Ramesh Goel runs a 1000 sq. ft. grocery store in Bengali Market in New Delhi. He was one of the many ‘Kirana’ storeowners who had once protested against the modern retail format that he believed would wash them out of business.
As if the invasion of malls and modern retail stores weren’t enough, with e-commerce disrupting the retail market and offering a far more convenient and cost-effective alternative, his customers gradually started dwindling, further adding to his woes. As a result, small players like Ramesh in neighborhood markets suffered huge losses and began resenting online retailers.
However, things have taken a surprising U-turn ever since. With several hyperlocal players having entered the ecommerce space, neighborhood commerce or n-Commerce, has again got a huge boost.
Now Ramesh is constantly getting calls from n-commerce players in the retail industry seeking a partnership with his store. He doesn’t mind expanding his business and is mulling tying up with one of them as yet again he can see his small store gaining a steady stream of customers.
There are many neighborhood stores – right from groceries, mobile phones, stationary, dry cleaners and electricians, chemists etc. that have started to tap the new market offered on their platter by the new brigade of n-commerce companies, creating a win-win situation for these local stores, customers and themselves in the process.
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The Indian retail industry has got a huge boost with ecommerce ruling the roost. From $550Bn in 2015, the market size is expected to quadruple and touch the $2.1 Tn mark in 2025! Of this, the e-retail market alone is projected to grow from 5Bn in 2015 to 130Bn in 2025. (according to The Hindu). So undoubtedly, riding the ecommerce wave will be a smart move for any retailer, big or small.
There are a variety of startups exploring the n-commerce opportunity, and most of them backed by top investors are experimenting with different business and delivery models, aiming to disrupt the supply-chain and logistics piece currently used by the ecommerce players.
Then there are companies like StoreKing, iPay and e-Dabba that are providing the ecommerce experience to people in Tier-3 cities or small towns where internet connections are slow and few have smartphones. For instance, StoreKing puts up kiosks in local stores and gives customers access to products otherwise not available in that city. The tech-savvy storekeeper assists customers in selecting the products in their local language and after the payment is received, StoreKing dispatches the product to the retailer within a span of 2-3 days. The shopkeeper earns a commission in return for giving access to its loyal customer base to StoreKing.
This new frenzy has not only led to a sudden spurt in demand at neighborhood stores, but is also offering a host of other benefits to them. Apart from rising business volumes and revenues, n-commerce is equipping them with better inventory tracking and management tools so they can fulfill their orders effectively. Their stocks are moving fast and the data analytics provided by these n-commerce companies is helping them to analyze the trends – customer-wise, product-wise, and season-wise – so as to service their customers better. The most significant benefit, albeit an intangible one, is that they are no longer insecure about losing their business to modern trade.
Customers too stand a lot to gain with n-commerce since the seemingly insignificant and time-consuming menial chores can now be accomplished with utmost convenience and at the best price without having to waste precious time (and fuel!).
Apart from n-commerce companies, biggies in the retail Industry are also waking up to leverage the clientele, network and ‘personal touch’ of corner stores. Amazon has listed a few ‘kirana’ stores as sellers on its portal while Reliance Retail is exploring partnerships with local neighborhood shops to reach consumers better. At the same time, Big Bazaar wants to lure them with the franchise card to sell home and fashion products. Snapdeal CEO and founder Kunal Bahl also recently said that the company would soon tie-up with retailers.
Everyone is aware that scaling up an ecommerce business requires one to have deep pockets. Partnering with neighborhood markets can help n-commerce companies scale up faster and with comparatively less investment. The discounts-and-offers trick that ecommerce companies play to get customers will fade away very soon and going forward, convenience and availability of niche products are likely to be the main reasons that’ll drive online shopping. This is where these neighborhood stores can help the online players reach customers faster and cheaper. Above all, the neighborhood stores are now more open to expanding their business with the help of n-commerce companies.
While we are yet to see how this whole industry will shape up, it’s definitely interesting to watch the neighborhood market become a part of the online revolution in India.