The coronavirus outbreak has changed the way we work, socialise and consume. Smartphones keep us connected to our colleagues, family, friends, favourite shows and even the local grocer.
The new normal has also put the most traditional of businesses on fast-track to digitisation. The retail supply chain ecosystem, too, is moving in that direction if early trends are anything to go by, industry insiders say.
Indore-based supply chain startup Shopkirana says it has recorded a 30 percent jump in the number of retailers using the platform in the four months of the lockdown.
Recently, the company held a day-long flash sale for 10 brands and did business worth Rs 5 crore compared to Rs 3.5 crore during the same event in the previous quarter.
“We have been doing business of around Rs 3.5 crore for the last few quarters during these flash sale days. This quarter saw a massive jump in demand. We attribute this to growing comfort with online post Covid19,” ShopKirana chief executive officer Tanutejas Saraswat told Moneycontrol over the phone from Indore.
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The company is seeing rapid adoption of online deliveries, with growth coming from small towns and cities.
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Business-to-business supply startups say more retailers are joining their ecosystem as the country unlocks. Though they are still a small part of the overall retail market dominated by offline suppliers and wholesalers, it is a start.
Multiple reasons are driving the move like retailers can order products online and get them delivered at the doorstep. Second, more retailers are getting paid digitally and not a lot of unorganized wholesale dealers accept digital payments.
Third, kiranas are organising their business fast and digitised supply chains work better in these formats like flash deals on certain products tracked through the apps, live tracking of deliveries, minimum disruption from COVID-19 restrictions and others.
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As coronavirus cases continue to rise, states have come up with their own sets of guidelines that affect the movement of people and goods.
For retailers, managing supplies in these uncertain times can be difficult, offering an opening to online players. Many retailers are moving online as traditional supply lines have been disrupted.
The slowdown in the broader fastmoving consumer goods (FMCG) sector doesn’t seem to have effected these online companies. Even if the overall pie is not growing as fast, their share has gone up.
Products like chips, biscuits, noodles, detergents and soaps are seeing strong demand, say industry executives.
“The good thing is that the demand is coming from all types of retailers, be it small or large,” Saraswat said.
Bengaluru-based Jumbotail, another B2B commerce startup, has seen a similar trend, which, it says, is largely due to better service and quality from online suppliers.
“We depend the least on a physical salesforce that has helped us to continue serving our customers even during the days of the pandemic,” said Ashish Jhina, chief operating officer, Jumbotail.
Jhina said while the outbreak battered the HORECA (hotels, restaurant and catering) segment, it pushed up the consumption of many household products.
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Another big shift has been towards digital payments. Jumbotail said increasingly retailers were moving towards wallets and Unified Payments Interface-based payments. If cash payments were at 60 percent against 40 percent digital before the outbreak, they were now down to 55 percent, with 45 percent of them being digital payment modes.
Shopkirana’s Saraswat said that cash, which accounted for 80 percent of all transactions for them, was now down to 60 percent.
“The more consumers pay to merchants digitally, the more merchants pay us digitally for their supplies. In some cases, we are the only supplier who accepts digital payments, hence making us the supplier of choice,” Jhina said.
Urban areas have seen a larger dip in demand compared to small towns and rural areas. The trend that has been captured by the suppliers as well and is primarily due to consumers going back to their native places from cities.
With many job opportunities closing down, consumers have found alternatives in villages. This has caused rural consumption story to hold even when urban consumption is down.
Many consumers who have gone back to towns are looking for brands they used in cities. “We are helping large brands foray deep into the hinterland,” Saraswat said.