Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Atul-Sharma

In an exclusive interview with ET-Insights, Atul Sharma, Executive President, Bajaj Electricals reveals the key trends that will revolutionize Rural e-commerce in 2020. 

He also shared his thoughts on how omnichannel strategies are reinventing Rural e-commerce along with an example of a successful omnichannel project. Read on to find out what he had to say:

ET-Insights: What are the key trends that will that will revolutionize Rural e-commerce in 2020?

Atul Sharma: The key trends in Rural e-commerce in 2020 are as follows :

  • Launch of government policies such as Digital India and Digital Villages.
  • Brands understanding and tapping in the potential of rural market with the help of assisted e-commerce.
  • Omni-channel presence of brands will not only instill trust but also make rural customers habitual of online shopping experience and help turn customers into brand loyalists.
  • Multi-lingual apps and websites will help brands/e-commerce connect with the rural consumers.
  • Focus on local marketing and use of social media channels like TikTok will further emphasis the brands into the minds and lives of rural consumers.
  • Progressive Web Apps (PWA) : Platform such as big basket and flipkart already have PWA (these are websites that can be also used as an application), this allows entry level smart phones (Avg selling price of a smartphone in India is $112, EY Report) to use the apps with ease in the entry level smart phones
  • Public Wifi to enable 40 million connected users: Govt of India and Private companies such as google are making public wifi accessible to users to push people to start accessing the internet. Government aims to reach five million access points in 2020 and 10 million in 2020 to provide coverage and internet connectivity, for 600 million Indians Railtel, Indian Railway and Google to offer public Wi-Fi in 400 stations (around 7.6 million monthly active users). Reliance Jio is currently operating 200,000 public Wi-Fi access points and it has plans to deploy total 1.5 million public hotspots by the end of 2019–20. Facebook has partnered with Airtel to open 20,000 hotspots. It now has around 1000 Wi-Fi hotspots having started with 700 in 2017
  • Aadhar enabled payment: Payment solutions using credit cards, debit cards, automated teller machines (ATMs) and point of sale (PoS) machines can make banking in rural India a costly proposition. Using Aadhaar-enabled payment system (AEPS) like micro ATMs, which are handheld devices that use thumb impression to enable payments and cash withdrawals can help address the high cost of payment solutions (Forrester Research)
  • Micro credit consumer lending – enabling the rural consumer: Informal micro credit lending given by kirana stores, local pharmacists or any other local stores has been in existence for ages. In order to empower rural consumers to buy throughout the year and not just after harvest session, it is vital that consumers have access to responsible and easy lending. This gap for small credits is fulfilled by fin–tech start–ups such as Red Carpet and Zest Money, which are catering to users across rural and urban areas.
  • Supply side innovations – leveraging asset light models in logistics which includes hybrid market and inventory model using the space of brand infrastructure. Leveraging network of existing logistics players like India Post for distribution and delivery.

ET-Insights: How omnichannel strategies are reinventing Rural e-commerce?

Atul Sharma: Omni-channel is an eCommerce approach and must not be confused with multi-channel marketing. While multi-channel marketing is a more comprehensive approach to establishing, an individual presence across marketing channels such as Facebook, mobile app, website etc. Omni-channel specifically targets optimizing the different channels to create an overall experience necessarily.

In a country where half of its population resides in the rural, it is hard for a brand not to consider them in their omni-channel strategy.

A good example for this will be StoreKing, a Bengaluru based start-up whose main focus is on being the digital touch point for rural India, and to strengthen the Indian growth story by connecting brands and services to fill rural consumption demand. With over 47,000 stores across 10 states, enabling retailers to sell more products and services to the walk-in customers. StoreKing works with all major brands of FMCG, mobiles, household appliances and also offers services like insurance, domestics money transfer, investments, etc.

Today, established players like Amazon and Xiaomi are partnering with StoreKing to achieve engagement with rural customers. This engagement includes building experience zones for these brands in rural India.

ET-Insights: Can assisted e-commerce solve the problem of insufficient reach?

Atul Sharma: In a market where the brands find it hard to reach their customers, who are high in numbers but diversified in the languages they speak and read, assisted e-commerce comes to rescue as it not only helps the brands but also the customers by bridging the years long gap.

Take for example BoonBox, an assisted e-commerce company started by Inthree Access Services in 2013 deals directly with Brands and manufactures and connect them to the rural customers through assisted e-commerce.

It is currently present in 16 states and has already served 2.5 million customers so far. Boonbox has a local team, local language-based apps available in various local languages and a customer service team speaking the languages of 16 states to make buying process seamless for the rural customer.

The company has over 200 brands associated with it in various categories. Boonbox provides home delivery of products that rural population otherwise don’t have access to. The start-up sources products and gives a demo, provides installation and post-sale services to customers. Boonbox has an incredibly deep last mile network and an elusive distribution reach in rural India.

Another example of NextDoorHub is trying to bring the touch and feel and get rural customers habitual to the online shopping experience. Started in the year 2017, it sees most of its consumers in the age group of 16-35 years and mostly women looking to shop for household items.

With big players like Reliance testing Ajio with ekiosks in its 7500 Jio Stores (most of them in smaller cities and towns), we can safely say that Assisted e-commerce is the way to help rural customers get habitual and get them on the upward journey of online buying.

ET-Insights: Can you give us an example of a successful omnichannel project?

Atul Sharma: Nykaa.com is a leading one-stop online store for all beauty and wellness needs. Currently, it has nearly half a million customers with 800+ curated brands and nearly 1 lakh products listed on it. In recent years, Nykaa has ventured into private label products and offline retailing as well. Currently, it has stores in over 20 cities spread across India.

After being a leader in beauty eCommerce, Nykaa wanted to offer their customers holistic shopping experience. The natural extension was to allow a touch-and-feel of products in a physical store. The main difference in the offline retail experience and the ecommerce channel is the products that are stocked. While Nykaa.com can easily list hundreds of thousands of products, the stores get a curated selection of 40-50 brands especially chosen for the location, city and outlet. Given this smaller selection and the fact that Nykaa is primarily an online brand, the split between online and offline orders is skewed towards the former. Ecommerce accounts for 85% of the business, but when compared on the basis of brands that are available both online and offline, the revenue share is split 50-50. That’s an encouraging sign for Nykaa as it expands its retail footprint.

But offline retail is not just about experiencing products — the stores help customers discover new brands and also consult the in-store beauty advisors. Another insight that Nykaa drew is that for products that require application training the first time or for brands or SKUs that are new to the market, customers usually make the first purchase offline and later replenish the product via online orders.

Grossing INR 1229 Cr in FY19, Nykaa aims to continue investing in the omnichannel business and has plans to open up to 100 stores in the next two to three years. New cities being targeted under these expansions include less popular locations such as Jammu and Bareilly among other Tier 3 and 4 cities

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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