E-commerce giant Amazon on Wednesday launched its Smart Commerce initiative for local stores to help them transform into ‘digital dukaans’.
Offline store owners of all sizes across India are fast adopting digitisation, whether it is through digital payments or by leveraging technology to manage inventory. Experts believe that technology is key for the next phase of growth for Indian kirana stores.
With Smart Commerce, stores will be able to create their own online storefronts to digitise their offline shops, Amazon said, as its Local Shops on Amazon initiative -- which allows shop owners to sell to customers in their local area through the platform -- completed two years in April.
“We are humbled that in a short period, the programme has already grown to more than 1.5 lakh stores across India. Inspired by this momentum, I’m excited to announce the launch of Smart Commerce,” said Amit Agarwal, SVP, India and Emerging Markets, Amazon at the company’s annual virtual summit Amazon Smbhav.
A recent NASSCOM report had said that the retail market with grow by $700 billion to $1.5 trillion by 2030. And the future is online plus offline sales, experts say.
“Indian kirana today is a hotly contested space because new age digital first companies do believe that this large unorganised mass of over 10 million retailers is in dire need of efficiency led disruption which may or may not be true because we’ve always felt that unorganised is equal to inefficient which is not true in India. However, it’s also true that they haven’t been effective at all times in terms of anticipating consumer needs and orientation,” Kedar Lele, executive director, customer development, HUL said at the summit.
“Two things that have rattled them in the past is revenue maximisation through assortment selling at optimum price. And second is how to make their businesses relevant when consumers shift their shopping preferences from mom-and-pop store to wanting it fulfilled at home. If they can stock right and price right then their last mile strength and consumer centricity can keep them relevant. It will happen by demand capturing and demand fulfilment,” he added.
There are many challenges that are keeping them from doing so.
“As the boundary of commerce and social media starts to blur, first big challenge is the capability of people who work in an offline word and transition into an omni channel world. The second big friction point is adapting to technology and keeping pace with it and learning about rapidly evolving customer expectations,” said Vinod Nambiar, MD, More Retail Limited.
According to the federation of Indian micro small and medium enterprises (MSMEs), commitment required in e-commerce is much more than that of a typical retail business.
“You have to fulfil customer needs and fulfil them in time. Overall, the ecosystem is improving day by day. On the regulatory part, there are issues. For example, if you’re a micro enterprise or woman or rural based enterprise, the moment you want to sell on e-commerce, you have to get a mandatory GST registration and other compliances. It’s not compatible with such a small scale of operations that they have,” Anil Bharadwaj, secretary general, Federation of MSMEs, said.
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