Ecommerce Platforms will Evolve into Super Apps - Alok Nayak, Capgemini

By Alok Nayak, Senior Director, Head – CPRD Sector Hub, Capgemini discusses the potential of Ecommerce platforms in V&D Goldbook 2021.

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Alok Nayak

By Alok Nayak, Senior Director, Head – CPRD Sector Hub, Capgemini

Indian consumers are increasingly taking to online channels for purchases and the pandemic saw many new consumers enter the online channel. In urban India, the share of online shoppers among active internet users nearly doubled, from 22% before the pandemic to 42% during the pandemic. According to India Brand Equity Foundation (IBEF), the order volume in ecommerce jumped 36% in Q4 2020 in the country.

Online growth is expanding across categories: By Q4 2020, personal care, beauty, and wellness showed the fastest growth by order volume. Grocery and epharmacy are expected to see bulk of growth in 2021 with large business groups entering these areas. Single-brand category champions like Decathlon and IKEA too have started a strong push towards ecommerce.


Indian consumers prefer healthier baskets: With a significant increase in the number of COVID cases, the Indian consumer is approaching the future cautiously by prioritizing health, thereby preferring online channels for purchases while choosing to delay large purchases. For example, Dabur’s healthcare vertical contributed about 40% to its overall sales in the second quarter of FY21, compared with about 32% in the comparable quarter last year.

Data is increasingly used as a tool to drive online growth: Data-powered consumer product and retail (CPR) organizations, especially large organizations, are able to turn data into new growth engines. They launch new products and services, drive new business models and build a competitive edge using data. This is gaining increasing traction in India. For instance, Unilever, through the social business analytics platform of its global ‘People Data Centers’, has launched an AI-powered insights service that uses consumer data from social media, searches, and online reviews across all its business lines.

These capabilities helped Hindustan Unilever Ltd to identify matcha tea as a product that was gaining traction among increasingly health-conscious Indian consumers.


Indian CPR firms are sprucing up supply chains for online fulfillment: A case in the point is the decision by India’s hypermarkets chain DMart to convert some of its stores to dark stores and fulfillment centers to meet ecommerce orders.

Localization and regionalization are gaining traction: While the consumption habits in the COVID-19 era have gone through some distinct change, the average Indian consumer has become more cautious about spend. The desire to buy brands and products that are good for the society and environment are at an all-time high. According to a Capgemini Research Institute report on supply chain, 73% of organizations in India are actively investing in regionalizing and localizing their supplier base; with 55% of organizations actively investing in regionalizing and localizing their manufacturing base.

Direct-to-consumer (D2C) growth in India: D2C brands in India may be looking at a USD100 billion addressable consumer opportunity in the country by 2025. Since 2016, more than 600 D2C brands have entered India market. Growth in such brands is driven by the evolving consumer who seeks niche and customized products previously underserved by traditional retail.


During the nationwide lockdown in India, which led to closure of non-essential stores for many weeks, Nivea, which usually sells its products through retailers and distributors across different store formats, collaborated with Swiggy and Zomato to offer its service through the DTC channel.

What Worries the Sector?

To make important strategic decisions based on data, organizations need to trust their data. A Capgemini research on data-powered organizations points out that only 3% of executives in India trust the data they get. Data mastery is still an evolving concept among Indian retailers.


Most consumer product and retail organizations see the need for a significant shift in their supply chain strategies in response to the crisis. Reports indicate that 73% of organizations in India had difficulties in demand planning due to lack of data on fluctuating demand, while over 60% of organizations lost sales due to stockouts.

On the regulatory front CCI has an ongoing probe against large ecommerce players allegedly for unduly preferring select sellers in their marketplaces. Also, mandatory display of country of origin and safeguards against deep discounting are part of the draft ecommerce policy.

The Future Outlook


India’s ecommerce growth story will not be written by the digitally-savvy, upper middle class in Tier 1 cities who contribute to 10% of modern trade. Like Shopify in the US and Tmall in China, a comprehensive ecosystem is emerging to tech-enable the distributive trade sector. With large players like Metro Cash & Carry, JioMart, and Unilever, as well as startups like StoreKing, Khatabook, iPay Tech showing interest in innovating, this is work in progress.

In the next five years, we can expect a marked improvement in timely inventory, record keeping, credit tracking, along with analytics support for Kirana shops.

A period of retail apps: Ecommerce platforms will evolve into Super Apps, with other services plugged in from partners and group companies. The trajectory will be similar to WeChat in China where payment, ecommerce, food ordering, and cab hailing are all available on the same platform.


Need for strategic decisions: In these uncertain times, success hinges on business resilience and the ability to readily adapt to changing conditions. Companies in India need to accelerate their strategic ambition, acquire capabilities that set them apart, and place growth bets at a time when others are retrenching and recovering at different rates.

Traditionally, supply chains were designed for efficiency. Now there’s a need to redesign them to balance efficiency and resilience. CPR companies need to have purpose-led intelligent supply chains that operate fast, with more agility to fuel sustainable future growth.

Prevalence of new-age technologies: CPR companies need to invest in artificial intelligence (AI), machine learning (ML) and other tools to manage consumer experience and glean insights from shopping behavior and transactions. This will help them provide frontline staff with the insights they need to drive elevated personalized experience. For example, AI can be integrated as a tech enabler in interpreting demand signals and to proactively deal with fluctuating demands across supply chain operations.

Data analytics to drive business: Business model flexibility will be more important than ever, as well as having ecosystem partners that allow for experimentation. With the shift to omnichannel services likely to be permanent and as new business structural industry shifts to direct-to-consumer model, there is need for a stronger and integrated digital commerce strategy, aligned to new ways of shopping and fulfillment. This needs to be bolstered by intelligence and insights, driven by data emanating from across the ecommerce value chain. From an operating model perspective, the whole adoption of digital model has to be reimagined and rearchitected to suit the new business models.

New workforce for specialized needs: The type of skills and roles PR organizations need since the onset of COVID-19 are different from what was needed earlier; also, the way these roles will be sourced is becoming more innovative and agile. The rise of the gig economy and work-from-anywhere policies will require talent, and sourcing this talent will increasingly become geography agnostic, thereby giving both the service provider and the consuming organization more choices. The concept of the “workforce” will transgress beyond traditional organizational boundaries and will be further supplemented by the drive toward increased automation, as well as contactless and digitally driven processes.

The Opportunity

  • Growth in online pie: The share of ecommerce is estimated to be USD200 billion, of which organized retailing (i.e., modern trade) in India makes up 3% or USD6.4 billion. This clearly indicates the potential for growth of the market.
  • Increasing buying options for online consumers: Offering ‘Buy Online, Pick-Up in Store’ (BOPIS) options will help organizations offer more buying options for consumers.
  • Tools up in online channels: Offering try-and-buy solutions with augmented and virtual reality will offer attractive propositions to consumers. For example, Nike is using an AR application to help its customers find shoes of the correct size. The company’s app helps scan a consumer’s foot and tells them the right size for their footwear. Also, the customer information is stored in the app so that they don’t have to recheck their size the next time they wish to purchase.
  • Adoption of ecommerce by distributive trade: Over 92% of India’s retail market is unorganized and dominated by local shops owned by individuals. COVID-19 has established the importance of these shops. However, to be available to local and nearby customers, a virtual webshop and digital payment is a must. Sensing that 13 million Kiranas are waiting to be tech enabled, a host of VCs are open to fund new-age startups. KiranaTech could well be India’s next big driver for ecommerce.