Buying grocery now has a tech edge

Basically, it operates in the same way as you do railway or air bookings. But what takes the cake is there are no extra costs involved and the products get delivered right at your doorstep.What augurs well for the consumer is the competition is building up as more and more players try to wean away customers by lining up hefty discounts and other promotional features in an attempt to corner a bigger chunk of market share. Shailaja Sharmatakes a closer look.

When Vikrant Joshi, an advertising professional in Mumbai, stopped by the kirana store in his locality for a loaf of bread and some eggs, he was in for a pleasant surprise — the shopkeeper informed him that he could order his supplies online which would be home delivered. On top of it, the shopkeeper followed up his chat by offering his business card which carried the website address to place such orders.

Joshi’s neighbourhood fuddy-duddy kirana store is part of about 1,600 others across the country that are now delivering groceries at consumer door-steps through orders placed on AaramShop.com, a company that partners with local kirana and medical stores to sell food and grocery online. With a footprint across 24 cities, AaramShop is now looking to bring in 20,000 shops under its coverage to become the largest e-grocer in the country.

The modus operandi is like this. When a consumer makes an order on the website, he can select the shop nearest to his home for delivery. The shopkeeper is alerted about the order through an e-mail followed by an SMS and a call from AaramShop’s call centre. The waiting time is around 3-4 hours before the order can be delivered.

Unlike a typical e-commerce transaction, the company does not charge anything from the kirana stores or even from customers. Instead, it is looking to make money directly from brands by providing them with analytics of consumer behaviour so that they can figure out buyers’ brand preference.

AaramShop is not sitting on its laurels, which is launching Aaram TV, a concept for in-store advertising of brands where product companies can pay for advertisements to be run on screens at mom-n-pop stores so as to attract consumers. Up next are mobile apps for kirana store owners which will alert them about orders on their mobile screens. Vijay Singh, chief executive officer and MD, an entrepreneur for 15 years, started AaramShop last year, along with a team of friends.

The funds are flowing, with Bangalore-based grocery e-tailer bigbasket.com recently securing some venture capital funding. A host of other websites like mygrahak.com and easyration.com in Delhi NCR, kiranawalla.com in Bangalore, freshndaily.com in Mumbai and chennaionlinegrocery.com in Chennai are already selling food, grocery and fresh supplies with free delivery within 24-48 hours of order, cash on delivery facility and discounts.

On an average, a city household spends Rs4,000-5,000 a month on groceries. Retailers believe the top 20 towns offer huge growth potential as spends on FMCG products are seen going up.

According to KPMG’s calculations, food and grocery retail in India is currently estimated to be $250 billion in size and expected to grow at rate of 6-8% on real term basis. Of this market, share of organised retail is estimated to be only 3% currently, but likely to double to 6% by 2015-16.

But the point is why would consumers use the web instead of making a call to their local kirana store. Ashutosh Malik, director and chief operating officer, AaramShop, points to the hectic schedule of the working class which finds ordering its weekly supplies online an easier option. For the traditional retailers, this is an opportunity to bolster sales. “The neighbourhood has over the years seen a slump in orders. They understand the competition from modern trade and are embracing the technology to stay ahead,” adds Malik.

He points to the format’s convenience factor when he says even FMCG companies are excited by a model like AaramShop as it provides them with last mile connect with consumers. Companies can communicate to buyers directly at the point where the purchase is being made. AaramShop is banking on these consumer brands to advertise on its site and buy into the data it collates from the cities it caters to.

When consumers order for products with a call to their kirana store, the average order size is at about Rs200. But while buying online, consumers are able to do impulse purchases, with as many as 30 product categories, Malik says. “An average order on our site is Rs570,” he says.

The road ahead is not without some sticking points though. “Online retail becomes popular in categories that can offer convenience, comparison and price advantage. Although online retail presents a significant potential, food and grocery online retailing has significant challenges related to managing the supply chain, low margins and limited shelf-life of fresh produce,” said Mohit Bahl, partner, KPMG, transactions services. In Bahl’s view, penetration of online food and grocery formats in mature markets has been limited, with major hurdles being supply chain-related issues.

