How growth in grocery shopping in India is transforming farmers, retailers and consumers | The Financial Express

How growth in grocery shopping in India is transforming farmers, retailers and consumers

Today, automation technologies and intelligent systems are enabling robust, seamless supply chains with smooth movement of products and services.

grocery shopping, India
In a socially and culturally diverse country like ours, inclusivity is one of the key prerequisites for business success. (Photo: PTI-Representational)

By Smrithi Ravichandran

2022 has been a transformational year for industries, with businesses exploring new technologies and business models for sustained growth and better customer experiences. E-commerce, which served as a huge support for millions of Indians during the pandemic by enabling safe, anytime purchase of essential commodities, hygiene products, and groceries, continued to grow strongly owing to its strong value propositions of choice, convenience, accessibility, and affordability. Within e-commerce, grocery has emerged as a fast-growing segment over the past year, with great potential for further expansion.

Reasons for the growing popularity of e-grocery services

E-grocery services today cover daily household supplies, staples, fresh fruits and vegetables, spices, snacks and beverages, confectionery, personal care products, and more. Online grocery shopping has become popular owing to a combination of reasons including changing lifestyles; renewed focus on safety and hygiene; and the emergence of a tech-savvy generation of consumers who prefer the convenience of ordering products online. According to a RedSeer Consulting report, more than 50 percent of the grocery retail space in India is addressable by e-grocery platforms. (1) As e-grocery platforms offer a wide selection of products, brands, and stock keeping units (SKUs), there is a high chance that shoppers will find exactly what they need, at an attractive price.

Features to enhance inclusivity, accessibility, affordability, and trust are spurring adoption

In a socially and culturally diverse country like ours, inclusivity is one of the key prerequisites for business success. Leading e-grocery players, in an attempt to make their platforms more accessible and relevant across regions, have launched vernacular-language interfaces for their apps. Digital literacy barriers have been addressed, to a considerable extent, with the introduction of voice assistants and image search. To make shopping more affordable and payments more convenient, e-grocery platforms offer affordable payment constructs like ‘Buy Now Pay Later’ facility – that allow customers to settle the bill as per their convenience using their preferred mode of payment. Like with any new service, e-grocery seeks to win the trust and preference of customers. One of the ways this is being done is through new innovations like open-box deliveries, wherein customers can check the products immediately upon receiving them.

The emergence of Tier-2 and smaller cities as strong growth markets

E-grocery is growing in popularity not just in metro cities but also in Tier-2, Tier-3 and smaller markets, with consumers getting access to quality-checked food and household items from authentic brands at great value. A close examination of the purchasing habits of Indian consumers reveals that the household wallet spend on groceries increases as one goes deeper into the smaller cities, (2) and the demand from non-metro cities is almost as huge as that from all the metro cities put together. To cater to this large and growing demand, leading e-grocery players have been ramping up their operations by establishing fulfillment centers across the country. This is not only helping them serve consumers faster and better, but is also leading to the creation of thousands of direct and indirect jobs and giving a boost to local businesses engaged in logistics, packaging, supply chain and other functions. We are also seeing the establishment of dark stores or dark warehouses in key markets to deliver items such as mobile phones, T-shirts, and groceries in a very quick time. It is an emerging trend that could gain momentum in the years ahead.

The role of technology in enabling seamless, efficient, hassle-free supply chain operations

Today, automation technologies and intelligent systems are enabling robust, seamless supply chains with smooth movement of products and services. Integrating technology into crucial processes such as selecting items for warehouse dispatch, sorting them at mother hubs, organizing local runs, and beat planning enables the fulfillment process to be managed with minimum manual intervention. Automated Storage Retrieval Systems have made processes such as sorting, assembling, and packaging more efficient and accurate. To ensure quick and timely delivery, e-grocery players are optimizing the delivery process with the help of preemptive, data-backed planning; intelligent systems that use geocodes to plot delivery addresses on a map; and planning engines that determine the number of orders in each delivery van, the sequence of deliveries, and the items to be packed together. There are also dashboards available on which all orders can be monitored. (3) Stringent checks are conducted at various stages to ensure the integrity of all products and packaging.

Making a positive difference to farmer incomes and local economies

The growth of e-grocery is benefiting not just consumers but India’s farmers too. Programs are underway by some of the country’s leading e-grocery players, in partnership with state governments, agricultural research institutes, and agricultural boards, to build capacity among thousands of farmers and Farmer Producer Organizations (FPOs), provide them with national market access, and help them adhere to quality standards. These trainings cover important aspects such as raw material supply, repackaging, verification of quality produce, buying strategy, purchase order, payment terms and conditions, and logistics. The power of technology and innovation, and the nationwide reach of e-commerce is having a positive impact on farmer livelihoods. Moreover, it is enabling easy access to staples and pulses for consumers; augmenting the growth of MSMEs and the food processing industry; building a robust and inclusive agri-supply chain; and giving a boost to local economies.

Innovation and sustainability to guide future growth and progress

The future holds immense possibilities and growth avenues for e-grocery players in India. An increasing number of offline retail stores, including kiranas, are exploring digital and omnichannel offerings to serve more customers and in better ways. This could open the door for partnerships between online and offline grocers. Meanwhile, with the focus on sustainability sharpening every day, e-grocery players will look to adopt sustainability measures at every stage from the farm to the customer’s doorstep. These include green infrastructure, energy-and-resource-efficient processes, water and waste management, electric mobility, environment-friendly cold chains, sustainable packaging, green certifications, and more. Even as life rapidly returns to pre-pandemic normalcy, customers will continue to look to online platforms for their grocery needs. Going by recent trends, the demand for healthy, fresh, and nutritional food, beverages and easy-to-cook foods could witness very strong growth. E-grocers must be agile in modifying their offerings to leverage current and emerging trends for continued growth and success.

(The author is vice-president and head of grocery at Flipkart. Views expressed are personal.)

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First published on: 05-01-2023 at 21:17 IST