Rapid globalization and urbanization have been the most prominent growth drivers of retail for decades now. In 2019, world trade to GDP ratio crossed 60 percent, and the global urban population crossed 4 billion with the retail industry in emerging economies such as India benefitting the most from this urbanization boom.
However, COVID-19 has led to a global slowdown in trade and mass reverse migration from urban centers, leaving the industry in a severe fix. Retailers, especially those in non-essential categories are facing massive supply chain roadblocks. This coupled with a push from the Indian government to support local businesses to revive the economy is driving the ‘act global think local’ trend, says GlobalData, a leading data and analytics company.
According to GlobalData, the pandemic has changed the purchasing preferences of consumers. According to GlobalData’s COVID-19-week 6 (April 28-May 03) survey with a sample size of 5,500 respondents of 11 countries, almost 83 percent of Indians and 82 percent of Australians find local products to be trustworthy, indicating a higher acceptance for locally procured and produced products.
Hrishabh Kashyap, Retail Analyst at GlobalData, says: “Now retailers are under immense pressure from the evolving consumer preferences, disrupted supply chain and changing attitudes towards local products. These factors have forced retailers like Amazon and Flipkart to include more local stores and promote them on their platform. These retailers have been vocal about supporting local industries and sellers through their brand visibility and communication to customers. Post COVID-19, we are likely to witness more retailers going local in their procurement and promotions.”