Why This is the Perfect Time for Vending to Bloom in India

Today, using a mobile app, the consumers can make use of any of the multiple digital payment methods to instantly purchase goods for consumption.
Why This is the Perfect Time for Vending to Bloom in India

The concept of vending was first introduced with the aim of providing a way for consumers to access essentials, even during closed hours. However, the ease of operations and the machine’s capability to operate 24/7 without human dependency have made it a retailers’ favorite. The vending industry has been blooming all around the world, with its pioneer being the United States of America. As of 2017, there were more than 6.9 million vending machines in the USA, with annual spending through these machines at $7 billion annually. The North American vending machine market is poised to grow at a CAGR of 14.3 percent between 2017-2023.

The Current State of the Vending Industry in India

When it comes to the vending industry in India, currently the majority of vending machines are mainly found in offices. A research report, ‘Vending in India’ found that vending machines are scarce, however, those that do exist, always have a helper, which comes with its own set of issues and in a way defeats the very purpose which made vending popular across the globe. Vending never really took off in India, due to the low consumption appetite of Indians as well as the ease of finding labor relatively inexpensively.

However, the last two decades have seen India transform into the world’s third-largest economy after China and the US. India has become the focal point of consumption with brands from all over the world trying to get a foothold in the market. India overtook the US as the world’s #2 market in apps downloads, with 12.1 billion, according to Forbes. Moreover, Forbes also reported that the average data use per subscriber grew 2,500 percent from 65 MB per month in 2014 to 1.6 GB per month in 2017. 

READ MORE: How Vending Machine is Reshaping the Retail and F&B Sector

App Annie forecasts that by 2022, India will have 37.2 billion downloads a year, a growth rate of 207 percent, making the country the fastest growing app market in the world. The success of apps like Swiggy, Zomato, Flipkart, and Amazon is a testament that the Indian consumer trusts payment via online apps and finds these apps more convenient than visiting a retailer store or a mall. Young, well-educated, and global millennials of today are short of time and believe in on the go consumption. This makes it the ideal time for the vending industry to find its feet and grow in the country.

And slowly but steadily one can see the growing popularity of automated vending machines in the country. Predominantly installed at railway stations, airports, colleges, and other educational institutions, petrol stations, malls, offices, and hospitals; the automated vending machine presents a lucrative option for market players to effectively cater to an existential latent demand. Today’s vending machines do not just accept cash but are contactless and digital payment friendly and are increasingly making their presence felt across the country.

While there has been a visible change in the status quo of vending machines in the country, what is it that makes these machines an enticing proposition for urban India?

The New Indian Consumer

As mentioned above, the lifestyle and consumption factors of Indian millennials are fast-paced. They require easy access to things and can afford to consume on the go. This is the reason behind the success of Quick commerce and 10-minute deliveries. However, while quick commerce maybe takes time to turn profitable, vending as a business is a perfect solution, which caters to all these demands.

Easier Cash Management

The second key change is in the mobile-based cashless payment technology which is being increasingly adopted by both existing as well as new vending operators. Today, using a mobile app, the consumers can make use of any of the multiple digital payment methods to instantly purchase goods for consumption. The requirement for cash is not there anymore solving the challenge both on the consumer as well as the vendor side. Moreover, with the new technology that is available for vending machines, cash management as well as tracking information about the machine’s inventory, health status, and usage can be done remotely by the operator taking away the hassle of regular upkeep. 

Overall, the vending industry has seen good pickup post-COVID-19 with consumers looking for touchless options with some of the leading FMCG and beverage brands looking to create new consumption touchpoints across public places as well as apartments and offices through automated vending machines. With several new and innovative players entering the industry eyeing the potential here, the day is not far when vending machines will be as popular as ATMs are today in India!
 

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