CSC eStores post record sales riding on rural demand surge

NEW DELHI: The central government-backed Common Services Centres (CSC) Grameen eStores exclusively servicing rural markets has done a record Rs 73 crore in sales in the months between April and August, with rural growth continuing to grow faster than urban for packaged consumer goods, CSC chief executive Dinesh Tyagi said.

CSC has partnered with close to half a dozen packaged consumer goods companies including Coca-Cola, appliances maker Whirlpool, PepsiCo and cookies maker Unibic, and is in talks with another 20 companies including Britannia, Nivea and Adani Group, he said.

The Grameen eStores, a rural e-commerce platform which now has 1.2 lakh online stores, was launched in April after the nationwide lockdown was announced.

“There is a vacant market space in rural e-commerce and the CSC network is being utilised to develop a sustainable e-commerce model,” Tyagi said. He said by August, the platform had fulfilled 9.35 lakh orders.

Industry executives said the CSC platform could challenge e-commerce giants Amazon, Flipkart and Bigbasket with scalable operations and could be a game changer in time to come.

“The disruption caused by the pandemic has opened up new route-to-market opportunities both in urban and rural markets. The CSC model can give consumer companies a headstart which can be supplemented by their own e-channels in due course,” said Sandip Ghose, corporate strategy advisor. Ghose said Amazon and other e-commerce platforms will also need to reinvent their fulfilment models for both urban as well as rural markets.

The eStores connect village entrepreneurs with companies and enable door step delivery of localised daily use products and brands. Tyagi said the CSC is targeting adding one lakh new e-stores over the next one year.

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With demand in rural markets being resilient on the back of minimal retail disruption, higher farm incomes and government stimulus, companies have been pushing bottom-of-pyramid or entry-level pricing, with packs and new products at price points as low as 50 paise, Re 1 and Rs 2.50. While intermittent lockdowns have been impacting discretionary spending in urban markets since April, growth in rural markets is outpacing urban demand.

Data by researcher Nielsen said consumption in rural markets is expanding at double the rate of urban, while overall growth in the FMCG segment is estimated at about 5% in the next nine months.

Ratings and research advisory Crisil said in a report that while FMCG companies’ sales are expected to contract 2-3% in the current financial year, rural India should fare better. The government’s economic package which stepped up allocation of funds under the MGNREGA by an additional Rs 40,000 crore and forecast of a good monsoon will spur consumption in the hinterlands, Crisil said in the report.



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