The great rush to win neighborhood stores – ProWellTech
After spending more As a decade of disrupted convenience stores in the US and several other markets, Amazon and Walmart in India are pursuing an unusual strategy to face this competitor: friendship with them.
Walmart and Amazon, Both have restrictions on everything they can do in India in New Delhi and have partnered with tens of thousands of neighborhood stores in the world’s second largest internet market this year to take advantage of the massive presence of these mom and pop stores.
In June of this year, at the height of the pandemic, Amazon announced “Smart Stores”. For example, with this India-specific program, Amazon is providing physical stores with software to keep a digital log of in-store inventory and provide them with a QR code.
When consumers go to the store and scan this QR code with the Amazon app, they will see everything the store has to offer in addition to discounts and previous reviews from customers. You can select the items and pay with Amazon Pay. Amazon Pay in India supports a number of payment services including the popular UPI, as well as debit and credit cards.
The world’s largest e-commerce giant also has partnerships that allow it to use tens of thousands of neighborhood stores as delivery points for customers – and sometimes even rely on them for inventory.
India has over 60 million small businesses that dot thousands of cities and villages across the country. These mom and pop shops sell all kinds of items, are family run, and pay low wages and little to no rent.
This has enabled them to operate with an economy that is better than most – if not all – of their digital counterparts, and their size enables them to offer unmatched fast delivery.
Krishna Shah, a New Delhi based doctor on paper, is one of the perfect customers of e-commerce services. She lives in an urban city, uses digital payment apps, and her earnings make her in the top 5% in the country. However, when she had to buy food for her cats and needed it as soon as possible, she realized that it would take the big giants hours, if not longer. In the end, she called a local store that delivered the item within 10 minutes.
The neighborhood business, which employs less than half a dozen people, competed with over a dozen giants and heavily funded startups, including Grofers and BigBasket – and it won.
According to data from the Boston Consulting Group and Retailers’ Association India, the Indian retail market is at stake, valued at $ 1.3 trillion by 2025 (up from around $ 700 billion last year). By several estimates, e-commerce accounts for only 3% of the country’s retail market.
If that number wasn’t small enough, consider the following: Some of Flipkart and Amazon are those little retail stores. A senior executive with direct knowledge of the matter told ProWellTech that in some sales, up to 40% of all smartphone units are purchased in physical stores. The idea is to buy the devices at a discounted price, sit on them for a few days, and when Amazon and Flipkart are done with their sales, sell the same phones at their standard prices.
Sujeet Kumar, co-founder of Udaan, A Bangalore-based startup working with retailers said that e-commerce couldn’t disrupt the retail market even though smartphones and the internet have reached every corner of India.
“The problem is that it is very difficult for e-commerce companies to build a supply chain and distribution network that is more efficient than the one established by neighborhood stores. These mom and pop shops operate with an insanely different kind of cost economy. E-commerce companies are unable to do this, ”he said.
