Asia-Pacific Economic Statistics Week Seminar Component Bangkok, 2 – 4 May 2016 Name of author Abhiman Das (Professor, IIM Ahmedabad) Pulak Ghosh (Professor, IIM Bangalore) Anirban Sanyal (Research Officer, Reserve Bank of India) Organization Indian Institute of Management (IIM) – Ahmedabad & Bangalore Reserve Bank of India Contact address Department of Statistics and Information Management Modelling and Forecasting Division C-8, 6th Floor, Bandra Kurla Complex, Bandra (E) Mumbai- 400051 Phone:022-26578700 Ext-7503 Mobile:- 08879239691 Contact phone (+91) 9820414476, (+91) 8879239691, (+91) 9742065806 Email [email protected][email protected][email protected]Title of Paper Monitoring consumer price trend using daily price data of online grocery stores in India Abstract Central banks and other policymakers monitor the trends in consumer price using different price indices. These indices are compiled by official agencies and are usually published at monthly frequency. However, the time lag of publishing the official data often creates bottleneck for policymaking as information on price situation remains unavailable at the time of framing policy decisions. In order to bridge the information gap, this paper proposed a methodology of tracking price momentum almost on real time basis using online grocery stores price data. Online grocery stores have been operationally successful in different advanced and emerging economies including India for a considerable period of time and have a large consumer base. Given the wide reach of such online groceries and their product coverage, we explore the information content of the daily pricing data from such online groceries in Indian context. We find concordance of price momentum between price quotations of e-retailers with the officially published data. We argue that such high frequency data can be effectively used for developing composite price indices which can track the price momentum in real time and can provide valuable policy inputs to policymakers.
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Asia-Pacific Economic Statistics Week Seminar Component ... · In India, the retail sector expanded significantly in recent times. India’s retail sector was ranked 5 in 2012 as
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Name of author Abhiman Das (Professor, IIM Ahmedabad) Pulak Ghosh (Professor, IIM Bangalore) Anirban Sanyal (Research Officer, Reserve Bank of India) Organization Indian Institute of Management (IIM) – Ahmedabad & Bangalore Reserve Bank of India Contact address Department of Statistics and Information Management Modelling and Forecasting Division C-8, 6th Floor, Bandra Kurla Complex, Bandra (E) Mumbai- 400051 Phone:022-26578700 Ext-7503 Mobile:- 08879239691 Contact phone (+91) 9820414476, (+91) 8879239691, (+91) 9742065806 Email [email protected][email protected][email protected]
Title of Paper
Monitoring consumer price trend using daily price data of online grocery stores in India
Abstract
Central banks and other policymakers monitor the trends in consumer price using different price indices. These indices are compiled by official agencies and are usually published at monthly frequency. However, the time lag of publishing the official data often creates bottleneck for policymaking as information on price situation remains unavailable at the time of framing policy decisions. In order to bridge the information gap, this paper proposed a methodology of tracking price momentum almost on real time basis using online grocery stores price data. Online grocery stores have been operationally successful in different advanced and emerging economies including India for a considerable period of time and have a large consumer base. Given the wide reach of such online groceries and their product coverage, we explore the information content of the daily pricing data from such online groceries in Indian context. We find concordance of price momentum between price quotations of e-retailers with the officially published data. We argue that such high frequency data can be effectively used for developing composite price indices which can track the price momentum in real time and can provide valuable policy inputs to policymakers.
I. Contents .............................................................................................................................................. 2
I. Introduction .......................................................................................................................................... 3
II. Literature Review ............................................................................................................................... 5
III. Approach and data used ............................................................................................................... 6
1. Step 1: Data cleansing and transformation ................................................................................ 7
peaking up since 2011 but the market size remains small compared to others2. In India, the
retail sector expanded significantly in recent times. India’s retail sector was ranked 5 in 2012
as per the Global Retail Development Index (GRDI) of At Kearney. Online purchases has
also becoming part of this success story in India where sales growth of online retails of food
items increased by 80% during January to March of 20133. Since 2011, the popularity of
online grocery stores in India started peaking up when two of the major online stores namely
Bigbasket and Zopnow started their operation. In recent times, 6 major online players rule
the online grocery market in India. According to Mr. Hari Menon, Co-founder of Bigbasket,
the changes in consumer behaviour is helping these online retailers to increase their
business operations. Though these online grocery stores experienced significant impulses in
terms of increasing business operations, the spatial coverage of these retailers majorly
confined to major metro cities. Also the commodities offered through these online grocery
portals is limited to food and beverage items compared to the usual CPI item basket.
India adopted inflation targeting monetary policy in 2015 and consumer inflation was
selected as the official target of inflation. Eventually the consumer price inflation is derived
from CPI Combined index released at monthly frequency by Central Statistical Office with a
lag of 11-12 days. Food and fuel items having weight of around 58% remains one of the
major drivers of the consumer inflation. The easing price impact of fuel inflation was offset by
food inflation in recent times. Though fuel inflation moves in tandem with global crude price,
the food inflation is driven by primarily supply shocks. In such a situation, the real time
tracking of food prices acts as early warning system for detecting any unfavorable movement
in one of the major drivers of consumer inflation. With this background, this paper extends
the real time price monitoring approach for primarily food items to Indian context using online
groceries data obtained from one of the largest online grocery store of India. This paper
contributes to the increasing literature of Big Data Analysis by incorporating real time
tracking of price of food items using online grocery data in Indian context. Such exercise,
though carried out across countries, have not been addressed in emerging market
economies to a great extent and first of its kind in Indian context. The paper also addresses
one of the major policy imperatives in terms of real time tracking of food inflation which may
be used to detect any inflationary situation for consumer price inflation contributed by food
items. The rest of the paper is structured as follows – Section 2 covers the literature review
followed by approach and data used in Section 3. The empirical findings are illustrated in
Section 4 and conclusion follows in Section 5.
2 “The retailer” – EY (http://www.ey.com/Publication/vwLUAssets/EY-the-retailer-july-september-2015/$FILE/EY-the-retailer-july-september-2015.pdf) 3 Source: https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/BBG-Retail.pdf