Some experts say even as Indian consumers have comfortably adopted online stores for their apparel and electronics purchases, grocery is a different ballgame as consumers prefer to handpick their food and items of daily necessities, whether it’s scurrying across store aisles or ordering weekly supplies over the phone.
Malik of AaramShop admits that a majority of online grocery formats have failed to take off in a big way in many markets — these have stumbled in the US even. Unlike books which come with higher margins, grocery retailing fetches margins below 15% and usually in single digits. That, coupled with challenges in setting up an orderly supply chain, makes the model unviable.

What consumers seek from their mom-n-pop shop is convenience of home delivery and option of credit, and from hypermarkets, an option to have all products under one roof, lower prices, and of course, a wide variety. Their demand from from e-commerce grocers will be a mix of all these.

TECHNOLOGY AS CHANGE AGENT

Tech Drives Growth in Grocery E-tailing
Supply-chain tech helps to reduce cost & inventory and predict user behaviour

Everyday, I learn something new,” says R Rammurthy as he picks up a netbook, an Android tablet and a paper-clip file before climbing onto the driver's seat of a white Maruti van loaded with four neatly packed baskets of grocery and vegetables. As he slips into first gear, he pointed to the netbook screen which displayed a map where the vehicle’s number flashed. The on-screen status of the vehicle changed from idle to moving and the address to which the baskets needs to be delivered popped up.
Rammurthy’s trip ended nearly twenty minutes later at the doorsteps of a customer-- mother of a three-year-old who hates to spend the little spare time she gets during weekends at the supermarket. During the drive, the 28-year-old management graduate, who now handles a small team for online retailer Bigbasket.com, started explaining how his company manages to keep near-zero inventory and fulfils hundreds of orders everyday.
Online food and grocery retailing, fairly mature in the West and showing lot of potential in growth markets like China, has not been able to capture the fancy of Indian shoppers yet. Things, however, may be changing as a new generation of wellfunded online firms -- Bigbasket.com is a key example -- are using simple end-to-end technology solutions to offer deep discounts on grocery items, predict customer behaviour and keep a tight leash on expenses. With technology playing a key role, they are trying to make a dent in the estimated $343-billon food and grocery market in India.
For example, these firms use a supplychain technology that allow customers to place orders through multiple channels and later predict what a customer is likely to order. Combined with applications that track everything from the time an order is placed to delivery and devices that help during procurement, technology is helping these firms to make a compelling and convenient offer to the tech-savvy shopper. For these online retailers, the most important tech application is the ability to predict customer behaviour which lets them reduce inventory and thereby, cut costs. For instance, while a traditional retailer might have to stock his monthly offtake of atta at least three weeks in advance, an online retailer ends up stocking it for less than two days. “That is mostly analytics,” says Ambuj Jhunjhunwala, the founder of Mygrahak.com which sells food and grocery online in Delhi. Predicting customer needs helps them to plan in advance and procure based on needs. Need-based procurement works ideally well with perishable goods like food not to talk about saving expenses on storage space, which is a large part of expenditure for a traditional retailer.
Analytics also involves knowing the customer better which helps retailers to make tailor-made offers for customers and increase sales. Online retailers can also eliminate a large part of their frontline staff because customers usually help themselves. Typically, large format brickand-mortar stores spend much of their attention to figure out customer behaviour on the shopping floor and arrange goods so that they catch customer attention. This can now be automated as the platform generates enough data about individual preferences. “You have complete control over knowing what your customer is buying and great level of predictability. The stickiness of forecasting can go up as you use technology to predict,” says Anand Ramanathan, Associate Director at KPMG.
Shoppers, whose experience of buying grocery online has been good, tend to very loyal. For example, Asha Liju, a clinical research professional from Bangalore buys her grocery online. “This is the second time I’m buying online because its simple and saves me nearly 10 kilometres of travel,” she says.
Here again, technology plays a key role. Grocery buying is mostly a repetitive task something technology is known to do well. For instance, when a shopper logs into the account, a history of previously bought items makes it easier to pick instead of going through the motion all over again. “At each step, simple technology is helping us save time and money,” says Abhinay Choudhary, co-founder of Bigbasket.com. Bigbasket.com, which now has 100 people on its rolls, will supply anything from milk products to fresh fruits among 7,000 other items at your doorstep at competitive prices within a few hours of placing an e-order. “Our delivery vans even have cold storage facilities. This is very new but if we do it right, it will be big," says Choudhary. His earlier venture was shopasyoulike, a similar food and grocery store catering to residents in Whitefield, Bangalore.
25-year-old Jhunjhunwala’s Mygrahak-.com now claims that they process nearly 15,000 orders a month. “The average order size is Rs 1,250- Rs 1,300 . We can at least grow 30 times in Delhi alone,” he said. He recently introduced “card on delivery,” where a customer can swipe their cards at the time of delivery to pay for the order. Jhunjhunwala comes from a family of entrepreneurs and returned to India after graduation learning how to do business from his family, the promoters of BSE listed REI Agro. Chennaionlinegrocery.com, Town Essentials and Atmydoorsteps.com also operate in this space. Scale might not be an issue as demand from a large working population, which finds frequenting supermarkets an irritant, grows.
Investors also seem to be buying into the grocery e-tailing story. Last month, private equity firm Ascent Capital invested $10 million when Bigbasket.com co-founded by a team of eight which includes Fab-Mall co-founders Hari Menon, VS Sudhakar, Vipul Parekh, VS Ramesh and Abhinay Choudhary, raised its first round of institutional funding.
The food and grocery market accounts for over two thirds of the $505 billion Indian retail market. According to retail consultancy Technopak, the retail market is projected to touch $725 billion by 2017. The organised food and grocery retail market in India is estimated at $ 12 billion in 2012 and grow at a compounded rate of 30% over next the five years. "Though e-tailing is still a very small part of retail in India it is projected to grow at a fast pace and over the next decade its presence will be significant," said Pragya Singh, Principal Consultant, Retail & Consumer Products, Technopak. Headroom for growth comes from the fact that that e-tailing accounts for a measly. 2% or $1 billion of the overall retail market and it is expected to reach $13 billion by 2017.
But retailing food and grocery online is not an easy task. Though there are success stories, the monumental failure of Webvan in the United States back in 2000 is enough to act as a damperner.
The challenges include being able to give consumers a large number of products to choose from, achieving consistency in quality especially when it comes to perishable goods and the cost of logistics. For instance, Mygrahak’s Jhunjhunwala has already invested $1 milllon in the firm and anticipates an expense of $4 million to $5 million every time it moves to a new city. While critics often cite the example of Webvan, the story may not repeat in India. Webvan may not be the best benchmark, argues Singh. “It is an example of a company that grew too fast in middle of the dotcom boom, rapid expansion to multiple cities, gigantic infrastructure including warehouses but not enough sales to back the same,” she said.
Even as its spends Rs 150- Rs 400 to acquire each customer, Mygrahak.com will break even this Diwali, claims Jhunjunwala. Despite the rosy numbers, e-tailers looking to sell food and grocery might have to expand cautiously, suggests Technopak’s Singh.
The Challenges
Achieving standardisation
in quality and quantity when a large part of grocery items are still sold loose in India
Having a comprehensive product range that covers all possible variations
Delivery across large parts of urban and semi-urban areas
Sensory needs of consumers are not satisfied through online channels
Fulfilment and logistics costs More:http://epaper.timesofindia.com

