Brick and mortar retail veteran Kishore Biyani has said that e-commerce players will get into groceries very soon. As someone who has been observing the e-tailing sector with a degree of apprehension, Biyani is not off the mark. The online groceries segment, or e-groceries, already has some dedicated players in India — Bigbasket, PepperTap, Localbanya and ZopNow, to name a few. And some of these firms are enticingly valued and are attracting good money from abroad.

India is the sixth largest groceries market in the world. Its e-groceries segment — a low-margin affair of about 10 per cent — is growing at about 30 per cent annually in cities. Experts estimate that India’s e-commerce market will cross $50 billion by 2020 and groceries is likely to form about a third of the total pie. No wonder even Flipkart and rival Amazon will be in this segment very soon.

This raises some regulatory concerns. E-tailing is known for its predatory discounting practices. Not many have an idea how this will impact the prices of farm products once e-groceries gain momentum. Big players such as Flipkart and Amazon — flush with VC money and the capacity to absorb losses to gain market share — can seriously disrupt grocery pricing. This poses a risk to not just neighbourhood shops, but the entire ecosystem of farm production.

There are packaging concerns as well. How much information can consumers expect to be displayed on the groceries sold online? Unlike consumer durables, selling eatables online poses several health risks. Given the precarious nature of India’s food regulations and the seemingly chaotic character of rules governing e-commerce, e-groceries can be hazardous. For instance, how will return policies work in this case? In a model where the seller stays aloof and it is the platform that most buyers trust, who will be responsible for damages?

It’s time policy mavens sat up and addressed the problem.

Assistant Editor

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