New PwC study shows divergent online shopping habits across India’s urban-rural spectrum

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March 1, 2024

While it may appear otherwise, online shopping is no longer confined to metropolitan areas. With increasing digital literacy and widespread internet access, smaller cities and towns are also embracing this trend. Consequently, there are notable differences emerging in the purchasing behaviors, preferences, and attitudes of online shoppers across the country. According to a recent report by PwC, the online shopping demographic in India is no longer monolithic, necessitating distinct strategies for businesses catering to shoppers in major urban centers versus those in smaller locales.

The report titled “How India shops online: Consumer preferences in the metropolises and tier 1-4 cities” divides online shoppers into two distinct categories: those residing in metros and those in the rest of India. It delineates the key differences in preferences of online shoppers in these two geographies, underscoring the importance for digital sellers to take heed, as neglecting these disparities could pose a significant risk. With the continuous growth of e-commerce in India, these variations are expected to solidify further.

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Location can significantly influence buyer preferences, leading to varying consumer behaviors. For instance, online shoppers in bustling metropolises, accustomed to frequent traffic congestion and long commuting distances, prioritize different factors compared to their counterparts in smaller towns, where distances are typically shorter.

City residents, placing a high value on efficiency in online shopping, gravitate towards swift delivery services that cater to their desire for immediate satisfaction, often willing to pay extra for such convenience.

However, shoppers in other parts of India prioritize discounts and deals. These consumers are avid bargain hunters, as they reside in smaller cities where the speed of delivery holds less significance owing to shorter distances.

It’s noteworthy that the majority of purchases in the sports and fitness, home and kitchen, and health and wellness categories are being driven by consumers outside of the major metropolitan areas in India. Meanwhile, residents in metropolitan areas tend to concentrate their spending on grocery items, electronics, and fashion.

The surge of social media has been instrumental in boosting awareness of these products, subsequently driving up demand. In response, platforms have introduced new and budget-friendly products to cater to these cities. As incomes in other parts of India have risen, spending on these categories has also increased accordingly.

Both residents of metro cities and those in other parts of India demonstrate similar levels of acceptance towards UPI payments, suggesting a growing adoption and familiarity with this payment method.

Nonetheless, ‘cash on delivery’ continues to be the favored choice among shoppers in other regions of India as it helps mitigate the risk of fraud. This indicates that while there is an increasing acceptance of UPI payments owing to their convenience, speed, and security, there are lingering apprehensions surrounding online platforms and payment methods, particularly among shoppers outside metro areas.

Continue Exploring: Cash-on-Delivery remains top choice for Indian online shoppers, IIM-A survey finds

Generation X from regions outside of major cities in India typically favors card transactions for mid to high-value purchases on well-known platforms. This preference arises from the direct connection to bank accounts, providing a trusted layer of transaction safety. In urban areas, Paytm is popular for its user-friendly wallet, while in other parts of India, PhonePe is preferred for its intuitive interface. Google Pay ranks second nationwide.

Both categories of shoppers, regardless of their geographic location, exhibit a preference for shopping via apps rather than websites. This preference is consistent among all respondents. The reasons for this inclination include ease of navigation, a simplified user interface adhering to global standards, and support for vernacular languages.

Marketplace apps tend to garner higher download rates due to their diverse range of categories. When it comes to customer service and assistance, consumers generally prefer human interaction over engaging with chatbots.

Despite the geographical differences, marketplaces maintain a dominant position in the consumer market, especially with their combination of fashion and accessories offerings. In urban markets, Amazon holds a slight edge over Myntra, while Flipkart leads the way in the rest of India, followed by Meesho, Amazon, and Myntra. This preference for marketplace apps over category-based platforms is consistent among respondents from the rest of India, underscoring the significance of factors like deals, discounts, accessibility, user-friendly interfaces, and platform familiarity.

Designing experiences that resonate with all users across the country may not be the best way forward for digital sellers. The e-commerce experience that has worked in the urban centres may not necessarily work for the rest of India. The latter will need a more in-depth, human-centric view that acknowledges and capitalizes on the diversity that exists across in these smaller towns and cities.

