Reinvention Time

Hindustan Unilever’s (HUL’s) Humara Store project is close to Chairman and MD Sanjiv Mehta’s heart. With the company generating 90 per cent of its business through general trade, Mehta has been passionate about digitally enabling kirana stores across the country. Way back in 2017, the company had converted a few grocery stores in Delhi into Humara stores. It tried to technologically empower the owner by getting him to order through HUL’s Shikar app. It also enabled him to offer online services to consumers and keep the right stock keeping units (SKUs) by using data analytics. Back then, a tech-enabled kirana store sounded unreal. In fact, many store owners downloaded the app, but never used it. “I have the app but have never used it. Who has the time to order online? I prefer distributors coming to my store and taking orders,” Arvind Sathe, a kirana store owner in Nashik, had pointed out then.

Fast forward to March-April 2020, the era of the deadly coronavirus pandemic where becoming digitally enabled is a must for the entire FMCG ecosystem. With traditional supply chain ecosystem nearly coming to a halt due to lack of manpower, FMCG majors (HUL, Britannia, Marico, ITC, among others) have hurriedly started using the digital route to get their products to consumers. The last one month has seen companies partnering with food delivery platforms (such as Swiggy and Zomato), cab aggregators such as Uber, and even security and community management solution providers such as MyGate and NoBrokerHood, to reach consumers. Third-party supply chain distributor ShopX claims a 46 per cent rise in ordering by traditional grocery retailers from its retailers. Metro has also been encouraging stores to order from its app. Close to 83 per cent packaged FMCG business in India happens through general trade while ecommerce is less than 2 per cent. The latter, say experts, will surely see a surge post the lockdown to 15-20 per cent but the most interesting bit is how the traditional distribution network, which FMCG companies have built over decades, will evolve.