Vending machines usage in india :

Vending continued to have a negligible presence in India for retail purchases in 2017.
Most of the vending machines operational in the country are used only for
institutional sales.

Vending machines in India are always accompanied by a helper, who takes the money
from the consumer and operates the machine. This is because the literacy rate in the
country is still low, which means that many consumers are still not able to operate the
machine properly.

The Indian government continued to maintain vending machines in metropolitan cities

such as Delhi, Mumbai and Bangalore.

Ever wondered how much potential the Vending Machine that gives you a steaming cup
of Coffee at the Railway Station every morning or evening holds? Well, We certainly
gave it some thought! The Vending Machine market in India has been around for more
than a decade and a half but has shown uninspired growth as such. The initial
rudimentary machines gradually gave way to more sophisticated and reliable setups but
the market as such failed to take off. However, off late, in the backdrop of the emergence
of the Indian progressive consumer and other favorable socio-economic undercurrents;
the market has begun to show great promise. Given the potential target consumer base
primed for consumption, sale of products through Vending Machines is touted to reach
$ 1 billion by the end of 2012. Estimates suggest that only 12 — 15 % of the entire market
has been tapped thus far. Furthermore, a majority of the revenues generated accrue
through the sale of hot beverages such as Tea and Coffee and Soft Drinks. This presents
Vending Machine manufacturers, operators and FMCG companies as such with a huge
opportunity to target a largely untapped market.

Automated Vending Machines in particular are becoming increasingly popular in the

Indian context. These compact setups that are generally 4 — 6 ft. in height, occupy an
area of 4 — 6 ft. These cost Rs.1, 40,000 — 10, 00,000; depending upon the level of
refrigeration and order customization. These are generally stocked with a relatively
diverse product range inclusive of packaged snacks, food items, candy, confectionary,
beverages, stationery and certain other high consumption FMCG items. 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.
So, what is it that makes these machines a hugely viable and enticing proposition? The
following are the merits of Vending Machines as efficient marketing channels —

– The Indian Consumer Factor: For starters, the emergence of the Indian
consumer driven by changing lifestyle and consumption patterns and the percolating
consumerism effect has created a burgeoning market and increased demand
– Greater Distribution: Manufacturers and companies alike benefit by utilizing
Vending Machines as an efficient distribution channel for their products by
appropriately locating them in spaces liable to see high footfall from the target
demographic
– Increased Market Penetration: At a fraction of the cost incurred, these machines
provide companies with the chance to penetrate new markets without the hassle of
hiring too much labor. These machines bring the company one step closer to the
eventual consumer; thereby, serving an intermediary role
– Enhanced Visibility: Companies willing to sell their products through Vending
Machines stand to gain from increased visibility in an already cluttered market. Hence,
the machines not only serve as a distribution unit but also serve as a display unit;
creating enhanced visibility and brand recognition
– Effective Advertisement Platform: In addition to just merely offering products
for sale, the machines also serve as an effective advertisement vehicle; thereby, aiding
companies to establish a more holistic interface with the consumers and ensure higher
brand recall in the long run
– Silent Salesman: Bereft of any human intervention whilst selling, the machines
negate the adverse implications of low productivity as a consequence of employee leave,
holiday or strikes. These machines function 24 hours a day, 365 days a year serving
customers
– Guaranteed Quality: Vending Machines store quality products in a quality, safe,
secure and hygienic environment. This also reduces the chances of adulteration and
duplication that can hurt the prospects and credibility of the company per se.

Now despite the many advantages that this avenue presents to multiple stakeholders;
the market is fraught with myriad challenges that have hindered its progress and may
continue to do so unless addressed at the earliest. Some of these developmental
impediments include —

– Availability of relatively cheap labor that fuels the proliferation and operations of
Stores and Canteens. These serve as indirect competition
– Lack of usage despite access to automated machines owing to absence of technical
knowhow, trust and other psycho-social variables
– Issues pertinent to currency recognition; prices of products within the country is such
that making payment through coins is inconvenient and unfeasible at times. A proper
currency recognition system which accepts and gives back currency in both notes and
coins is vital. Also, alternate payment channels via cards and mobiles could be explored
later
– Threat posed by vandalism and inconsiderate usage
– Lack of regular repair and maintenance and replenishment of these machines can
render them unfit for operation; thereby, undermining the entire Endeavour
Indubitable is the fact that the Vending Machine market in the country as well as other
emerging economies such as China, Mexico, Brazil and South Africa is poised for
significant growth in the years to come. However, the industry will be able to fulfill its
latent potential only if the aforementioned challenges are taken cognizance of. It will
come down to handling the Neo-Indian consumer transition from curiosity to
convenience to habit driven consumption through Vending Machines. What it boils
down to is whether the market players are able to leverage their core competencies with
a strong customer orientation and expand market coverage in the future.

A Vend in the Road is certainly here. We just have to tread on it productively now.