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“The concern for us is there may be a shortfall in inventory just after the GST rollout,” said Vipul Parekh, cofounder of BigBasket, the county’s largest online supermarket. “We have asked FMCG companies to ensure that stocks are not impacted in the three months just after the GST implementation .” Though online grocery is small compared with traditional retail within the Rs 2.5-lakhcrore FMCG market, it is a rapidly growing segment, fuelled further by giants Amazon and Flipkart entering the field. Most stores follow an inventory-led online model that’s capital intensive and requires retailers to stock up, invest in infrastructure and assure quicker delivery at the consumer’s doorstep. A recent Google-AT Kearney report on digital retail, FMCG and personal care forecast that the avenue will be among the fastest-growing segments online and grow threefold by 2020. Online grocery retail in India grew 44% in 2016 over 2014, and India was ranked the fifth-largest online grocery market in the Asia-Pacific region last year. Companies are pushing stocks ahead of the GST rollout via extensive promotions on transition, or unsold stock. This is to avoid disparities in tax payouts between pre and post-GST taxes. “Inventory compliance will be a tougher challenge for the smaller, sometimes single-brand suppliers, and may take some time to smoothen out the demandsupply equation,” said Prem Kumar, CEO, SnapBizz Cloudtech. The tech startup works closely with both offline and online retailers. Unlike traditional offline stores, online stores have fewer intermediaries between manufacturer and consumer.

For the original version including any supplementary images or video, visit http://economictimes.indiatimes.com/industry/cons-products/fmcg/gst-online-grocery-stores-worried-over-stocks-of-consumer-goods-running-out/articleshow/59043630.cms