Digital Transformation of the Indian Grocery Industry in 2020


2020 as a year has been able to challenge the status quo of every industry so successfully that it has become the yardstick of digital transformation. It has not only questioned the processes, ideas, values, and digital maturity of every industry but has also challenged to bring in a radical change through the Darwinian philosophy of ‘survival of the fittest’. 

While almost every other country in the world is waddling towards digital transformation, India has been moonwalking towards it due to the early foundations of digital disruption that were laid on this country.

The demonetization movie on the 8th of November 2016 gained such notoriety within India that it will always be remembered by the people of India who went through a quarter-long hassle of standing in long queues and the sudden lack of solid hard currency. But it also paved way for the people of India to turn towards digital modes of payment for ease and convenience. By 2018, India not only had digital wallets catering to the monetary needs of her people but also the UPI system that unified all the digital fronts for direct digital transactions from banks. 

In fact, today almost every local shop supports QR code-based payment and every other online mode of payment for a contactless payment option. This is what led to the easy implementation of contactless payment and delivery options in a country with over a billion people.

India’s digital transformation saga has just begun. The COVID-19 pandemic has accelerated greater acceptance of cashless payments as many consumers switched to digital and in many cases contactless transactions. According to a recent consumer survey, the usage of digital payments among Indian consumers in the current scenario was the highest around the globe, at 75 percent. Further, around 78% of Indians said that they will adopt digital payments more actively over the next six to nine months.

The current scenario, therefore, is a fertile bed for the growth of a symbiotic relationship between technology and mom-and-pop stores, especially with the increasing need for home deliveries, and cashless payments. Retail giants like Amazon, and more recently, Reliance, with JioMart have recognized the Grocery store as the new local touchpoint owing to their association with the daily life of an Indian consumer besides the indispensable trust they enjoy.

While the pandemic accelerated this drive multiple folds within a short period of time, the creation of a nation-wide digital infrastructure allied with new tools and technologies is what will help sustain the momentum while helping it to outlive the pandemic. The local retailer playing the role of a powerful influencer and a trusted aide to the Indian consumer, it is critical to reinvent and empower the humble Grocery network across the country as it serves as the backbone of the grocery industry.

With curtailed physical movement and supermarkets and large-form retail outlets shutting shop to evade the risk of community transmission, the pandemic has emerged as a ‘black swan’ moment for the Grocery stores. 

The local grocery in the neighborhood turned into a lifeline for both urban and rural areas addressing daily essential needs. Reports have shown that four months into the lockdown, consumer spending at grocery stores has risen by 22 percent. However, to sustain this momentum and to stay relevant post this crisis, it is crucial that local grocery stores adopt a hyperlocal digital model while offering a seamless shopping experience for ever-evolving consumers.

In this digital marathon, local retailers or the local grocery stores need to be digitally equipped so as to function independently without the needing for affiliation with retail giants. Local grocery stores should be empowered to embrace technology and modernize their businesses to cater to rising customer expectations. 

According to a survey by RedSeer, 70 percent of local grocery stores want to be able to accept digital modes of payment to keep up with the digitally-savvy population. According to an Assocham and MRRS India research, over 350-400 million retail consumers are projected to be digitally influenced by 2020, therefore digitizing a market that remains unorganized to a whopping extent of 90 percent is a task that needs to be taken up as immediately and extensively as possible.

From scanning QR codes to local stores accepting orders through WhatsApp as well as e-payment options through mobile wallets and apps, along with cards, local retail is fast gearing up for the digital marathon, but we have a long way to go yet.

QR codes, NFC such as tap and pay, biometrics to contactless ATMs and micro ATMs, we need a host of these new-age transactional technologies and much more to transform the space and considering the typical demographical traits of the Indian population the local grocery store is going to play a critical role in making them the new norm.

However, the digital drive needs to transcend beyond the fulcrum of urban India, to the real Bharat to truly bring about financial inclusion. With less than 30,000 ATMs across 6 lakh villages, rural, and semi-urban areas are plagued with a scarcity of digital infrastructure. Digitally equipping the local grocery stores to offer digital payment modes and services such as AePS and micro ATMs at the onset will help take digitization to the masses.

With consumer purchasing dynamics in a constant state of transformation, it is imperative that retailers develop the ability to transform digitally faster. Powered by the latest technologies, local grocery stores can offer quick, simple, seamless, and efficient micro experiences while playing a highly instrumental role both in driving financial inclusion as well as the transformation of India’s socio-economic landscape.

While demonetization pushed India’s need to take on digital and COVID-19 expedited the transition, building a robust eco-system powered by new-age technologies is what will ensure the digital drive not just outlives the pandemic but burgeons into a powerful new normal.


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