Don’t miss the latest developments in business and finance.

RWAs: The powerful new link in the supply chain during the pandemic

The pandemic has changed the way we shop and consume, resulting in new power centres

As new networks of influence emerge, the wheels of the supply chain are clearly beginning to spin to a new rhythm
As new networks of influence emerge, the wheels of the supply chain are clearly beginning to spin to a new rhythm
Arundhuti Dasgupta
5 min read Last Updated : Jul 25 2020 | 2:15 AM IST
Freshly out of engineering college, Aashruti Shah, 21, was set to join the prodigious tech industry when Covid-19 struck. Forced to stay indoors, she began helping at her mother’s small, and now struggling, catering service for homemade snacks in Powai, a densely populated suburb in Mumbai. “My father (Dhaval Shah) and I began looking at ways to get vegetables and fruits in bulk, and through a friend, we managed to get in touch with a group of farmers willing to supply if there were enough orders.”

Out of their necessity was born Farm Fresh, a farm-to-table e-grocery that services 1,000-1,500 families in the neighbourhood and runs via WhatsApp and Google Forms. The Shahs were able to bypass the stronghold of local stores, handcarts and big e-commerce operators because they were quick to align their forces with the new, emerging power centre in the supply chain: resident welfare associations (RWAs) and cooperative housing societies (CHSs).

“RWA is the big influencer in the new brand-customer journey,” says Shashank Shwet, partner–Customer Experience and Design Thinking, EY India. Shwet recently released a report on the new shopping habits and kirana (local grocers) stores as part of an EY series called “Humans in a Pandemic”. The report identified housing society committees as the emerging stakeholders in the supply chain. “They come with large buying power and a large amount of control over who can access society retail spaces.”

Companies are quickly falling in line with the new jurisdiction. Large brands such as Mondelez India (Cadbury, Oreo), Amul and retail giant DMart, among others, have stepped in to engage with residential communities as aggregated blocks of consumer demand, plying branded trucks directly to customers with a promise of contactless delivery and sanitised packaging. The EY report found that many companies are also tying up with community-centric apps to bring down the cost of delivery and exploring long-term relationships with resident groups.

Such relationships are being forged by new-age brands too. One such is Zama Organics which, its co-CEO Pratik Choksi says, has seen B2C (business-to-consumer) clients double during the lockdown. His company supplies organically grown fruits, vegetables and grains. As anxiety over what we eat has grown and is discussed more freely among neighbours, Zama has found its way into several housing society groups as a trusted alternative.

Many companies are quickly adapting to the needs of the community and the RWAs. For instance, fresh meat delivery brand Licious has changed its delivery model to suit residents who are now mostly at home. The brand is constantly engaging with residential associations over safety protocols. Licious has seen daily deliveries go up by around three times, with a 30 per cent increase in average order value from customers.

Meghna Apparao, its chief business officer, says that over the last quarter Licious registered a 300 per cent surge in demand. “We have recently initiated a pilot of having Licious chillers in large apartment complexes,” she adds.

However, whether these new networks will last once this exceptional time is over is anybody’s guess. Rachit Mathur, MD and partner at BCG India who leads the consumer and retail practice, says RWA-led intervention is more of a short-term opportunity. “Will it last and in what form, we will need to watch,” he says. Mathur instead sees kiranas as a critical asset for all consumer goods companies. “Their importance will continue to be high.”

It helps that kirana owners are usually old hands in the business with deep ties with the local community. Virji Shah, who runs a tiny store in the slumberous neighbourhood of Chembur in Mumbai and who had lost many clients to the supermarkets in the area, says he has never been busier. In many areas, kirana owners like him are working with local residents’ associations to ensure safe pickup and regular supplies, while holding their power over the community as a bargaining chip with big brands.

As new networks of influence emerge, the wheels of the supply chain are clearly beginning to spin to a new rhythm.

Zero degrees of separation

When trust is at a premium, people want things that are local, accessible and come recommended. What they seek is minimum degrees of separation, says Priya Lobo, CEO of Ormax Compass, a market research agency.
 
This has led brands to knock on the doors of residential societies. And for all of them, the point of contact is an RWA and a CHS that sets down the terms of engagement while monitoring the entire exercise. In a large residential complex in Mumbai, for instance, the CHS secretary circulates grocery lists a week in advance and sends the order to the retailer a day ahead of the scheduled drop. The parking area turns into an outdoor store and people pick up pre-ordered provisions at allotted times.
 
Lobo, an active resident in her complex, says the aim is safety, convenience and affordability. Of course the process is not frictionless. Harsh words and ruffled feathers are not unusual on WhatsApp groups that facilitate such arrangements. But with trust and purpose paramount, neighbours have never been closer.

Topics :CoronavirusLockdownE-commerce sellersOnline groceryFood delivery

Next Story