MORE FROM KrASIA

Indian government starts e-retail platform for rural India

As the demand for grocery has gone through the roof, Indian government has decided to build a  brand new e-grocer for rural India.

Photo by Wonderlane on Unsplash

While Amazon India and Walmart’s homegrown e-retailer Flipkart are still struggling to go deeper into Bharat–India beyond tier 1 cities–with their grocery delivery services, the Indian government is creating a village-level online retail chain to ensure the supply of essential goods amid the coronavirus outbreak.

As the healthcare pandemic that has infected over 31,000 people and claimed over 1,000 lives in India rages in the country, there is a severe shortage of essentials due to supply disruption in the wake of the restrictions imposed on travel and transportation during the lockdown period.

A report by local media Times of India (TOI) said the government’s ambitious plan is led by Common Service Centres (CSCs)–a physical facility used for delivery of essential services and social welfare schemes to people in rural and remote areas of the country. Of India’s almost two-third population living in rural areas, CSCs reach 600 million people through its nearly 380,000 outlets. While the outlets are set up and run by private parties, they come under the Ministry of Electronics and IT.

CSC chief executive Dinesh Tyagi told TOI that “the CSCs have been tasked with engaging in sale and supply of essential commodities like vegetables, milk, pulses, fruits, and other products.” The plan is to ensure all essential products are home delivered once retail outlets receive orders either online or offline.

A specially curated app has been provided to village-level entrepreneurs (VLEs), those who are in charge of retail activity in the CSCs. Customers can either go online and order supplies themselves or they can give orders offline to VLEs, who can make then make arrangements to transport the goods within a period of a few hours to a day at most, the report said.

“These [platforms] are like Amazon and Flipkart, but for the rural folk. We started with the initiative about three weeks ago and have already onboarded about 2,000 CSC centers that are catering to nearly 12,000 villages,” Tyagi said.

The government-backed e-retail chain has already serviced 5,000 orders worth INR 2,000,000(USD 26,405).

“Each VLE is allowed to cover a radius of 5-10km. The project is still in its infancy, but we plan to scale up very fast and reach 10,000 CSCs by the end of May, and around one lakh by the end of the year,” he added.

Rural and semi-urban India contributes a significant chunk of revenue for large fast-moving consumer goods companies (FMCG) in the country, and thus remains an important market segment. According to local media Moneycontrol, rural India contributes 37% to overall FMCG spends in the country and has been historically growing around three to five percentage points faster than its urban counterpart. A report by India Brand Equity Foundation expects the rural FMCG market to expand at a CAGR of 17.41% to USD 100 billion by 2025.