Smart Vending Machines – What lies ahead for India?

Smart Vending Machines – What lies ahead for India?

Smart Vending Machines- what are the growth factors.

The Smart vending machines business in India is expected to experience robust growth in the next five years. The key drivers contributing to this growth are the growing retail industry and urbanization. 

The traditional formats of the Indian retail industry have been transforming from neighbourhood Kirana stores into organized modern retail formats such as shopping malls, supermarkets, hypermarkets, and convenience stores. 

Vending machines were first introduced at airports by the government of India to provide convenience to traveler to procure essential products even during closed hours. 

Smart Vending Machine-Vendify

At the current juncture, vending machines are majorly used at airports, educational institutions, railway stations, offices, hospitals, petrol stations, malls, supermarkets, and hypermarkets. With the onset of the COVID-19, the demand decreased during 2020, due to lockdowns and low public footfall in commercial and public transportation areas frequented by daily commuters such as metro stations.

The most common practical application of smart vending machines visible in India Inc. is simple beverage vending machines that distribute hot beverages such as tea, coffee, and select soups. The consumers do not have to pay for the serving as it is provided by their company. 

This elementary application of smart vending machines helps the companies to serve these beverages without having to involve any human assistance as it is self-service. The benefits to the management are savings of precious time and money because there is the instant gratification of the customers. 

As more and more organizations are changing their work habits and inculcating a culture of performance and productivity where workers have to prove their productivity levels at their respective workstations, preventing them from strolling out for the occasional snack.

In a small country like Japan, there are more than 5 million smart vending machines, which is like 1 machine for every 23 people. But in a huge market such as India, the presence and growth of vending machines have been negligible for retail purchases.

The majority of the smart vending machines operating in the country are being used for institutional sales purpose only. Therefore, it is a no-brainer that the vending industry has a long trajectory to cover to attain the levels that we read above about Japan. It is estimated that the vending industry is expected to have a substantial cagr of approximately 14.9% in the next five years. The market potential is more than $1Bn.

The F&B vending market is still at a nascent stage in the country. The key growth drivers that will fuel the growth of the industry are rising population, growing digitization, mobile-based cashless payment options increasing investment in the retail sector, raising awareness, and increasing consumers’ purchasing power. The additional demand for vending machines will be primarily driven by the growth of organized retailing across malls and multiplexes, BPOs, IT, and ITES sectors.

Approximately 88% of the current potential market In India is categorized into beverages, snacks, chocolates and candies, tobacco, etc. The underlying factor behind the dominant presence of this category is due to modern-day Indian consumers’ busy lifestyles and fringe benefits approach. 

Segmenting the industry based on end-users, the prominent ones are QSR, shopping malls, & retail stores, offices, institutions, public transport, etc. Put together the shopping malls and retail stores were leading the overall vending machine market sales in India in the pre-covid era.

Another sector that will complement the growth curve is healthcare. Hospital chains, pharmacy chains in the post-covid environment following the norms for social distancing and safe transactions.

The Future Trends Of “New Normal”

The Future of New Normal Retail

The unlawfully forced disruption caused by COVID-19 has made us realize some very painful and harsh realities. It has also made businesses realize that nothing is permanent in this world and continuous improvements and innovations are pertinent for pivoting when the need arises such as the current pandemic. Let’s further explore them in more detail

Technology is omnipresent and advancing at warp speed. Vending industry cannot remain untouched or unaffected by the innovation in Automation and “Micro-Markets”. Micro markets are becoming more and more popular, and the days of basic candy or beverage machines are over. The modern-day technology savvy and informed consumers want machines that are advanced and provide more services efficiently. 

Integration of IoT into Smart Vending Machines

IoT lends flexibility to the manufacturers, service providers to improve their offerings for the end-users with granular insights into optimizing the inventory and thus helping them reduce expenses and improving customer satisfaction and experience.

For example – Plug-and-play smart button devices that attach to machines, enabling individuals to contact facility management instantly.

Cashless Payments

With the current situation, convenience and safety are of prime consideration for both the service providers and the consumers. Also with the penetration of Smartphones and innovative Fintech solutions, digital payments are an in-thing. In the EU “Plastic” is always the first mode of payment and acceptance. We have also seen the growth of PayTM and PhonePe since 2016. VendifyTM solution is integrated to accept UPI and wallet payments. 

Healthier Options

Eating healthy and staying healthy is the new mantra in a world where stress levels and lifestyle diseases are creating havoc. Veganism, Vegetarian, and Gluten-free diets are helping people fight obesity, sugar, and hypertension. (The gluten-free industry alone is expected to reach 4.6 billion this year.) 

