 1 Lakh retailers, of different sizes and values. You can homogenize all of them.

Traditional distribution does two very important things
1. Bulk Breaking
2. Giving Credit

And they can do that because of the area they serve. They know the credit worthiness of a retail outlet. They have familial or historical ties with them. Not only do they know how to give credit, but also how to get the money back.

And they can deliver 5 pieces of a product.

No Jiomart or Udaan can do that. At least do it with a profit

Distributors also derisk themselves by taking multiple products, across different categories. What they lose in one product, they gain in another

And they can reach an outlet, within 20 minutes of an order

I don't think an Udaan or Jiomart can do that profitably

Right now they are playing because of the money on tap they enjoy. In some categories, Udaan sells at a price which is lower than what a company bills to others

It's a clear loss

But someday the money will run out

At that time, they will face real competition.

I don't know what will happen, but it's stupid if we write our distributors off. Especially the ones who have survived for more than 50 years.