Buying electronics goods including camera, laptops, computer peripherals, apparels, flowers and gifts are quite a common phenomenon for net savvy consumers. However, now get ready to receive your grocery, vegetables and FMCG products like shampoo, soap and bakery at your doorstep. After touching apparels and personnel items now retailers are gearing up to facilitate grocery and other FMCG products through power of online. As of now there are very few retailers providing grocery including other FMCG products, however the trend would be catching up as grocery and other FMCG products are big opportunity for retailers. According to the data available the food and grocery segment constitutes about 62 per cent of the total US $13.1 billion Indian retail market. Here are the reasons why grocery and FMCG market will thrive by coming online:
• Increasing PC and internet penetration
• Retailers are looking for newer verticals and grocery & FMCG have huge market and potential
• More than 60 percent of the players in FMCG are multinational. So, they will not have any hesitation in coming online.
• Today’s generation prefers to shop online rather than drive to physical store and most of the FMCG products are being purchased by age group of 18 to 35
• Discount offer will certainly drive customers to shop online. We have witnessed the success of apparel, electronics, computer peripherals and group buying through discounts.
• Online availability of grocery and FMCG product would help consumers to save time and avoid rush and hassle of processes like billing.
• Investment of retailers in offline medium is high, however in online medium they do not have to go for huge investment.
FMCG companies and retailers have started using the online medium not only for brand promotion but also for sales. However, it is a difficult category to break into in terms of online sales, but many retailers are making best efforts to do so. Companies, like Dabur, Himalya Herbal Healthcare, Neutrogena, Oriflame, Amul, Future Group, Aditya Birla Retail, REI Agro and Carrefour, are targetting Internet savvy consumers to expand their reach through the internet.
Take an example how grocery and FMCG products become saleable after a boom in telecom sector we have seen consumers make order on phone to local retailers (Kirana store) and retailers deliver the order to the customer. In the same fashion online process will also work. Speaking about online grocery and FMCG product Ankur Dinesh Garg, CMD, Wirefoot said “Online grocery and FMCG products have challenges and opportunities too. On one side it is difficult to meet supply chain requirement, tough operation and short delivery commitment and thrive on thin margins. The demand of online grocery is growing in urban population are aware about convenience they get. This is good time for entrepreneurs to foray in to by considering FDI norm get relaxed in times to come”. Apart from all advantages of online availability of grocery and FMCG products there are some challenges. Here we have outlined the challenges:
• Supply chain could be a great problem as for online operation it should be very imperative to have smooth network of supply chain.
• In FMCG products and grocery retailers get very thin margin, consequently it would be tough for retailers to provide discount and offer on these products
• Customer satisfaction is a big challenge. Gaining and retaining customer’s faith is tough to maintain as there is no face to face interaction with consumers
Pointing out the potential of grocery and FMCG products on online platform, Ambuj Jhujhunwala, owner of REI Agro Said “Of course the opportunity is immense but at the same time challenges are also great. Selling anything including grocery online is all about gaining consumer’s trust, so it should be the prime focus of retailers who want to sell grocery and FMCG products online”. Apart from smooth supply chain, communication should be very effective and responding. It helps retailers to keep in touch with consumers which further create good rapport with consumers.
Bala subrmaniam, BDM, Chennai online grocery shop also outlined the real challenge of running an online grocery store is fulfilling customer’s need and wish. “We regularly do market survey in order to know consumer’s expectation and based on those surveys we discover in which particular product consumers are interested. Consequently, we alter our product line based on our surveys”. One of the interesting trends Subrmaniam has informed that sometimes he gets order from abroad to deliver the grocery for their respective family in Chennai. However, he reiterated about the fact that online grocery and FMCG products have great potential but it will take some time to flourish.