When my mother saw potatoes and tomatoes were available for one rupee a kilo on an online grocery platform she instantly placed an order. Of course, there were asterisk marks and caveats. But she didn’t mind that.
That’s the power of online shopping – to lure the consumer with jaw-dropping prices and mega discounts. After shopping for thirty odd years at the local ‘subzi’ market, this was the first time that my mother shopped online. But will she only shop online going forward? That remains to be seen.
Ecommerce giants such as Amazon, Flipkart and Big Basket are spending millions of dollars trying to tap the online grocery opportunity. A large amount of money is being spent on customer acquisition, promotions, branding and expansion. It looks like the online grocery battle is heating up.
Grocery retail in India is estimated to be over 60 percent of the country’s total retail market. Analysts estimate suggest that grocery retail in India has the potential to double to $700 billion by 2022. With customers spending about 40 to 50 percent of their monthly income on grocery, it looks like a space that both offline and online retailers are betting big.
My mother, like a lot of new online shoppers, was happy with her big savings on potatoes and tomatoes. But she had a few observations when the vegetables actually reached home. “I don’t mind paying a bit more for the vegetables if they are fresh and of good quality,” she told the customer executive from the portal while placing a ‘return request’ for a few vegetables that may have had dried up during transportation.
The local ‘subzi’ market has always promised her quality but at a tad higher price. That was her experience. But is India willing to compromise on the quality for good bargains? How soon will online portals strengthen their infrastructure and delivery muscles to offer the best of both?
Even as online players are working towards getting the best mix of price and quality, offline retailers are busy taking the shopping experience a notch higher. Supermarket chains such as Reliance Fresh, Big Bazaar, Easyday, More and Spencer’s are introducing loyalty cards, special ‘Wednesday’ offers or buy one get one free offers. They are also offering free home delivery on orders larger than a certain ticket-size. All these strategies, to keep getting the consumer back to the store. The underlying belief being that “India likes to go shopping!”
That’s the reason that grocery and premium food stores such as Godrej Nature’s Basket and Foodhall have opened sprawling stores in metros to cater to this growing segment of “conscious consumers.” Take, for instance, Future Group which recently launched its largest specialty food store, Foodhall, in Mumbai. This is the company’s second store in the city and is spread over 25,000 square feet.
Along with several curated food items and ingredients from all across the world, the store also offers unique experiences to consumers. The store has an in-house bakery, hydroponics wall, farmer’s market, tea salon and even a coffee roaster. Spread over four levels, it has an Italian restaurant and also a cookery studio where the in-house chefs hold workshops for leisurely shoppers.
Understanding the Indian consumer is complex – price, quality and experience are just some dynamics that the Indian retail industry is grappling with. There is no one strategy that fits all size, say analysts.
While modern retail chains are still struggling to compete with India’s very own corner shops – the kirana store. Online grocery platforms are working out a unique price and convenience driven model of their own. And, there is no clear winner just yet.
First Published: IST