As grocery shopping increases in the world’s largest country, classic companies struggle to adapt
There are apps for everything you need: an extra handle, a carton of milk, a pint of ice cream or a spare phone cord that your dog has chewed in half for. For those living in India’s urban centers, and increasingly in small towns and villages beyond: almost everything can be delivered at the touch of a button, in less than 10 minutes.
Online shopping, also known as e-commerce, is changing the way India’s department stores are changing and nowhere is this clearer than through fast commerce: apps that can deliver groceries and other essentials to your door in the time it takes to boil. -boiled egg and with a charge of 30 pence, or less, for the service.
While only 6% of India’s $900 billion retail market comes from e-commerce, the market is one of the fastest developing in the world. years ago.
But in a fast-growing country of 1. 4 billion people, with faster economic expansion than almost anywhere else in the world, businesses and analysts say those numbers are only scratching the surface. By 2027, the number of online shoppers is expected to reach 500 million in a $170 billion market.
While some say the inventions may make India a world leader in new tactics for doing business online, others are more cautious in their predictions. Some analysts worry that the rise of e-commerce has opened the door for big companies to gain retail monopolies, at the expense of the dynamic classical market, while others argue that the boom was based on the exploitation of India’s developing workforce.
The suddenness of e-commerce is all the more remarkable because the way Indians shop hasn’t been replaced in decades. Unlike in the West, where giant supermarket chains have monopolies, strict regulations mean India has retained its hyperlocal way of shopping.
Fresh produce is basically sourced from local markets and sabziwallas (vegetable vendors). Other must-haves are sourced from the country’s 11 million kira, community outlets described as the backbone of India’s economy. While big fashion brands are popular, other people are still more common. They buy their clothes in retail stores and local markets, especially those who live outside urban metropolises.
For the past 10 years, the sector has been ruled by two companies, Flipkart, an Indian start-up that it later acquired through US retail conglomerate Walmart, and US tech giant Amazon. Together, they not only account for around 75% of the online grocery shopping market, however, given the lack of advertising chain monopolies in India, they are also the two biggest players in nationwide commerce.
However, the e-commerce landscape is becoming and emerging as India’s economy, the fifth largest in the world, continues to grow. Companies like Swiggy, Zomato, Big Basket, Zepto, Meesho, Blinkit, Nykaa, and Dunzo, which offer everything from food service and fashion brands to electronics, instant groceries, and medicines, have become ubiquitous not only in city centers but beyond.
While 90% of Indians still earn less than £250 a month and those outside wealthy urban centres are less likely to have disposable income, according to all the e-commerce companies that spoke to The Guardian, much of their expansion is in India’s smaller cities, Those with populations between 20,000 and 100,000 imply that buying groceries online is no longer just the domain of the wealthy urban elite.
Swiggy, one of the first apps to offer food delivery at places to eat and recently expanded into fast grocery delivery, ran in a dozen Indian cities in 2018; Today, it is close to 600. Rohit Kapoor, CEO of one company, attributes his expansion in part to the “digital equalization” he has witnessed across India, in which social media has exposed other people from all walks of life to new things while e-commerce platforms have still made it possible for other people to access them.
According to Kapoor, while Swiggy’s most common consumers are the middle and upper classes, and those in smaller towns are still reluctant to spend most of everyday life online, the replacement quickly dissipated. “Honestly, I think this market is just beginning,” Kapoor says. “I think there’s a big outlook in the next 20 to 30 years. “
Sameena Mir, 23, a student from Srinagar, Kashmir, says she has stopped visiting the markets altogether. “Online, the costs are relatively higher and you can get a variety of products elsewhere,” he says. They are original and original, especially the good looking products, unlike our local outlets where copies are basically sold.
Much of this boom became imaginable thanks to the expansion of reasonable web access. There are 659 million more people with smartphones in India and the mobile web awareness rate is among the lowest in the world. By 2025, 1 billion Indians are expected to have access to the web and 33% of them will be online shoppers.
The Covid pandemic has also played a significant role, as lockdowns sent other people shopping online for the first time, while forcing classic distributors to go virtual as a way to stay afloat. It also sparked a wave of e-commerce startups looking to take credit for the sudden demand.