“The report emphasises the need for tailored e-commerce experiences to resonate with diverse users across India,” says Prateek Sinha, Partner and Leader – Design and Experience Consulting, PwC India. “A human-centred approach, coupled with localised strategies and inclusivity, is crucial for success. It’s about connecting with each customer on a personal level, celebrating the rich tapestry of our cultures, and innovating every step of the way. By embracing agility and a deep understanding of consumer dynamics, businesses can chart a trajectory of sustained growth and profitability. When businesses get this right, they’re not just selling products; they’re creating experiences that people love and trust.”

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Marico Innovation Foundation facilitates collaboration between innovators and FMCG giants to curb plastic usage

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March 1, 2024

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The Marico Innovation Foundation (MIF), led by Harsh Mariwala, is actively fostering partnerships between innovators and Fast-Moving Consumer Goods (FMCG) companies to promote inventive solutions aimed at reducing plastic usage. Additionally, MIF is directing its efforts towards promoting innovation in the realms of food and agritech, as well as clean technology, with a strong emphasis on sustainability.

Over the past year, the twelve startups highlighted in the MIF plastics portfolio have collectively reduced carbon dioxide emissions by a total of 124,360 tons.

“I have been questioned on the use of plastics by Marico, though we use recyclable plastics many times there are challenges in recycling. The team came up with a proposal to do a study on innovators operating in the plastic industry which led to a report. The report was triggered that there is a need to identify individuals who did not know how to scale up. We do not invest in the innovators but help with the challenges they are facing in the business. The growth impact will be seen in a few years because it is like scaling up a business. Many are at the startup stage with innovations at a very early stage. It will take three to five years to move from start-up to an established company,” said Harsh Mariwala, Founder, of Marico Innovation Foundation.

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Harsh Mariwala’s Marico, a significant player in the FMCG sector, aims to transition to 100% recyclable plastic usage within the next five years.

“In Marico, we have reached a level of 94 per cent of recyclable plastic. Through this, we want to create a larger impact. It has to start from how garbage is collected from homes, segregation is important with end to end approach being very important. We will look at ourselves or with partners to work alongside municipal corporations on the issue,” he said.

Furthermore, the MIF foundation plans to adopt a circular economy approach to achieve zero waste, focusing on sectors such as food agritech, clean technology, and plastics.

“We have done facilitation of innovators and FMCG companies including Nestle and McDonalds. We look at a multiple array of brands. The foundation is looking at the ability to stay invested in the areas we have identified. Earlier we had identified innovation in particular sectors, engaged and then exited and found ourselves in other sunrise sectors. Going ahead we want to create an impact in the sustainability space, we will keep growing in the plastic waste management space, food and agritech is our next area of focus,” said Suranjana Ghosh, Head of Marico Innovation Foundation.

Continue Exploring: Marico’s Saffola introduces four exciting gourmet flavors to its oats range, catering to diverse palates and preferences

Chalet Hotels bolsters portfolio with acquisition of Courtyard by Marriott Aravali Resort, NCR

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March 1, 2024

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Chalet Hotels Limited has announced the execution of definitive agreements for the acquisition of the ‘Courtyard by Marriott Aravali Resort, NCR’. The resort boasts 158 rooms and occupies 14 acres of land. CHL has executed the definitive agreement for admission into the partnership with ‘Ayushi and Poonam Estates LLP’, the owner of CYMA. The Enterprise Value for this transaction amounts to INR 315 crore.

The company stated that since its establishment in June 2022, the resort has become the top choice for leisure travelers, MICE events, and destination weddings. Situated within a 1.5-hour radius from New Delhi, Gurgaon, and Noida, it offers convenient access to the Indira Gandhi International Airport in New Delhi.

The company additionally revealed that CYMA boasts an all-day dining restaurant, a bar & lounge, a pool bar, and a pan-Asian restaurant. Alongside these amenities, CYMA provides a gym, spa, pool, and a children’s play area, as well as activities such as ziplining, quad biking, automated paintball, artificial climbing, horse riding, and camel cart rides.

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Sanjay Sethi, MD & CEO at Chalet Hotels Limited, stated, “Courtyard by Marriott Aravali Resort aligns seamlessly with our stated growth strategy to expand into the leisure space at a drivable distance from the National Capital Region. This strategic acquisition accentuates the company’s adaptability and growth prospects to capitalise on emerging opportunities and solidify its position as an industry leader.”

Nevertheless, the shares experienced a 0.78 percent decline, reaching INR 804.10 at 10:54 am on the BSE.

