From Kiranas to e-carts: The evolution of India’s grocery shopping habits | The Financial Express

From Kiranas to e-carts: The evolution of India’s grocery shopping habits

The potential of the online grocery industry has provided e-grocers with the ability to identify diverse customer needs and create category-based offerings such as fresh fruits and vegetables, meat, dairy products, pantry essentials, etc.

From Kiranas to e-carts: The evolution of India’s grocery shopping habits
Local offline stores have also set out to explore the omni-channel offerings.

-By Srikant Sree Ram

With the evolving customer mindset and an increased focus on safety, quality, and accessibility in current times, there has been a visible shift in the approach towards shopping for even essential items like groceries. This is aided by the high rate of internet penetration in the country and emergence of supply chain models allowing daily essentials to be delivered within a few hours at the customer’s doorstep. The potential of the online grocery industry has provided e-grocers with the ability to identify diverse customer needs and create category-based offerings such as fresh fruits and vegetables, meat, dairy products, pantry essentials, etc. Local offline stores have also set out to explore the omni-channel offerings to make use of their knowledge, understanding of geography and customer needs. They are keen to digitize and serve their customers in a more meaningful manner. Stores of any size can now take advantage of digital innovations, logistics, digital payments, and more to provide a reliable and trustworthy experience to their customers no matter where they are – either through physical stores, directly through their own online storefront, or even marketplaces

Collaboration is key for customer satisfaction 

To set new benchmarks of customer satisfaction and retention it is imperative for the online marketplace to collaborate with local kirana shops. This will enable and fortify their journey to cater to the evolving customer demand. Small traders and kirana shop proprietors should leverage the new online consumer shopping preferences by harnessing the physical marketplace to enhance the overall customer shopping experience. Online grocery market which is at a nascent stage in India currently with only 0.15 per cent (2 million out of 1.35 billion) of Indians making purchases through online channels is expected to expand at a high CAGR of 68.66 per cent and will reach a value of Rs 1,034 billion by 2023. (Source) This growth will be largely driven by user friendly technology, ease of access and reach.

Growth drivers for the sector

Today customers’ lifestyle is driven by apps – an app for almost everything! This trend has introduced Indian customers to a variety of grocery selections that were earlier unimaginable in the neighborhood store. Consumers are always on the lookout for fresh and quality produce. This coupled with commitment of on-time and hassle-free delivery at competitive pricing has led to more demand and reliance on the e-commerce marketplaces. 

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A chance to capitalize

While trends like live commerce, social commerce, and quick commerce are picking up pace, speed is just one part of a positive customer experience. If the brands focus on speed as the key volume driver and do not offer the right selection or value, customer engagement towards the offering might not be sustainable. The search for quality products has thus created the urgent need for a one-stop-shop solution for all daily needs, coupled with value offers, reliable and safe delivery options. 

In recent years, smart cities with state-of-the-art infrastructure have enabled the growth of e-commerce and online transactions. For example, e-commerce provides benefits for low-cost business overheads and operations, a structured system of transportation of goods and services, and access to larger markets through virtual retail stores. Moreover, e-commerce-induced virtuality has gained acceptance among consumers which in turn has further increased the demand for remote storage facilities and fulfillment centers. On the back of such developments, the online grocery retail market is witnessing a rapid growth rate in the Indian metropolitans and other emerging smart cities. While semi-urban areas and emerging cities are expected to drive the next wave of value growth owing to the rapid rate of urbanization, rural demand is likely to continue to drive volume growth. 

Today 85 per cent of new customers are from tier-II and -III cities and towns bringing the reach of e-commerce to ~99 per cent pin codes across India. Brands across are capitalizing the power of digitization to make online shopping more convenient than ever before. 

Innovation for India

Customers in India often show a tendency to switch between different online grocers, with an inclination towards those who provide higher discounts, deliver fresh quality produce and charge less for delivery. This is because customers are on their quest for variety, quality, and value and they have a host of options to choose from.  As a result, online grocery market players face difficulty in developing a loyal customer base.

The government and private sector have been making a focused effort to improve efficiency, reach and relevance of small shop owners. But owners of kirana stores appear to be hesitant to adopt digital solutions, hindering their integration into the organized retail sector. Therefore, there is a need to build a TAM (Technology Acceptance Model) that focuses more on customer backward intrinsic motivations and less on cost-benefit calculations. This can be achieved through continuously educating kirana store owners and operators and investing in new ways to build trust with small traders, while also encouraging them to make the best use of technology.

Shifting dynamics and the road ahead 

As we move back to the old normal and hectic lifestyles, customers will continue to favor and lean heavily on e-commerce and e-grocery to fulfil their daily needs. With easy access to the internet, increased disposable incomes and need for comfort and safety, customers will continue to pay a premium for superior quality product assortments. Demand for healthy, fresh, and nutritional food, beverages and easy to cook foods will see exponential growth. E-grocers must prepare themselves and gear up to bring services that will cater to top-up demand, unplanned purchases, and bite-sized offerings. 

Convenience (for example, high quality product selection, saved preferences and order history), hassle free shopping, wide selection, and easy access to information (such as stockouts, feature updates, tracking and changes to orders) will remain the top requirement of the ever-evolving customers’ online shopping journey. Increased online shopping for groceries is here to stay with most consumers using e-commerce as a way to stock up their daily essentials, in addition to visiting a physical store. Thus, for online grocery growth in the foreseeable future, adapting to emerging technology, analyzing customer trends and partnering with local retailers to win customer trust will certainly drive ‘pragati har disha mein’. 

(Srikant Sree Ram is the Director of Amazon Fresh)

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