Metro Cash and Carry plans to take ecommerce route for kirana stores

From launching an ecommerce portal to handling the backend operations of more than three million mom-and-pops and grocery stores, German wholesaler retailer Metro Cash and Carry is planning to take major steps in the digital space to take on the rising competition in the burgeoning B2B wholesale retail space.

 

Over the last six months, the company has changed its strategy to digitise the operations of its customer base. This will help Metro gain a better grip on the backend operations, including inventory management, of all kirana store owners who are its clients and ward off competition from Walmart India, Amazon India, Alibaba and latest entrant Lots Wholesale.

 

Arvind Mediratta, managing director and chief executive officer of Metro Cash and Carry India, said the company is the leader in the segment and the change in the strategy would help it gain more ground.

 

The company has also come up with a host of store solutions from providing point of sale (POS) devices, digitising catalogues, to even backend inventory management solution which it plans to launch soon. The company as a pilot has also ‘modernised’100 kirana stores and changed everything from the facade of the stores, modern fittings and fixtures that would help owners serve customers better to making the whole retail experience digital.

 

“The stores that want to increase their business need to become more inviting and become digital so that they can service customers faster. The changes we are doing to the store would cost them anywhere between Rs 50,000 to Rs 200,000 but the return on investment would be much higher. We expect the revenues to increase by 40 per cent. If they sell more they will buy more from us as well,” said Mediratta.

 

While the company is aiming to revamp and digitise all the three million stores it has as customers, it does not see it as a separate revenue generator but as a means to getting more business. Metro has partnered with EasyPay for POS devices but plans to partner with other players as well.

The company is also planning to launch an ecommerce portal within the next few weeks. It said ecommerce would help it get repeat business from customers who are not able to make it to the store with greater frequency.

 

Metro would be using its store network for logistics and handle the delivery of products on its own. The ecommerce initiative would be initially curtailed to areas close to the stores.

 

LOTS Wholesale Solution, which recently launched operations in India, started ecommerce operations within weeks of launching its first store. LOTS plans to open 15 wholesale distribution stores in the next three years and plans to bank on an omnichannel approach to gain customers.

 

Metro will soon open store number 27 in Ghaziabad. Last year it had said it plans to open as many 50 stores in the country by 2020 and has set aside almost Rs 15 billion for the expansion. For such a rapid expansion, the company is also planning to launch smaller format stores that would be almost half of the present 100,000 square feet store size.