How is Technology Helping the Unorganized Segment of Retail F&B Move Toward Organized

Undoubtedly, Indian businesses are rapidly adapting to the new technology, helping them automate redundant tasks. This is incredible because when we zoom in on the Indian retail sector, and especially the retail F&B sector, a large part of it is unorganized. 

The unorganized food retail collectively generates more business than the organized one. The unorganized food business not only caters to the masses but also employs a large labor force which, due to various factors, has the highest attrition rate. These small-size hawkers, tea stall owners, food sellers, etc., bears the brunt of market volatility because they lack market awareness and tech support. They also don’t have organized finance management, quality raw materials, a proper inventory system, and, most importantly, data on business growth. For most of them, their manually-maintained sales and purchase books are the only way to map profits.   

Considering the volume and scalability of this sector, government and private players are taking many initiatives to set a systematic business model. A crucial role in doing so is being played by technology. Take the example of digital payment modes. It is now pushing businesses to accept multiple small and large online payments from their customers and vendors rather than ‘only cash’ transactions. To keep up with the market shift, more and more such businesses are setting saving a/c and accepting payment via various modes. 

These SMBs also understand the importance of having an overall presence. The old family-owned food businesses are now being led by young minds scouting for various opportunities to acquire raw materials at low rates but sell at higher margins on multiple platforms. Following the same mindset, these generation-old businesses are now available on many B2B marketplaces, reaching new clients across cities, states, and even borders. And when we reverse this chain, food businesses can access quality products. This is helping them scale, get a competitive edge, and have higher customer retention.  

India is the hub for make-shift food businesses. Every city here has localities or specific areas where multiple food stalls and hawkers work together, like unorganized food courts operating in set hours. Although many of their customers eat at the court or stall, they also take advantage of online food delivery. In fact, these food courts even use billing software to take orders. They are still discovering these complex software's benefits, but that is a start. These slow but perpetual shifts are showing significant impacts on businesses.

It will be a while before the shift from unorganized to organized becomes apparent, but that does not mean it is not in motion. The agenda of all this was never to recorrect or rearrange these stats but to empower small businesses with technology and help them sustain themselves in the market. If we are looking to set a strong foundation for the retail F&B sector, they are the segment that must be prioritized.