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7-Eleven celebrates milestone with 50th store opening in India, eyes rapid expansion

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March 1, 2024

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7-Eleven, the Texas-based convenience store chain, has marked a significant milestone by reaching 50 stores in India. According to a company official’s social media post on Thursday, the latest outlet opened in Pune at the World Trade Center in Kharadi.

“50 is not just a number, it’s a milestone for the brand 7-Eleven India as we opened doors to our 50th store today at World Trade Center in Kharadi, Pune,” said Hardeep Singh, chief executive officer of 7-Eleven India in a LinkedIn post.

“The team’s laser sharp focus and hardwork has ensured we are able to achieve our business goal of rapid expansion. As our footprint grows, our commitment to delight every customer stays at the center of what we do,” Singh added.

7-Eleven offers a one-stop convenience to customers who are always on the go, providing instant solutions through ready-to-eat food, beverages, and daily essentials.

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Established as a storefront icehouse in Dallas, Texas in 1927, the Japanese-owned brand now runs over 84,000 convenience stores spanning across more than 20 countries worldwide. Nearly a third of its revenue stems from Asian markets.

According to the brand’s official website, the store chain is currently under complete ownership of Japan-based Seven and I Holdings Co. Ltd.

In India, Reliance Retail oversees the operations of 7-Eleven. The brand made its debut in the country with the opening of its first store in Mumbai in 2021. Prior to this, 7-Eleven had struck a deal with Kishore Biyani’s Future Group to enter the Indian market, but the agreement was terminated mutually by the two groups in 2021.

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Diageo India backs Telangana Police in fight against drink driving with Advanced Breath Analysers

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March 1, 2024

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Diageo India, one of the prominent alcohol and beverage companies in the country, has reinforced its commitment to combating drink driving by furnishing Telangana Police with 50 state-of-the-art Alcohol Breath Analysers.

The event was held in Hyderabad in the presence of Director General police Ravi Gupta, Additional DGP Railways and road safety Mahesh M Bhagwat along with senior dignitaries and members from the Diageo India team. Road Safety SP Gone Sandeep, LB Nagar Traffic DCP Srinivasulu, Cyberabad Traffic Additional DCPs Venugopal Reddy and Shivakumar and others were also present at the event.

Diageo India leads initiatives to promote anti-drink driving, notably through its flagship campaign, ‘Wrong Side Of The Road.’ This program employs a range of real-life scenarios to raise awareness among adults.

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Addressing the gathering, Director General of Police Ravi Gupta extended his appreciation to Diageo Company and the NGO CSR Box for their collaboration in supplying high-quality breath analyzers to the Telangana State Police Department. He emphasized the department’s pioneering role in several areas nationwide. Gupta underscored that this social responsibility initiative would bolster the capabilities of police personnel and contribute to curbing drunk driving. He expressed optimism that even saving a few lives with these devices would be a significant achievement.

Jagbir Singh Sidhu, Corporate Relations Director, Diageo India, said, “Promoting responsible consumption is one of the key pillars of Diageo India’s Society 2030: Spirit of Progress ESG plan.We stay committed to championing road safety in Indiaand promoting responsible consumption through focussed initiatives to curb underage drinking, drink driving, and binge drinking. Aligned to our ‘Wrong Side Of The Road’ program, these advanced alcohol breath analysers will support the TelanganaPolice Department in addressing the issue of drink driving and promoting road safety in the region.”

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Diageo’s “Wrong Side of The Road” initiative, developed in partnership with the United Nations Institute for Training and Research (UNITAR), seeks to enlighten participants about the ramifications of drink driving.

Moreover, Diageo India has partnered with over 25 Regional Transport Offices and set up tab labs to advocate awareness through the “Wrong Side of the Road” program.

Last year, over 230,000 adults engaged in this educational anti-drink driving campaign.

Indian retail sector on track for $2 Trillion growth by 2030, Dabur CEO highlights shifting trends and tech integration

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March 1, 2024

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In the coming years, the Indian retail industry is set for significant growth, as emphasized by Mohit Malhotra, CEO of Dabur. He anticipates its potential to reach a $2 trillion market, creating employment opportunities for 25 million individuals. Malhotra underscores that this surge will play a pivotal role in contributing to India’s GDP and overall economic advancement.

