Hindustan Unilever to help kirana stores compete with big cos via ONDC
Hindustan Unilever (HUL) became the first fast-moving consumer goods (FMCG) company to join ONDC last year through UShop
 "Hindustan Unilever to help kirana stores compete with big cos via ONDC")
Hindustan Unilever (HUL) announced that it will assist in the onboarding of nearly 1.3 million kirana stores onto the central government's Open Network for Digital Commerce (ONDC) network, reported The Economic Times (ET). This will allow kirana stores to compete with e-commerce and quick-service grocery retailers.
The move is an expansion of Shikhar, HUL's internal ordering system that allows small neighbourhood merchants to order straight from it. The app now accounts for almost one-third of HUL's sales from neighbourhood retailers.
HUL became the first fast-moving consumer goods (FMCG) firm to join ONDC last year through its multi-brand direct-to-consumer (D2C) platform, UShop.
Kedar Lele, HUL's executive director of consumer development, told ET that they realised that retailers needed to service orders directly instead of HUL doing it through UShop. "They've made it halfway with Shikhar and are starting to order on their own. In the future, 1.3 million stores might join the ONDC network and buy whatever the retailer sells, not simply HUL goods," said Lele.
He added that HUL serves as a "digitalisation agent or hand-holding team, which makes a neighbourhood retailer compete with the best, the biggest in the e-commerce business for hyperlocal servicing".
The move is an expansion of Shikhar, HUL's internal ordering system that allows small neighbourhood merchants to order straight from it. The app now accounts for almost one-third of HUL's sales from neighbourhood retailers.
HUL became the first fast-moving consumer goods (FMCG) firm to join ONDC last year through its multi-brand direct-to-consumer (D2C) platform, UShop.
Kedar Lele, HUL's executive director of consumer development, told ET that they realised that retailers needed to service orders directly instead of HUL doing it through UShop. "They've made it halfway with Shikhar and are starting to order on their own. In the future, 1.3 million stores might join the ONDC network and buy whatever the retailer sells, not simply HUL goods," said Lele.
He added that HUL serves as a "digitalisation agent or hand-holding team, which makes a neighbourhood retailer compete with the best, the biggest in the e-commerce business for hyperlocal servicing".
Kirana stores on ONDC
HUL is pioneering the programme with an integrated Shikhar module called the Shikhar Seller app, through which local kirana stores can go live on ONDC and offer their whole product catalogue online. It is being piloted in New Delhi and Bengaluru, spanning 60 stores, and will be phased in across India.
"We believe that now is the right time to begin enabling it because, as ONDC grows, retailers will begin to plug into it. And with that momentum, we'll be able to service the retailer as well, and they'll be able to keep their share of the business, which would otherwise be tough for them," Lele told ET.
ONDC is a free and open platform that aspires to democratise e-commerce. It is expected to benefit small merchants through more advanced technologies and improved business methods. There are over 12 million mom-and-pop establishments in India today, with just about 0.12 per cent being tech-enabled, and e-commerce accounts for roughly 4 per cent of the $800 billion retail sector in India.
Experts say that joining the open network allows businesses to operate in an e-commerce ecosystem with no predetermined limits. The network also provides services such as logistics and enhanced analytics, allowing retailers to optimise operations and improve overall business performance, they added.
"We believe that now is the right time to begin enabling it because, as ONDC grows, retailers will begin to plug into it. And with that momentum, we'll be able to service the retailer as well, and they'll be able to keep their share of the business, which would otherwise be tough for them," Lele told ET.
ONDC is a free and open platform that aspires to democratise e-commerce. It is expected to benefit small merchants through more advanced technologies and improved business methods. There are over 12 million mom-and-pop establishments in India today, with just about 0.12 per cent being tech-enabled, and e-commerce accounts for roughly 4 per cent of the $800 billion retail sector in India.
Experts say that joining the open network allows businesses to operate in an e-commerce ecosystem with no predetermined limits. The network also provides services such as logistics and enhanced analytics, allowing retailers to optimise operations and improve overall business performance, they added.