The third replaces the considerations of virtual payment systems. Just a few years ago, India was primarily a cash-based society, with credit and debit cards only used by a small component of society. However, in recent years, this has been overcome. through a transition to a unified payment interface (UPI), in which millions of Indians have bank accounts connected to apps and smaller pieces, down to a cup of chai or a single banana, can be paid with a QR code on a mobile phone.
According to the Indian government, which proudly pushed the program forward, there were 74 billion UPI transactions in India in 2022, or Rs 126 billion, an increase of 91% in 2021. It has also made it less difficult to pay for goods purchased online.
However, e-commerce platforms have created jobs for millions of temporary workers at a time when jobs are scarce in India, legislation related to their employment has been delayed, leaving them vulnerable to exploitation and abuse.
Shaik Salauddin, who heads the Federation of Application-Based Transport Workers of India, says there are 23 million concert employees in India who operate without adequate legal protection. Companies such as Swiggy, Flipkart and Zepto say they will offer their staff benefits such as health insurance, turnaround policy and maternity leave, but agreed that more can be done across the sector.
Salauddin says that while the festival has intensified and expansion has slowed over the past year, many e-commerce companies have embarked on charge cuts that have gone directly to concert staff to remain profitable. Salaries lightly cover fuel charges, while staff have to suffer harassment. , violence and “inhumane” conditions.
Recent incidents include a concert painter having his throat cut and another who was killed by someone who refused to pay for a delivery. Meanwhile, those who oppose poor situations are banned from painting or threatened through doormen. According to a survey through the Centre for Internet and Society think tank, a third of Indian staff fear violence or aggression in paintings.
The factor was highlighted recently after staff at Blinkit, one of the e-commerce apps that promises 10-minute deliveries, went on strike in April after their salaries were cut by more than 50% to 15 rupees (15pence) in line with delivery. she told the Guardian they had no access to toilets or shelter between births, that they had no days off with the mandatory Sunday and that if a visitor complained, they were automatically required to pay their wages. Some staff members say they were threatened through police if they complained about conditions.
Nitin Sharma, 42, from Gurgaon, described how he earned just three hundred rupees (£3) for a 10-hour day and spent two hundred rupees (£2) on petrol costs, leaving him with a source of income of just one hundred rupees (£1) a day. “They treat us like animals,” he says. It’s like running for free. “
Sumit Kumar, 25, said the company took advantage of other people’s desperation. “Since there is no work, thousands of young people like me put their lives and their jobs at risk, even though we know that in the end we only earn a few cups of tea. “” said. ” It’s not imaginable for us in this. “
Workers also say nothing has been done to address the rising tide of abuses they face. Mohammad Yaqoob, 40, a driving force behind Blinkit in Delhi, says consumers abuse him because he is Muslim.
“A visitor recently cancelled the order and abused me when I went to deliver an order at the Hindu festival of Holi. “These are products for Holi. No I can take out of a Muslim’s hands,” he shouted at me, Yaqoob said. “I felt less and humiliated. I consulted my boss and they didn’t do it to me. They also misbehaved with me.
The recent strike ended after Blinkit agreed to “restructure payments. “In a statement to the Guardian related to the workers’ allegations, a Blinkit spokesperson said they were “based on an incorrect and incomplete understanding of the situation. “
Zepto is one of the country’s “unicorn” startups, offering deliveries of groceries and other essentials within 10 minutes to many cities. While “10-minute” grocery delivery has been tested in several countries, and the UK was added, it has never been implemented. on a scale like in India, a country almost the length of Europe. In just two years, the fast industry has the fastest developing online grocery shopping sector in India.
Launched in 2021 through two 18-year-olds who were reading at Stanford University in the US. Forced to return home to Mumbai when the pandemic hit, Zepto is worth $900 million, making its founders India’s youngest millionaires.
It started as a grocery delivery service via WhatsApp to a Mumbai singles district during the lockdown; Less than two years later, it is available in all major Indian cities and plans to expand. “Today, Zepto is bigger than most classic offline grocery players,” says co-founder Aadit Palicha.