Top 10 Festivals in India

Colours, songs, dance, prayers and oil lamps are typical for Indian festivals.

The large population across the vast region of India is consist of different religions that celebrate their own religious festivals. Hinduism, Islam, Christianity and Sikhism are major religions in India, among others. Some festivals are unique to local regions while there are other vibrant festivals celebrated throughout the country. The following describes some of the widely celebrated festivals in India.

Durga Puja and Dussehra

Travels during the later part of year to any Hindu region of India, will present visitors the Durga Puja, one of the biggest and most popular festivals in the country of the Hindus. This festival is in worship of the the Hindu Goddess of Power, Goddess Durga. Although the festival is a ten-day affair, observation of rituals and ceremonies are performed in the last six days. The last day of Durga Puja is known as Dashami or Dussehra.The festival takes place generally between the months of September and November and is widely celebrated in Eastern India. States from other parts such as Delhi and Karnataka also celebrate this festival. Thus, we can say that celebration of this festival takes place with great gusto all over India.

Diwali

Diwali or Deepavali for the Tamils, is the festivals of lights. Celebration of Diwali is also celebrated grandly throughout India. As India boasts of diverse cultural heritage, every region celebrates Diwali in its own special and unique ways as the visitors on different tours will witness. However, the history behind the celebration of Diwali is the same throughout all regions and is based on the legendary victory of Lord Rama over the demon Ravan. Mainly, five days are observed as Diwali. Dahnteras, Choti Diwali, Badi Diwali or Lakshmi Puja, Govardan Puja and Bhai Duj are the five days of the Diwali celebrations. Each of these days has its own significance and history related to the divine celebration.