During his address at the Great India Retail Summit 2024, he highlighted that the primary catalysts reshaping India’s growth trajectory include the rise of the affluent demographic, the emergence of Bharat, and the widespread adoption of technology.

“India is changing at a fast pace in demographics, psychographics, usage behavior, and purchase behavior as the consumer is changing, and along with this, their buying patterns are also changing. Mom-and-pop stores were taken over by the modern trade, and it is now replaced by e-commerce,” he said.

Currently, e-commerce penetration in the nation stands at 7-9 percent, a significant increase from less than 1 percent five years ago.

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“At Dabur, e-commerce contributes to 10 per cent of the business. It’s amazing, the way technology is changing the retail landscape,” he said.

He added that credit card penetration in India is at 6 percent, while UPI penetration is around 30-40 percent.

“Indian consumer is becoming richer as per capita income in the last 12 years has risen to double from $1,400 to $2,500 and is projected to be going at $4,000,” he said.

“Going ahead, India will have higher disposable income as 50 per cent of the population of this country will be earning around INR 3 lakh plus every month. So, one in every four households will belong to the upper middle class and this leads to premiumisation and personalisation,” he further added.

Talking about shifts in consumer behavior, he observed that India’s population is younger. This younger demographic favors brands, retail environments, and ecosystems that prioritize responsibility, sustainability, social improvement, respectfulness, and transparency. He stressed that clean labeling signifies the future of the country.

“Going ahead, consumers will embrace only those brands who believe in not marketing but in transparency, trust, and genuineness,” he stated.

In India, the growth is going to come from the nine metro cities, and 30-plus boom towns, along with 50, 000 plus villages in Bharat, he said.

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“The consumption in rural is going to be 4.3X as compared to urban growth, which is going to be 3.5 X. So Bharat becomes as important as urban,” he asserted.

“Going ahead, rural shrinkage will happen because the economic power will move up in the country and India will also become urban and that’s what we call Viksit Bharat,” he further added.

The growth in rural India will be led by increased penetration and a transition from unbranded to branded products.

Additionally, there is a rise of new-age channels entering the country such as modern trade, quick commerce, e-commerce, and O2O. However, each channel operates with a distinct approach and caters to a unique consumer base, he remarked.

“This retail change is leading to the birth of digital-first brands and paving the way for premiumisation and personalisation,” he said.

“Apart from this, the path to purchase is also changing now. Instead of TV commercials, mobile has become the path to purchase. Social media has become an important tool. So, almost 30 percent of our spending today is on digital media or social media,” he further added.

Wrapping up the session, he mentioned that currently, 70 percent of the business still occurs through traditional trade. To keep pace with the evolving retail landscape, there’s a need to adapt and readjust; otherwise, profit margins may dwindle, potentially hastening the decline of traditional trade.

“Mom-and-pop will have to reconfigure them to self-service stores or standalone modern trade stores. They will have to adopt technology and install a POS and billing software,” he said.

“Every retailer has to become relevant. Retailers will have to gear up to be on ONDC, and become more technology savvy. Retailers will have to increase relevant assortments and channel financing will become important,” he further added.

He concluded by stating that physical stores will increasingly transform into experiential centers where customers can interact with and experience products firsthand, although ultimately, purchases may occur online.

Continue Exploring: Dabur announces INR 135 Crore investment for new greenfield facility in South India

ONDC sellers uneasy as Pai Platforms broadens reach through Bitsila deal

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March 1, 2024

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The acquisition of the ecommerce platform Bitsila by Pai Platforms, formerly known as Paytm E-commerce, has raised concerns among participants in the seller network of the government-backed Open Network for Digital Commerce (ONDC).

According to some participants, Pai Platforms is already among the largest buyer apps on ONDC, and the acquisition of Bitsila will expand its presence significantly on the seller apps side as well. However, both ONDC and sources within Pai Platforms stated that there is no justification for these concerns.

While seller apps enroll merchants, buyer apps are customer-facing platforms where customers can place orders.

Girish Pai, CEO of the seller app GrowthFalcons, remarked that if a buyer app transitions into a seller app, it will indeed raise significant concerns. However, he emphasized the need to intensify seller engagement and carve out a distinctive niche in response.

