General vs. Modern Trade. A Quick Guide!

Time has changed, and with it, the way people traded has also changed. Looking into our past, the only form of commerce was the barter system. Back then, people exchanged goods without carrying out a monetary transaction. However, today's changes have taken us to another world. Things seem convenient, but is that the only difference that stood out? Let's take a closer look at both and find out how time has traveled and changed the way we act:

General trade is mere retail trade, i.e.; small businesses cater to consumers who shop in small quantities daily, while modern commerce involves selling products to large houses. As a result, retail, or let's say, consumers who depend on past steps suffer greatly. This might give you an overlook of general trade vs. modern trade. 

A deeper analysis of general trading will highlight its similarities to traditional selling strategies. Sales tactics focused more on quality and less on sales strategies such as marketing and promotions. However, with the advent of modern commerce, things have gone to the other pole of the axis. Nowadays, people are much more focused on marketing and promotion; therefore, consumers have to bear this amount invested, either in the form of increased price or degraded quality.

Modern trade today is all about presentation; Massive infrastructure with creative/memorable interiors. Viewing this as a form of real estate investing indirectly affects consumers. Introducing different types of taxes (e-commerce, etc.) puts modern commerce behind the general form where one can get things at the curb or a regular point of sale. When general trade existed, the margin was high, but the prices were still low. Thus, the debate about general trade vs modern trade remains in the mind of retailers. 

However, with the introduction of modern forms of commerce, the margins made by the owners can be intense, especially ever since D2C has come into the picture. Nonetheless, the marketing strategy and execution and the ambiance make it expensive too.

This is why massive blocks like Dabur and Godrej are moving toward the general trading form. *Also, if we talk specifically about FMCG businesses, in 2014-15, there was an 11.1% increase in general trade while modern commerce stalled at the 10% mark. When we relate the figures above to those for 2011-12, which show a growth rate of 11.7% for general trade versus 32% for modern marketing, things tell a whole new story. Let’s understand the difference between general and modern trade and which is better. 

The Future

The few years brought about a decline in modern commerce and placed it under general trade.

*According to a recent study, general or traditional commerce will decline by 85% to 65-70% in the upcoming years. Modern trade channels could reach 30% market share. The global FMCG market will grow 6-7% annually through 2025. In any business, online sales are non-negotiable. 

Modern trade in India has evolved in several ways. As modern trade through online platforms and mobile apps has grown, businesses can reach and funnel audiences to the target audience. 

However, modern commerce in India has its challenges. The competition is fierce, and many brands compete for attention. Consequently, companies must be strategic with their approach to modern commerce in India to succeed.

Make the Right Choice for Your B2B Services with Love in Store

General trade is set to decline, giving more room for more prominent players such as hypermarkets, supermarket chains, and mini-markets. Retail operations are more organized and use a more methodical approach to inventory management, merchandising, and logistics management. Love in Store can be your perfect partner for execution and end-to-end ownership of your retail market, sales delivery in sales programs, mobile app for best-in-class reporting, and in-house ai for deployment updates and other insights. 

Conclusion

You have just read so many details about general trading and modern-day trading. This will give you a better understanding of their meanings and differences. The need to know the Indian market well and understand its complexity is critical to implement it in the strategies effectively. Understanding general trade vs modern trade is as necessary as making a business plan before anyone starts to sell.