To process orders quickly, the company has developed software that streamlines the process of packing, bagging and shipping groceries to about 75 seconds, and has built a network of obscure retail outlets that means delivery distances average around 2km.
“We’re multiplying millions of customers,” says Palicha. From our perspective, the immediate expansion of the industry in India will be greater than anticipated. “
But even as more players enter the market, some worry that the boom will also open the door for big companies and hardliners to monopolize India’s retail sector and make it difficult for independent e-commerce startups like Meesho, a popular affordable and second-hand fashion app — to compete and survive. despite having raised nearly a billion dollars in funding.
Tata Group, India’s largest and most productive conglomerate known as an automobile and steel manufacturer, has recently become one of the major players in e-commerce, opened its own online grocery shopping site and invested in online grocery delivery app Big Basket.
Reliance, one of the toughest retail, petrochemical and telecommunications conglomerates, has also made significant strides in e-commerce through its online grocery shopping platform jiomart and a 25% stake in fast grocery delivery app Dunzo. A recent report by research company Berstein predicted that Reliance would soon be the country’s most sensible e-commerce player, fueling broader considerations that profits from India’s economic expansion are concentrated in the hands of a few corporations and their billionaire owners.
Much of the pushback comes from India’s tough network of classic local community kiranas, colloquially known as “mom and pop shops,” which lately account for about 80% of India’s grocery market, up to 1% of groceries lately purchased online.
Some have gone virtual or partnered directly with e-commerce platforms; Flipkart, for example, claims that 200,000 Kiranas are among its one million distributors and that 30% of its deliveries are made through a network of such local stores. But many remain concerned about the effect of those emerging platforms on their businesses.
Balwant Singh, 30, who runs a kirana in Delhi’s Saket region, says he had a hundred engaged consumers who bought all his groceries from his store, but that number dropped to about 30 after in-app shopping became more popular.
“The rest of the consumers come to buy small parts from time to time,” says Singh, who recently made home deliveries in an effort to keep his business alive.
“I deliver only [a] half-litre packet of milk in which my profit is less than one rupee. But I do all this to retain visitors and offer a greater variety of online purchases.
This has proved problematic for the BJP government, as investors and the small business network have significant power, thanks to local influence and strong unions, and constitute an electoral group.
The monopoly of Amazon and Flipkart, two foreign companies, in the Indian e-commerce market has also adapted well to the BJP’s ultra-nationalist political agenda, while also being a major source of discord for the industry’s tough body, the All Indians Confederation. Industrial. .
In 2021, in an obvious attempt to break the stranglehold of foreign tech giants and appease the small business community, the government entered the e-commerce sphere as a supporter of the Open Network for Digital Commerce (ONDC).
As a public-private company, the concept of the ONDC is to allow corporations or Americans to build their own online sales network and put them in touch with partners who can only deliver the passes, without having to go through Amazon or Flipkart and without paying. commission. . . It is in its infancy, however, ministers said it would “democratize” e-commerce in India, boost business and costs.
Some have hailed his style as a revolution that can be copied around the world. “This is the future, it’s going to replace the way business works,” says Sooryah Pokkali, a member of the ONDC network. Others, however, questioned its feasibility and accountability mechanisms.
Pokkali acknowledges that it is “too early” to draw comparisons with corporations such as Amazon and Flipkart, and admits that there is some “inefficiency” and that “the customer experience can be much better” in the paintings network. “We are a long way from being at this level, there are many main points to paint, but eventually we will have the structure,” he said.
Yet despite all this growth, India is still hampered by a significant virtual divide. More than 50% of the country still lacks internet, significantly more in rural areas, while aspirations to buy groceries online remain unsuccessful for the poorest in society, who still number in the millions.
Hira Lal Raigar, 62, a retired instructor from Sarangpura village in Rajasthan, is among those wary of e-commerce. He has spent his life shopping for essential essentials at the local kirana and, a few times a year, going to the city fence if he wants clothes or shoes.
“I’ve never used it to shop online and I don’t think I can ever do it,” says Raigar. “How can I buy a blouse without checking the quality of its fabric by hand?Buying groceries online would possibly be a thing in big cities, here in the villages it is still very strange.
Aakash Hassan contributed to the Delhi report