Emerging Selling Models in Vegetable and Fruit Retail Business in India

Dipan Kumar Sahu, KSRM, KIIT University

Introduction
In the last one decade, the predominated unorganized and traditional vegetable and
fruit retailing sector has undergone a paradigm shift. The organized retailing of fruit
and vegetable by the corporate sector is expected to expand in India in the coming
years. While retailers are experimenting with new business models for procuring and
connected with producers, simultaneously testing out new approaches to marketing
fruit and vegetables to reach the consumers and value creation for its customers. These
arrangements are still evolving. However, these new ways of marketing fresh fruit and
vegetable are currently creating capacities for innovation in the space of retailing. The
rising urban consumer demand in terms of quantity, quality, choice and convenience,
organized retail is bound to innovate and expand at the both front and back end in the
value chain.
The current organized retail sector in fruits and vegetable are generally governed by
private and state agencies to promote more or less a direct interface of producers with
the consumers. Majority of the organised retail business generally run by corporate
giants and local private entities. Whereas there coexist of organized farmers market
retail chains promoted by state agencies, producer groups and cooperative. Among
many, few successful organised retail farmers market promoted by such agencies are
Apni Mandi in Punjab, Raytu Bazaars in Andhra Pradesh, Uzhavar Santhai in Tamil Nadu
and Shetkari Bazaar in Maharashtra are more producer focused. Though farmers
markets have helped participating farmers become aware of the products required by
the markets and helped them improve quality and diversify their product portfolio,
besides resource use maximization, they have not made major impact at the consumer
level as they could not scale up due to credit investment, innovation in reach out to
consumers and farmers form only a proportion of the sellers in these markets with
many of these markets being dominated by local traders and vendors.
Presently, different business models of fresh vegetable marketing are tested by the
organised retailers and they are rapidly evolving. They are likely to adopt practices that
have inherent strength of local values and global practice advantages. Compared to
traditional retailers, modern retailers are evidently cutting themselves off from the
clutches of middlemen in different ways. More over to this, application of internet and
information technology have made tremendous contributions for retail business
transformation. This has given birth to E-commerce which encompasses several pre
purchases and post purchase activities, considered as a new frontier of application in
retail industry in selling of fresh fruit and vegetables over electronic systems.

A lot could learn from the experience of these models. In the next section, few such
innovative retail firms in fruit and vegetable selling were highlighted from the
perspective of service delivery to end consumers using information technology.
FreshnDaily
Fresh N Daily is Mumbais first online fruits and vegetable store. It delivers best quality
products and at the best possible prices at doorstep. Firm procure goods directly from
the farmers/ brand owners and ensure there are no intermediaries. Moreover, unlike a
physical store supermarket/ neighbourhood kirana store/ sabziwala it is working as
an online store.
Thirty-year-old Vikas Chauhan, who quit an IT company, has a delivery van that
procures vegetables from local mandi, brands them with FreshnDaily packets and
delivers to areas it has identified as key zones. It has just two delivery boys who supply
in key zones. For the rest, it has tied up with small nook and corner shops.
mandionwheels.com
Mandi on Wheels is operating in Surat, where urban consumers could buy F&Vs online
targeted mainly at working urban women. The company started first outlet in 2007 in
250 sq ft area in Adalaj locality of Surat city. Now, it had four outlets, each of 3,000 sq ft
area and aimed to create 10 more of 5,000 sq ft. It is a mandi-styledretail outlets also
sold seasonal and exotic varieties of F&Vs. The mandi-styled shops provided the
customers the shopping experience of an organized retail outlet and a product display
similar to the traditional mandi. Mandi on wheels is an enterprise focused on bringing
the 'mandi' closer to customershome while keeping the essence of great range &
fabulous quality alive. The website is another one of the many ways in which it offered
door-step delivery of fresh fruits & vegetables. Orders could be placed in a 3 step
process which customer could begin by logging in, choosing the needed F&Vs, browsing
through offers and mentioning the correct address and phone number. The products
were delivered as per the need and on the time promised.
Veggi Bazaar
Veggibazaar is Indias first online vegetable & fruits store, launched in Chennai in the
year 2009, founded by R Venkatesan. It is the perfect environment for purchase of
fruits, vegetables. Its procurement begins at farms and maintains the freshness of
products till it reaches to consumers.
Veggibazaar.com takes orders online and delivers the very next day. This not only
ensures freshness of the productsan essential feature of the companybut also
means that firm does not have to worry about bulk storage space and associated
facilities, which is a huge saving. Clients can pay online through debit/credit cards or
pay cash on delivery. It also started providing additional facilities, such as nutritional
specific packages and loyalty points which customers can redeem against future
purchases.

