At Flipkart Connect 2021, a panel discussion took place about the evolution of the online grocery delivery segment in India.
While many people are accustomed to shopping for electronics, clothes, and even home décor online, shopping for groceries online is still a fairly new phenomenon. At the third edition of Flipkart Connect (a day-long virtual seminar), a panel came together to discuss the expectations that an online shopper has when it comes to buying groceries. The panel also discussed how both the consumer and the segment have evolved.
The discussion was moderated by Priyanka Bhargava – head research and insights at Flipkart. The panel included Preeti Reddy, chairwoman, South Asia, insights division – Kantar; Meena Kaushik, executive chairperson, Quantum Consumer Solutions; and Smrithi Ravichandran – vice president, head of grocery at Flipkart.
Bhargava began the discussion by mentioning that the e-grocery segment in India is expected to grow to the size of $18-20 billion by 2024. With the onset of COVID, in the last year, a lot of fence sitters and first-time consumers were forced to try out the services of e-grocers for the first time. She also talked about other growth drivers, like affluence and increased average income.
Kantar’s Reddy mentioned that most consumers these days are used to online shopping. So, for this set of people, touch and feel of the product is not as important.
“Though, on a more fundamental level, online grocery delivery would not be possible without the precedent set by kirana stores. These companies are trying to replace the customer’s effort of wearing a mask and going to the store in times of the COVID pandemic.”
Quantum Consumer Solutions’ Kaushik said, “With online grocery shopping, the convenience of the experience of online shopping has transferred to the grocery shopping experience. These apps create a visual marketplace for their consumers in order to make the purchase experience feel more complete.”
Kaushik added that with the onset of the COVID pandemic, people are very concerned about where their food is sourced from, because of how the disease spreads by touch.
“If companies were to introduce more transparency, in terms of where the items were sourced from, it would put a consumer’s mind at ease. They could even use it as a talking point, to market how fresh their produce is and how it is sourced from a state where the fruit or vegetable is natively grown.”
Flipkart’s Ravichandran joined the discussion by explaining that groceries are of two main types – fresh groceries (such as fruits, vegetables, etc.) and dry groceries (such as rice, atta, sugar, etc.). She told the panel that it has been easy to get the consumers to order dry groceries online, but it has been more challenging to earn customers’ trust, when it comes to shopping for fresh groceries.
Ravichandran said that 50 per cent of the grocery shopping is to stock up on daily supplies that keep the household running. But as far as the online grocery delivery segment goes, the biggest shift has been in terms of the speed of delivery that the players offer.
Reddy chimed in, pointing out that setting such precedents mean that e-grocers have brought about a new definition of convenience altogether. “They have also brought about flexibility and convenience, in terms of the payment gateway. The experience has become exploratory in nature and the shoppers get a visual experience when they’re on the app.”
Kaushik mentioned that when people stock up on groceries at home, it’s for three main reasons – to restock used up ingredients, purchase indulgence items (such as chocolates), and also products that pertain to festivals and rituals. She added that this is a function of inventory management – which kirana stores are good at.
“Kirana stores in neighbourhoods are familiar with customer habits and the festivals they celebrate. They stock up on items accordingly.”
Kaushik also said that e-grocers need to figure out how to create intangible emotional value on these same lines. “You also have to keep in mind that the customer is giving up control of the quality of products they may have got, if they had the freedom to choose. That’s why the customer needs reassurance that the products delivered to them will be of good quality.”
Ravichandran agreed that relegation of control is the most important step for a customer, when it comes to shopping for groceries online. “This is when technology plays a role in assuring the customers. If I have technology at hand, I can make a scientific claim, promising my customers carbide-free mangoes. It’s difficult to create reassurances without using technology.”
She explained that the biggest challenge for an e-grocery delivery firm is a phenomenon called the split basket behaviour – in which a customer uses various delivery services to buy different types of groceries (for example, meat and seafood from a brand like Licious, groceries from BigBasket, and so on).
“When customers do this, it is not good unit economics overall. We have to figure out a way to fulfil all of their needs in one single basket shopping experience.”
(Photo by Maddi Bazzocco on Unsplash)