Myriad of Choices

In an increasingly health-conscious world, the nature of snacking is also evolving. The demand for low sugar drinks, low-calorie snacks, freshly cooked food (Daalchini is an example of such a solution). With such original products and services hitting the vending industry recently, it will be exciting to see what other innovations extend choice even further this year. 

Reverse Vending

Humans are not the best evolution to have happened on this planet. Globally every year 381 million tonnes of plastic waste is produced and it is expected that by 2034 the number will double. Out of that 50% of it will be single-use plastic. This has led to the introduction of RVM (Reverse Vending Machines). Globally there are more than 200000 such machines. A reverse smart vending machine allows users to dispose of single-use beverage bottles specially made of plastic and in return get rewards. Coca-Cola India has started such an initiative.

Service and Personalization

India is home to the biggest share of the young population across the globe. More than 50% of its population is below the age of 25 and more than 65% of its population is below the age of 35. With more than 440 million smartphone users in India, it is the second-largest in the world. And this generation of savvy users is fickle-minded, fringe benefits-oriented, and demands good customer service, otherwise, their loyalties are up for sale. 

This is a challenging and daunting task for the vendors to start providing customizable options to their customers. With the combination of AI and ML machines become more advanced, their ability to identify and even “recognizing” customers will improve. Eventually, a customer might be able to walk up to a vending machine and have it automatically start crafting their usual morning coffee. In the future, machines may even be able to use cameras and profiling technology to attempt to reach their target demographics.

Deep tech Solutions For Smart Vending Machine Operations

Every automated vending machine operator looks for complete control of all the machines in his network, wants optimal operations and maximum profits. This entails highly advanced systems that allow remote monitoring and management of the machines, seamless integration of telemetry, cashless payments, business analytics, and of course managing the advertisements running on the display. VendifyTM has developed such solutions for multiple smart vending machine operations at scale. 

Shift In Consumer Behavior

According to industry experts, there will be increased expenditure on essentials such as grocery, medicine, food instead of discretionary spending. Consumers will like to order food in a safe and secure manner instead of going to restaurants or hotels. Online shopping is set to see double-digit growth and the trend will be more towards O+O (Online+Offline).

Unmanned Retail

An unmanned store is a retail concept where there is no service personnel and no cashiers in the store. A physical wallet is not required at all to carry the transactions. VendifyTM has already developed such a solution to operate a “Micro Market”.

As we discussed the shift in consumer behavior earlier due to COVID-19 the new normal is minimal contact in retail commercial transactions, the integrated approach of online and offline will see significant growth. Another concept that is gaining traction is unmanned retail. The successful business use case is “Amazon Go” in the United States. Unmanned Stores/ Automated Convenience Store are Non-existent in India as of now but it is just a matter of time when the same success is replicated in India.

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Revamp of Neighborhood Local Stores

Earlier lockdown reinforced the significance of convenience and Kirana stores in localities and their importance is significant enough in a country like India because of discreet purchases, instant gratification, and existing relationships. The critical factors that will come into play are:

  • Social Distancing —

            Social distancing encourages digitally connected lifestyles without any involvement of human touch. Savvy and socially responsible consumers will prefer alternatives that will avoid close contact with fellow shoppers. Customers will endorse shopping destinations that provide minimal touchpoints hence stores augmented with Smart Vending Machines will surely have an edge.

  • Focus on Hygiene — 

           We have already observed above that the world is turning towards hygiene and a healthy lifestyle. Five years back India was not at all empathetic towards such lifestyles but in metros, the growth of ultra-modern gymnasiums, increase in brands offering organic food products and lifestyle clinics are indicators of a health-conscious Indian. So Smart vending machines can surely complement such a demand.

          The rise of E-commerce does not change the reality that many Indian consumers still love to have a physical retailing experience to be assured that they are getting what they wanted. As technology invades more and more into the Indian households, the day is not far when Phygital experience will not be a luxury anymore.

wrapping up the smart Vending machine business

Gone are the days when a consumer had to check their pockets for tendering the exact change to feed into a vending machine. We are on the cusp of an era where vending machines are not dumb anymore. They can take credit, integrated chip cards, and even mobile payments, offer environmentally-friendly and health-conscious choices, allow customers to customize their selections, and carry a lower risk of card spoofing. In some cases, they may not even be machines at all—they could be entire grocery stores. These trends are a strong indicator of the kind of clientele that retailers will have to work to cater to in 2021 and beyond.
VendifyTM is future-ready with such solutions. Are you keen o know more, then write to us at

This Post Has One Comment

  1. Ram Mittal

    Great Article!!

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