From “Love for Local “to” Online Shopping in Local Languages” – How Consumers are driving the Changes in Indian Retail Post Covid -19

It is proved now that Covid-19 is not just a novel virus but it has been instrumental in bringing the novel challenges to the world and the world of business. It has influenced the shopping habits and buying behavior of the consumers and so the businesses who serve these consumers. The Lockdown phase threw many challenges both for organized and unorganized retail to maintain their supply chain. While most of the modern retail outlets could not operate due to restrictions, many e-commerce platforms kept struggling to ensure deliveries in absence of manpower and issues related to inventory management. The most trusted format during the lockdown phase has been the local neighborhood grocery store which despite all challenges kept serving its customers and didn’t let them go out of stock for essential food items. The second format which somehow managed to maintain their services was hyper-local platforms like Big basket and Grofers. 

While lockdown has not only forced but influenced also for the increased use of technology and the Internet to manage and maintain business operations, it has motivated the consumers also to use technology for their day-to-day shopping. The increased number of Internet and social media users is the testimony to the fact that Indian consumers are now ready to accept technology as an integral part of their lifestyle post-covid-19. This influence of technology has been observed in their shopping habits also as now they are more open to using online shopping and doing digital payments even for the small ticket items. This change in consumer behavior has forced brands and retail players both to transform their business operations and use technological solutions not only in their business processes but in front-end operations also to provide customers a new experience in their shopping post lockdown. To serve their customer better and meet their expectations, every retail format has been bringing infrastructural changes in their business process. With modern retail still not been able to recover fully due to lower footfall of customers, the fight in the food and grocery segment is mainly between online players and unorganized players. While unorganized neighborhood stores have already high on consumer preferences due to the sheer advantage of being local and nearby, the main challenges lie with established e-commerce platforms like Amazon and Flipkart. Hyperlocal formats have also started working on their supply chain and contactless deliveries to ensure the pace of growth to be kept at a level to eat the share of modern retail in the F&G segment. To attract customers, the e-commerce platform is also working towards localization and adding customer interface in local languages to attract customers in smaller towns and virgin markets. It would be interesting to see how much it would benefit them without revamping their supply chain. This article is aimed to assess the potential benefit localization and building consumer interface in local languages may offer to neighborhood kirana stores and e-commerce platforms.

Love for Local

Most of the academic research suggests that the survival of traditional stores from the increased competition from large retail stores greatly depends on the commitment and willingness of traditional retailers to meet the local community needs. The ability of stores to instill a sense of familiarity in the customer leads to building trust and commitment for the stores which impact the speed and efficiency in shopping. Local neighborhood stores have been instrumental in developing this sense of commitment among their consumers during the lockdown period which resulted in gaining not only the new customers who were wary of other formats but also building trust in factors of quality, hygiene, and freshness of the product. According to a report by Mckinsey (April 2020) estimated a 39% growth in consumer footfall at these local stores. Reports by many other research firms also substantiated the fact that consumers have found a new love in neighborhood stores. But to earn this trust, these stores have also brought serious changes in their business operations some out of necessity and some out of compulsions. In most of the cases, these changes were driven by consumers who forced the stores to accept the orders via messaging apps and ensure deliveries at home with proper precautions. The increased acceptance of digital payment by these stores can also be accounted for choices set by consumers as they refrained from using the cash. 

Changes in Consumer Habits during Lockdown

The prolonged lockdown has kept people at home, leaving them little option to go out and involve in any physical activity. Work from home and online classes for students led growth in internet data and increased penetration of the internet. According to a report by Kantar, the active Internet subscriber base of India is estimated at 639 million by end of 2020, thanks to the Coronavirus lockdown that has pushed people inside homes with very little scope to venture outside due to the safety concerns and restrictions. This phase also led to a few other changes in the consumer lifestyle. A report by research firm, KalaGato suggests a more than double kind of growth for live streaming platforms like Netflix and Amazon Prime Video. While another report by kantar says a 50% increase in usage & 76% growth in time spent on the messaging platform WhatsApp. When consumers were busy spending more time on the internet and social media, it led to change their shopping habits also. However the first preference of consumers was neighborhood stores to source their grocery and food items, hyper-local platforms became their second choice by replacing e-commerce platforms like Amazon and Flipkart which were struggling to main their supplies and deliveries. A report by KalaGato says that during the lockdown the usage of e-commerce sites such as Amazon, Snapdeal, and Flipkart witnessed a decline as most consumers shifted focus to hyper-local grocery retailers like Big basket and DMart (delivery app) for essential purchases. The increased preference for neighborhood stores and hyper-local formats somehow forced the e-commerce platform to change its strategy to reach out to their existing as well as new consumers. 

What Prompted e-Commerce Platforms to go for Local Languages 

To maintain their existing customers who somehow were not very satisfied with the services being offered during the pandemic and to enter into a new segment of the market which now looks to be more receptive towards online shopping and digital payments, e-commerce platforms are working overnight to get back the space they lost. Coming festive season is an opportunity through which they want to regain their customers. Since most of the new internet users added in the last few years and especially during the lockdown phase is from rural India. Currently, rural internet users are 10% more than urban internet users and this segment is critical for e-commerce platforms. Since more than 90% of new internet users access content in vernacular languages (Nielsen, 2019), these platforms were somehow forced to add the interface in their language. Hindi was the first language that was added by these platforms while amazon recently added 4 new vernacular languages Kannada, Malayalam, Tamil, and Telugu to expand its reach among consumers of these languages. Rival Flipkart which had introduced hind only last year despite being a home-grown brand has added Tamil, Telugu, and Kannada in July this year post lockdown blues. Another player Snapdeal which is comparatively smaller to Amazon and Flipkart is better placed with content available in 8 languages Hindi, Tamil, Kannada, Telugu, Malayalam, Gujarati, Punjabi, and Marathi, in addition to English.

Why Southern Languages

After Hindi, southern languages create the biggest block of internet users as per a report of KPMG (2017). The same report suggests that the Tamil language has the highest internet adoption level followed by Hindi and Kannada among Indian language internet users. Marathi and Bengali are the next segments of the Indian language internet base which along with Tamil and Telugu constitute 30% of the total internet user base. It is expected that by 2021, the total share of Indian language internet users base will be 72 % against 28% of the English language user base by 2021 which will force the e-commerce platform to add user interface in more vernacular languages.

How Local Languages can impact the adoption of Digital Payment

For the e-commerce platform, online payment by customers is almost a prerequisite for being able to shop as cash on the delivery model had made a huge hole in their pockets due to cost involved in reverse logistics. Research states that Tamil, Telugu and Kannada language users have relatively higher potential for the adoption of digital payments which provides another opportunity to these platforms to connect with target consumers in their language to expand their business.

Shop on-line in Local Language, get delivery by Local Store 

It can be concluded that consumers are forcing both organized and unorganized retail players to bring the changes in their process, operation, and communication to remain relevant to the dynamic Indian market. While getting into the vernacular language can open up a 200-300 m user base for e-commerce players, it can help them reduce the impact of hyper-local as well as filling the gaps created by modern retail for time being. But to ensure last-mile deliveries, it is always advisable that these platforms must build partnerships and synergy with local neighborhood stores to keep their customer satisfied from day one. If the consumer is ready to buy from these platforms in her language and can get supplies at the nearby local store which also speaks the same language, it will enhance her experience of buying. This synergy which is already being experimented but has yet to take a structured shape will give a competitive edge to both the players seeing the newfound love for Indian food and grocery business by many more players who are still waiting to enter the market with lots of potential and possibilities.