- Digital transformation of grocery stores is going to affect Unilever and Procter Gamble and even SBI
- Grocery shoppers are able to improve business practices through smartphones with a little training.
Many changes are also taking place in this space between the battle of Mukesh Ambani and Jeff Bezos to reign over the Indian retail sector. The digital transformation of grocery stores catering to the needs of 1.3 billion consumers is going to affect everyone from both giants to Unilever and Procter Gamble and the country’s largest bank SBI.
Future group will be helpful in dominating consumer economy
Currently, Ambani and Bezos are at loggerheads with the Future Group. Future took the money from Bezos, but as the pressure of Kovid-19 increased, he sold his business to Ambani. If the group is hit by Ambani, their dominance over the Indian consumer economy will be unbreakable.
FMCG companies have a different story going on in the war of giants
FMCG companies are running a different story in the battle between these giants. It has been difficult for them to reach 6,60,000 villages and small shops in 800 cities. For more than 100 years, the current Unilever has direct access to only 15% of such shops. She enlist the help of a wholesaler to reach 80% of the shops. The figure is from Sanford C. Bernstein & Company, an investment research and asset management company.
Daddan delivering goods to 1.7 million retail stores in 900 cities
In this way, most of the business of brands is run on the relationship of wholesaler and retailer, which is expensive. Digitization of the functioning of the retailers will provide huge opportunities for FMCG companies to spread the business. In this case, the five-year-old flight has moved forward a lot. Udaan, a business in the B2B business space, is delivering goods from warehouses across the country to 1.7 million retail stores in 900 cities.
30 lakh buyers and sellers are registered on the flight
The flight pays the supplier on pickup while the retailer gets credit from the wholesaler who gives the wholesaler at a higher rate. All is done on the smartphone, which helps small shopkeepers to keep track of their accounts. Banks and financiers get trusted customers of working capital loans and the brand gets better access. On the flight, 30 lakh buyers and sellers are registered as manufacturers, farmers, pharmacists, hotels, restaurants, grocery stores.
Flight is removing the problem of trust on internet commerce
Vaibhav Gupta, one of the three co-founders of this unicorn, says, “We have overcome the problem of trust on the Internet.” The second co-founder Sujit Kumar attributes the success of the company to the GST implemented in 2017. There are different rates and Compliance is expensive but due to uniformity across the country, now they are freed from the kind of local levy.
Mobile Internet is promoting revolution in the retail space
They all have mobile internet at their center. Ambani made expensive mobiles very cheap by bringing 4G in 2016. Grocery shoppers are able to improve business practices through smartphones with a little training. Kumar and Gupta were included in the team that made Flipkart the Indian version of Amazon. The third partner Amod Malaviya has been the Chief Technology Officer of Flipkart. But they did not copy any global company to make the flight, because there is no such company.
Consumers who shop online live in cheap circles
Although consumers like online shopping may be like foreigners, but most of them live in cheap circles and ask for very few items. According to Gupta, “Kitchens and fridges are small and on an average only 200 rupees are left in the pocket of shoe buyers here.” Mobile commerce arrived in India before it was a matter of passing the desktop, but even big shopping does not start with online search.
Flight eliminating the interruption in transactions to retailers
Kumar, who came to IIT Delhi from Bhabua in Bihar, is a supply chain specialist and he is not trying to bring about a fundamental change in people’s thinking. He is removing the blockage in the rupee transaction, which is important for a retailer who is trading at a 10% to 12% margin. In Western countries it is double.
B2C Retail Business Politically Sensitive
The B2C retail business in India is politically sensitive and full of regulatory challenges. The government is tightening its grip on foreign ecommerce platforms amid indigenous slogans. In such a situation, Ambani has an edge in the Indian market but Bezos is not ready to back down. In order to support the Make in India campaign, Amazon has announced to start production of Fire TV Stick in India.
Grocery shop owners are not allowed in the battle of two giants
Now the question arises that in the battle of two heavyweights, will the grocery stores be harmed? It will not be. According to Bernstein, by the end of the decade, the size of the retail market could triple to double the time of data revolutions to $ 20 trillion. Small shops will have 65% share in it and their base business will go digital. Startups like Udaan will make their backend modern while Ambani and Bezos will be able to gain a bigger market through their store front.
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