Continue Exploring: Govt-backed ONDC sees rapid adoption, CEO T. Koshy expects tenfold merchant growth in coming year

Sameer Sharma, chief executive of UEngage, which helps restaurants save aggregator commission, said, “With Paytm’s acquisition of Bitsila, it might say merchants will have more benefits if onboarded to ONDC via the Bitsila seller app. That may be their strategy. As of now, Magicpin is present both on the buyer side and the seller side. After this acquisition, even Paytm will be present both on the buyer side and the seller side, and this is problematic.”

Queries directed at Pai Platforms and Magicpin went unanswered.

Sources within Pai Platforms revealed that one of the primary challenges currently faced by ONDC is the expansion of its supplier base. As the third-largest seller app on ONDC, Pai Platforms is actively engaged in efforts to enhance this aspect of the network, with the goal of delivering benefits throughout the platform, according to the sources.

They mentioned a notable scarcity of suppliers, a situation that ONDC is eager to rectify. Additionally, they noted that many sellers commonly found on popular platforms such as Swiggy, Zomato, or Amazon have not yet joined ONDC.

Incorporating more significant players with extensive reach is seen as a beneficial move, sources said. Pai is focused on diversifying its array of offerings, including top restaurants similar to those on Swiggy and Zomato, to attract more users, they said.

Girish Pai cautioned that if buyer apps also enter as seller apps, there will likely be duplication of sellers or, specifically in the food and beverage sector, duplication of restaurants.

However, sources at Pai Platforms said, “If Pai is able to onboard a restaurant at a lower commission compared to other seller apps, it is not duplication; Pai is adding value to the network at a lower price.”

T. Koshy, the chief executive of ONDC, stated that worries regarding the network becoming monolithic on both the buyer and seller sides due to the presence of the same players operating on both sides were unfounded.

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People are increasingly getting influenced by what he called “a platform strategy”. “Platforms which have end-to-end control are successful. It is not possible for one entity to have expertise in everything,” he said.

“A major percentage of sales of established platforms come from a handful of sellers. The rest are long tail businesses that are costly for them. While some players may become large in the network, it is not possible for a few large players alone to corner all the business on ONDC,” Koshy said.

“In ecommerce, it is not just technological capabilities but operational capabilities too that matter. Regional players may have better operational efficiency compared to big players. They may be able to draw on SaaS solutions offered by large engineering companies. Magicpin alone cannot establish itself as the only service provider. There are other players like UEngage and Growth Falcon, too, who have established themselves because of their product offerings,” he said.

“One acquisition cannot corner every part of the market. One entity cannot acquire every seller, of every product, of every domain,” Koshy explained.

Continue Exploring: ONDC network live in 500 towns & cities, MoS Commerce affirms full adherence to e-commerce regulations

Commerce Ministry mandates auction route for dust tea sales in India

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March 1, 2024

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The Union Ministry of Commerce and Industry has made it mandatory for dust grades of tea produced in India to be sold through public tea auctions.

A gazette notification issued by the ministry last week also said that at least 50 per cent of other grades of tea – orthodox and the granular CTC (crush, tear and curl) – should reach the markets through the auction route.

“Every registered tea manufacturer shall, on and from the date of commencement of the Tea (Marketing) Control (Amendment) Order, 2024, sell (i) not less than 50 per cent of total tea manufactured in a calendar year… and (ii) 100 per cent of dust grades tea manufactured in a calendar year in its manufacturing units through public tea auctions, held under the control of the organiser of the tea auction licensed to do so under this order,” read the notification issued by the Commerce Ministry.

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Except mini tea factories, the ministry order is applicable for tea manufacturing units in seven northeastern states — Assam, Tripura, Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Sikkim — along with Bihar, Himachal Pradesh, Uttarakhand and West Bengal.

The Tea Association of India (TAI), one of the key bodies of tea planters and producers, said that it has been advocating the adoption of the public auction route as a single sales channel to ensure “fair price discovery” as the tea industry is “facing unprecedented challenges and is on the verge of collapse”.

Several tea estates bypass the tea auction centres and choose to go for direct selling, where the buyers dominate the prices.

Thanking the Commerce Ministry, TAI President Sandeep Singhania said that in response to the challenges facing the tea industry, the proposal for 100 per cent auction commencing with only dust grades has been put forward.

Dust grades constitute approximately 20 per cent of the total tea production in North India.