Ramzan Eid (Id-Ul-Fitr) In Id-Ul-Fitr, the word Id means festivity and Fitr means breaking of fasting. Therefore, the term means breaking of fasting and having celebrations. Id-Ul-Fitr indicates the end of the Muslim month of fasting, Ramdan. Id-Ul-Fitr takes place when a new moon is seen after a month of fasting. The Muslims visit the mosques and offer prayers to Almighty Allah. Id-UL-Fitr is a three-day celebration. Some devotees may even choose to travel on a pilgrimage tour to Mecca, considered as the Islamic Holy Land. This festival is celebrated not only in India, but also all over the world where Muslims can be found such as Pakistan, United Kingdom, Indonesia and Sri Lanka, just to name a few.

Holi

Tours to many regions in India during March will surely include Holi, the festival of colors. It signifies the victory of good over evil and celebrations are through a carnival of colors. The main occasion takes place on the day of full moon in March every year. This popular festival is celebrated throughout India. Holi started in Mathura at Vrindavan which is the birthplace of Lord Krishna. People celebrate this day smearing each other's face with colors, known as "abir".

Janmashtami

Janmashtami signifies the day of the birth of Lord Krishna, who is the eighth incarnation of Lord Vishnu. The date of the festival is not fixed. It depends on the cycle of the moon, according to the HIndu calendar. However, it usually takes place in the month of August or September. The first day is spent on fasting and offering prayers until midnight, when Lord Krishna was believed to be born. Many Hindu devotees travel to Dwarkadhish temple in Dwarka- Gujerat as part of pilgrimage, and Shri Krishna Balaram temple, in Orissa are some of the venues, where the main celebrations are performed.

Ram Navami

Ram Navami signifies the birthday of Lord Rama. Celebrations of Ram Navami take place on the ninth day of "Sukla Paksha" in the months of March and April, determined by the Hindu calendar. The day of the festival begins with offering of prayers to the sun and then singing devotional songs during the midday, the time when Lord Rama was believed to be born. Celebrations are the most grand in Ayodhya, the place of birth of Lord Rama, and a popular tour destination especially for HIndu devotees.

Ganesh Chaturthi

The festival of Ganesh Chaturthi is dedicated to the Remover of obstacles, Lord Ganesha, son of Lord Shiva. It is a ten-day long festival. Ganesh Chaturthi is celebrated with great gusto in Maharashtra and other South Indian states. People buy Ganesh idols and worship it for ten continuous days. After the tenth day, the idol is immersed in a river or sea. During this festival, cultural programmes and feasts are also held to liven up the occasion even more and such events are interesting additions to any travel itinerary.

Guru Nanak Jayanti

Guru Nanak Jayanti is the main festival of the Sikh religion. It is the birthday of the founder of Sikh religion, Guru Nanak Dev. It is celebrated in the month October or November on the day of full moon. Sikhs celebrates this festival by visiting the Gurdwaras (Sikh temples) and offering prayers. They start the day with a morning procession from the Gurdwaras proceeding to respective localities singing hymns. There are also other practices such as distribution of Langar or common meals to everyone in the community and lighting up earthen lamps in homes are observed in this festival.

Onam

Onam is a widely celebrated festival in the state of Kerala. This ten-day festival signifies the harvest season which also corresponds with Chingam, the Malayalam new year. During the festive period, people wear new clothes, visit temples, perform traditional dances like Kaikottikkali. The main theme of this festival that one cannot miss is the rowing of boats in huge rows to the rhythm of drums. Tours to the renowned Keralan backwaters during this festive season can include the exciting boating event that is sure to enthrall any traveller.

Ooty Summer Festival

The summer festival in Ooty is held in the month of May. This festival is held at Botanical Garden. This cool region in India with greeneries all around and so it is just perfect for the Ooty Summer Festival. Many fairs and shows such as Flower Shows, Fruit Shows, Boat Races comprises of the Ooty Festival. Cultural programmes traditional classical arts are also a part of the festival. Sports such as trekking are also arranged for people who love sports.