India's oldest metro system may soon become a trend-setter by introducing the country's first virtual grocery stores. Bruised by widening losses, the Kolkata Metro Rail Corporation (KMRC) reportedly commissioned the Indian Institute of Management, Calcutta (IIM-C) to restructure its revenue model and look at ways to increase non-fare revenue.
Among the solutions put forward is a virtual grocery store that will allow commuters to scan and order products while waiting for their trains - to be home delivered later - without having to visit a supermarket.
According to Mint, a team of three IIM-C students, Alan Shaji Idicula, Urjaswit Lal and Tushar Kumar, came up with the unique idea of installing wall-length billboards on the walls of the metro stations designed to look like a series of supermarket shelves and tying up with e-commerce majors like Flipkart or Amazon to start the virtual store.
"The digital billboards will display product images along with the QR code. Passengers can scan the code to order daily-use products like groceries and FMCG items," Idicula told the daily. "The e-commerce company would have to tie up with local stores to deliver the products in a few hours." So the concept basically marries the two distinct models of traditional brick and mortar shops and e-commerce.
Of course, QR Code Virtual Stores have been making waves abroad for a while now. For instance, back in 2011, UK's retail giant Tesco opened its first virtual store in a Seoul subway station, which drove over 900,000 Homeplus app downloads in less than one year. The company saw its online sales zoom up 130% since the launch, and a year later, Tesco Homeplus announced it was extending the concept to 20 new locations across South Korea. In the past few years, virtual stores have popped up across the world, including the US, Europe and Australia.
The daily added that Idicula's team was picked winner by KMRC among 20-odd teams of students that were studying different metro stations to find additional sources of revenue. The revenue model proposed by the trio also suggests leasing out unutilised space for commercial activities. The team calculated that around 68,478 sq ft of space is lying unutilised across Kolkata's 20 metro stations, which could be tapped to generate additional revenue of Rs 20 crore. In addition, KMRC could earn revenue through train wrap ads, hoardings and digital kiosks, and from paid Wi-Fi services inside Metro trains.
That is a windfall for a transportation system that spends around Rs 2.68 for every rupee earned. "We are trying to implement it. The idea is to increase our non-fare revenue so that there is no burden on passengers. We are trying to utilise our space in the best possible manner," KMRC spokesperson Indrani Banerjee told the daily, without divulging whether they have initiated talks with any e-commerce company.
Currently, 90% of KMRC's revenue is fare-based, which were last raised in 2013 after a gap of 12 years.