BENGALURU: India’s traditional brick and mortar stores not only proved to be crisis-resilient during the pandemic, they have also managed to successfully transition operations to online platforms. Infact, online sales, which constituted 3 per cent of the traditional $1 trillion retail market in India, is now estimated to have doubled to 6 per cent of the sector, according to a Redseer estimate.
“Online retail penetration has increased from 3 per cent at the end of 2019 to 6 per cent in the month of August 2020 and 10 per cent during the festive months. However, (this is likely to) witness a short-term dip with the opening up of brick & mortar stores. We expect online retail penetration to trend around 5-6 per cent in 2021,” Saurav Chachan, engagement manager, RedSeer told this publication.
The Covid-19 pandemic has only blurred the faultlines between the retail and e-commerce industries, and underlined the significance of neighbourhood kirana stores, who are now being wooed by corporate heavyweights.
“Kirana Stores have a 96 per cent share of the Indian food and grocery market. Retailers are realizing the opportunity in e-commerce and adopting online apps to champion this change. It’s a tremendous help to the industry as the existing infrastructure is utilized in fulfillment, bringing the requirement for investment and costs down, while improving speed,” Samarth Agarwal, CEO, Max Wholesale said.
Amazon, in fact, announced its local shops initiative during the middle of the pandemic in August, onboarding thousands of brick and mortar stores. The company’s chief Jeff Bezos had earlier announced a $1 billion investment in India focused on digitising small and medium businesses. Meanwhile, Mukesh Ambani’s e-commerce venture Jio-Mart has already displaced Flipkart and Amazon in hot segments like grocery and expanded into fashion. Jio’s partnership with Whatsapp is expected to be a key aspect of its e-commerce expansion plans.
As for Walmart-owned Flipkart, which onboarded 70,000 small stores this year, it said that there has been a 30 per cent spike in sellers this year, mostly small and medium businesses from the tier-II, III towns. Flipkart’s Senior Vice President, Amitesh Jha said that as one of the oldest retail formats in India, kiranas showcase effective management of the supply chain drivers while maintaining a long-standing relationship with consumers.