“We understand that implementing such changes comes with certain uncertainties and challenges. However, given the urgency of the situation, we believe it is necessary to test innovative solutions with full support for one season, and assess their effectiveness and potential impact,” Singhania said.

“The proposed 100 per cent dust auction signifies a bold move forward, and we encourage all the stakeholders to approach this trial with an open mind and spirit of collaboration,” he added.

Assam, which produces roughly 55 per cent of India’s tea, has more than 10 lakh tea workers in the organised sector, working in about 850 big estates. Besides, there are lakhs of small tea gardens owned by individuals.

The tea belts of the Brahmaputra and Barak valleys are home to more than 60 lakh people.

After Assam, Tripura is the second largest producer of tea in the northeastern region, producing around 10 million kg of tea annually.

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Nutraceutical industry growing beyond expectations: FSSAI chief

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March 1, 2024

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India’s nutraceutical industry with current market size of $4 billion is growing rapidly beyond everyone’s expectations, Food Safety and Standards Authority of India (FSSAI) chief executive officer Kamala Vardhana Rao said on Thursday.

Addressing an event organised by industry body Assocham, Rao said, “the nutraceutical industry is not just growing but flourishing at a rapid rate, surpassing all expectations.”

The focus on nutritional and food security has intensified due to rise in demand and supply, he said, adding that the regulatory role becomes paramount to ensure safety and efficacy of products amid tinkering in the genetics of food grains like wheat and rice.

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Speaking on the occasion, advisor in the Ayush Ministry Manoj Nesari said both neutraceuticals and ayurveda sectors are growing rapidly amid heightened regulatory focus, innovative breakthroughs and a symbiotic relationship between the two sectors.

He said the Harmonized System (HS) Codes for export of these products, though smaller in digit, are being implemented.

The Harmonized System is a standardised numerical method of classifying traded products.

Assocham National Wellness Council co-chair and Aroma Magic chairperson Blossom Kochhar, Zeon Lifesciences Ltd chairman and managing director Suresh Garg, Shefexil chairman Lal Hingorani and Tech Sci Research vice president Alwin Samuel were also present at the event.

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Gopal Snacks sets IPO price band at INR 381-401 per share, subscription opens March 6

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March 1, 2024

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Gopal Snacks has announced the price band for its upcoming initial public offering (IPO) at INR 381-401 per equity share. Subscription for the offering will begin on March 6 and end on March 11. The IPO comprises an offer for sale of INR 650 crore.

The floor price is set at 381 times the face value of shares, which are priced at INR 1 each, while the cap price stands at 401 times.

Bids can be made for a minimum of 1 lot or 37 shares and in multiples thereafter.

Continue Exploring: Gopal Snacks set to debut on stock market with INR 650 Crore IPO launch on March 6

Since the IPO is structured as an Offer for Sale (OFS), the company will not receive any proceeds; instead, all funds will be directed to the selling shareholders, namely Bipinbhai Vithalbhai, Gopal Agriproducts, and Harsh Sureshkumar.

Approximately 50% of the offer will be reserved for qualified institutional investors, 35% for retail investors, and 15% for non-institutional investors.

Gopal Snacks, an Indian fast-moving consumer goods (FMCG) company, holds a significant market presence in Gujarat. It offers a diverse range of savory products under the brand ‘Gopal’, encompassing ethnic snacks like namkeen and gathiya, as well as western snacks such as wafers, snack pellets, and extruder snacks.

As of September 2023, the company’s product portfolio consisted of 84 products with 276 SKUs spanning various product categories. Operating across India, it manages six manufacturing facilities, including three primary manufacturing sites and three ancillary facilities.

The three main manufacturing facilities are situated in Nagpur, Rajkot, and Modasa. These sites primarily specialize in the production of the company’s finished products.

The three supplementary manufacturing facilities primarily specialize in the production of besan (gram flour), raw snack pellets, and seasoning and spices. These items are mainly intended for internal consumption in the manufacturing of finished products.

For the six months ended September 2023, revenue from operations experienced a 3% year-on-year decline, amounting to INR 676 crore. However, profit after tax for the same period saw a slight increase, rising to INR 55.5 crore from INR 51.9 crore in the corresponding period of the previous year.

Intensive Fiscal Services, Axis Capital, and JM Financial are the book-running lead managers, and Link Intime India is the registrar of the offer.

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