Nov 10, 2020

Online Grocery Shopping - A big Threat to Kirana Stores

Customer Delight  

India is witnessing a paradigm shift in Grocery Retail from offline (physical)  to online and even to omnichannel. Changes are the need of the hours. A big ocean of retail has a size of USD 1.2 Trillion market, of which 60% is Grocery and Staples.

Online Grocery Market in India was growing in single digits from 2012. During the nascent stage, amid slow penetration of the internet made it less useful. However, since then there was no much development. Till 2017 online E-comm was struggling around 3% of total retail. Projections made in 7% for 2021-22 but Covid has made some unpredictable changes in the preference. 

In view of various factors (given in the above figure) which were taken into consideration, I have something to predict in its future. 

The online Grocery market both in B2B and B2C is going aggressive. Thanks to the startup ecosystem which has given the opportunity to new entrepreneurs to work on new ideas and best use of technology. Startups like UdaanJumbotailMaxwholesaleKirana King, ShopKirana, and now Swiggy and Dunzo are giving shape to the online experience to the retailers. Though they are burning in a big way to get the space, soon it will be part of the business. Here the issue is to cater hyper-local and last-mile connectivity. Consumers do not mind buying online from their nearby store. The only thing is the matter of convenience that will be more focused on B2C players i.e. in nutshell, Customer Delight shall remain the key that will unlock shifting from offline to online.  

B2B retailers are the mid-level accelerator who are connecting the last dot so all are trying to influence them to be part of this ecosystem. Even food delivery startup Swiggy is connecting local kiranawala's for an online grocery experience, however, it is hard to serve in real terms but everyone is focusing on retailers. 

Post-Covid we have seen a sudden change in customer preference where consumer prefers to shop their grocery need from online. Before Deciding to buy consumers can compare pricing, offers & Promotions across online applications. This will help to make their mind to choose a platform for placing an order. 

Buying grocery from online remains a challenge but slowly-2 consumers are adapting to online systems, convenience shall accelerate them to move online. Still, consumers need a great mindset to shift from physical to online. Foreign retailers like Amazon already working on AI which will help to buy patterns of consumers. They want to work even on the daily needs of their consumers, based on buying habits technology shall provide an instant wish list. 

There would be double-digit growth in E-commerce after 2025, the prediction would be 15% from the current level of 3%, almost five times.  Online Grocery shopping would have a big spare of USD 60 bn after 2025  out of the Total online grocery market of USD 125bn.  These are predictions, but the way customer preference is changing,  I am sure the market will touch these figures easily. 

More or less if consumers shift to online shopping, definitely effect would worsen for offline stores in the country. So, instead of protest against online players, we should start working closely on the ground and should associate Kirana retailers with us so that we can be the fast mover and near to consumer for any service which can provide customer delight. 

Quest of Convenience is the main driver, driving Grocery buying online. 

Writer: Balwant Singh Rana

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