HarraFresh
The HarraFresh Pvt. Ltd. Ahmadabad established in 2008 started the van based delivery
in Dec., 2008 dealing both at C2B and B2B level. The vans had a host of animated
characters like Lalu Tamatarand Raseela Nimbooamong others. Business model it has
a unique model of involving traditional vendors into its operations where in they are
trained in customer and sales management and given uniforms. They are hired on a
monthly payment basis besides performance based incentives and medi-claim and
accidental insurance. The company avoids competing with existing vendors and has 3-4
major societies having 80-450 households and a total of 1000 households which are
regularly supplied F&Vs.
The retail vans are mostly air-cooled to keep the produce fresh and replenished once a
day. All retail sales are on cash basis and B to B on credit. Retail buyers are supplied
twice or thrice a week and the institutional buyers are supplied directly from
distribution centre in ordinary auto rickshaws. The institutions are supplied every day.
Exotics F&Vs are sold only to institutional buyers. The procurement for F&Vs was done
through 2-3 procurement centres located near the mandi. The company had APMC
license to operate in mandi.
Farm2Kitchen.com
Farm2Kitchen Team is lead by Seema Dholi (Founder & CEO), a woman entrepreneur
who is committed to betterment of lives for Indian families. She started Farm2Kitchen
with only one mission - To enhance the quality of life for Indian families and provide the
best customer service possible.
Farm2kitchen.com deals only in organic groceries and textiles, and caters to Gurgaon
and surrounding areas. Set up in 2011, Farm2kitchen supports organic farming &
agriculture as organic farming is a holistic approach to food production, making use of
crop rotation, environmental management and good animal husbandry to control pests
and diseases.
Heritages Fresh@
Heritage Foods India Ltd. started with Fresh@ in 2006 with a store in Hyderabad.
Fresh@ has about 75 stores in Hyderabad (32), Bangalore and Chennai. Fresh@ has two
formats of stores: Flagship store Spread over 2500 sq. ft. with a merchandise mix
which fulfills all the essential home needs of the Indian housewife. This includes FFVs,
grocery, processed food, cleaning aids, general merchandise, bakery, dairy, beverages,
and frozen food. Daily format store spread over 1000 sq. ft., is essentially a food store
with wide daily fresh needs and the immediate top up needs of the consumer. 30% of
all merchandise is F&V. The company focuses on home delivery unlike other retail

chains and this delivery is done through retail stores. The company wants to use this
service for building a unique brand identity. Infact, each stores name also includes the
name of the locality e.g. the one at Banajara Hills in Hyderabad is called Fresh@ Banjara
Hills. The customers can order at the store, at the call centre, at the milk distribution
centre or e-portal. As soon as order is placed, buyer is informed of the availability of the
product or its substitute. The buyer can pay on delivery by credit card.
KNIDS Green
KNIDS Green in Bihar Set up in the year 2008 by Mr. Kaushalendra with the help of
Agricultural Technology Management Agency (ATMA) as a public private partnership
and a loan of Rs. 5 lakh from Friends of Womens World Banking (FWWB). KNIDS
encourages farmers to produce vegetables and monitors the grading, sorting and
packaging of the products before supplying it to its partnered vendors for distribution
to residential, commercial and market places. It has 3000 supplying farmers and its
brand- Samriddhi has become popular in Patna, Ara, Jahanbad and Nalanda districts.
Due to cutting out of the middlemans commission, farmers receive 35% higher price
and consumers 15% lower price than the local vendors. It has 50 designer push carts to
sell vegetables and they also carry ads on payment basis. It also home delivers
vegetables in bulk and issues cash memos. It has achieved a turnover of Rs. 4 crore
within two years and is attempting production and export of exotic vegetables to Dubai.
Summarizing Emerging Selling Models
From the study of above examples of emerged retail firms in the vegetable and fruits
sector, it is clearly understood that, most of the firms have integrated their service
delivery mode with information technology and have adopted multiple methods to
reach out to end consumers.
E-commerce facilitates purchasing anytime, anywhere and for almost anything desired.
Busy consumers prefer this to the restrictions of when a store is open and the need to
physically travel to a store. The rapid growth of e-commerce in India is being driven by
greater customer choice and improved convenience. The cash on Delivery innovation
has really help unlock the potential as people can now order products and pay when
they get physical delivery of the product. These are likely to be rapidly developing
selling channels for the future.
Along with the development of E-retailing in fruit and vegetable selling, growing of Econsumers base and purchasing behaviours have posited new emerging factors in fruit
and vegetable retailing. Innovation in this sphere is helping organised retailers to sell
end consumers both online shopping by offering benefits to customers and also through
conventional but organized version of retail stores and pushcart.

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