Are We Realising The Importance Of Cash And The Local Grocery Store During Pandemic?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Anupam Varghese, Chief Tinkerer, Tinkerbee Innovations
Mr. Raghu Veer Dendukuri, Founder, Ideal Nation and Solution Architect at Invincible Tech Systems Inc
Mr. Amit Jadhav, Former Program Lead, SVP – DBS Bank
Ms. Soojata Iyer, Global Head Process Design Retail CDD & Strategic Project, Standard Chartered Bank
Mr. Rakesh Watal, Head Liability Operations Western Region, HDFC Bank
Mr. Hemal Shah, Technical Product Manager, Mastercard
Mr. Arun Tanksali, Co-founder & CTO, Nearex
Mr. Jayesh Shah, CEO, Prism Cybersoft Private Ltd
Mr. Ramasubramanian S, Application, Transformation, Management and Operations Head, DXC Technology
Mr. Balaji Vishwanath, Head-Global Digital Acquisition, Standard Chartered Global Business Services
Mr. Neeraj Chandra, Head of Operations and Technology, Abu Dhabi Commercial Bank
Mr. Muthu Krishnan, Associate VP – Merchant Acquisition, India Transact Services Ltd
Mr. Kamonasish Aayush Mazumdar, Founder & CEO at Foodieverse
Mr. Abhishek Arun, Senior Vice President, Paytm
Mr. Saurabh Sharma, Head-Consumer Banking, India, DOHA Bank
Mr. Yogesh Gupta, Former Head Online Remittances- Money2India International Banking Group ICICI Bank
Mr. Shirsha Ghosh, Co-Founder Torit Innovations
Mr. Abhishek Mody, former Associate Director-Payment & Digital Initiatives, IDFC Bank
Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

During this entire Pandemic, the economy has been hit hard of all the countries. Thereupon FIAKS community put forth these crucial questions which came to limelight in this pandemic;

Question 1: Are we buying essential goods from nearby grocery shops or are we buying from the e-commerce portals who have been offering great discounts to us? Do you realize how important are these nearby grocery shops? Isn’t it a time for all of us to make a purchase decision with purpose?

Question 2: Also are we realizing how important is the cash in this digital age during such pandemics? Are our Grandmothers & Grandfathers able to use digital payment products to buy essential goods?

In response to this question, several members poured in their personal experiences:

A member said, “Using digital products by old people is definitely difficult. I tried teaching my parents and go online or make purchases using an ATM card. The result is my father lost Rs. 40,000 by sharing the ATM pin.”
While other member mentioned, “While I always used to think of how people might transact in a 100% digitized country; 2004 Tsunami is an eye-opener (when we stayed in Kakinada, Andhra Pradesh, a coastal town then), and when I thought to expect 80% to 90% digitization with 10% to 20% cash possibility, to handle natural calamities/epidemics, despite possible options like a barter system, etc, that worked centuries earlier, and may not be a better option, in this financial note centric transaction ecosystem (physical/digital)”
Another member stated, “Irrespective of corona or not, recently I shifted my residence from Kharghar to Panvel. At Kharghar, even a small shop used to take Paytm or card-based payment. But at Panvel, nobody is having digital payment options. Need to add that coming back to cash-based transactions is difficult for me as a person as irrespective of payment amount it becomes cash. Now I am worried about crossing the number of free transactions allowed.”
Also, the main issue for which people still prefer cash is the settlement time. In most cases, it is either EOD or T+1 or T+2 days. That’s why most of them still prefer cash. Why don’t we use instant settlement? Like suppose in PhonePe, after a transaction is done, the amount is credited to the merchant’s PhonePe account. Then he can withdraw this amount on any PhonePe ATMs.
Well, Grandmothers and Grandfathers need a truly one-click experience (any use case currently has at the least 4 to 5 steps to complete) to start using digital as they use cash. We haven’t seen product(s) giving them that and hence its an opportunity to innovate on.

Now, these are some personal opinions regarding grocery shopping put in by the community members:

A member says, “as far as my personal consumption is concerned, I still buy my groceries from local Kirana shop and haven’t used any online groceries since I need to see, touch and feel the product before I take it home.”
Again another member says, “I still buy all essentials from a local shop. They are good and they offer similar discounts as online shops. Nowadays, they also accept Paytm and UPI payments. Frankly, they have more alternate options and better information than online. Online is good for consumer durables which you have finalized else day to day essentials, my first choice is local store since they provide credit, easily take back the goods and replace if any issue and they are available at least time. Secondly, cash is always good. Since digital payments for Kirana’s are not good options. Due to the fact that when you need to replace the materials, the online shops take more time and they credit after some time. Also, with cash, you get better deals.”

Now check out these perks of local shops;

Local shops don’t stock a million SKUs, but they don’t need to. They have a very good idea of what sells in their area and stocks only such things. It makes it more likely that you will find what you need right there. So the long tail which online giants flaunt actually has little relevance for these guys as they keep things which give them decent margin and has good demand.
While big brands generally directly procure staff from manufacturers eliminating the middle supply chain. They can provide deep discounts. But in loose goods, the scenario is a little bit different. Retail chains provide loyalty points and other occasional discounts.
We have found that sometimes neighborhood shops offer the products at prices that are matching (or even lesser) than the online ones. It is possible to get the product within an hour (or even lesser) than wait for the next day (or later) delivery. Hyperlocal Aggregation that is then based on the delivery location, the nearest shop may deliver the order within 1-2 hours using Uber’s H3 and Google’s S2 Library this can be done.