IIM team wants Flipkart, Amazon to set up virtual grocery stores at Kolkata Metro stations

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If a plan made by IIM Calcutta is implemented, then Kolkata Metro might soon become the first one to have virtual grocery stores from e-commerce majors like Flipkart or Amazon inside its premises.

A team of students from the Indian Institute of Management (IIM), Calcutta, has chalked out a revival plan for the loss-making Kolkata Metro in which they have suggested that e-commerce majors like Flipkart or Amazon should be roped in to start first of its kind virtual grocery stores on station walls.

To find out innovative solutions for increasing its non-fare revenue, Kolkata Metro Rail Corporation (KMRC) had commissioned IIM-C to restructure its revenue model. A team of 3 MBA students, Alan Shaji Idicula, Urjaswit Lal and Tushar Kumar, came up with the unique idea of installing wall-length billboards designed to look like a series of supermarket shelves.

“We are trying to implement it. The idea is to increase our non-fare revenue so that there is no burden on passengers. We are trying to utilise our space in the best possible manner,” Kolkata Metro spokesperson Indrani Banerjee told Livemint without divulging whether they have initiated talks with any e-commerce company.

A bulk, or 90%, of the revenue of Kolkata Metro comes from train fares, which have not been increased since 2013. Over the years, KMRC losses have been widening and now it spends around Rs 2.68 for every rupee earned.

IIM-C alumnus Alan Shaji Idicula said their proposal is to bring Flipkart/Amazon on board and start India’s first virtual grocery stores on Metro walls. “The digital billboards will display product images along with the QR code. Passengers can scan the code to order daily-use products like groceries and FMCG items,” he said. The concept marries the two distinct models of traditional brick and mortar shops and e-commerce.

“The e-commerce company would have to tie up with local stores to deliver the products in a few hours,” Alan says, adding that such virtual stores are gaining attention in stations of Japan.

Around 20 teams of IIM students studied different metro stations to find additional sources of revenue after which Alan’s team was selected as the winner by KMRC.

The revenue model also includes:

1. Leasing out unutilised space at metro stations. The team calculated that around 68,478 sq ft of space is lying unutilised at 20 Metro stations in Kolkata. This space can be leased out for commercial activities.

2. Earning revenue through train wrap ads, hoardings and digital kiosks.

3. Paid wi-fi services inside Metro trains.

The IIM-C team calculated that KMRC can easily earn an additional revenue of Rs 20 crore just by leasing and renting out unutilised spaces for shops and advertisements.