E-Grocers sharpen their game to cash in - Hindustan Times
close_game
close_game

E-Grocers sharpen their game to cash in

Hindustan Times | By
Dec 30, 2016 08:14 PM IST

With the government’s push for a less-cash economy and digital payments, online merchants are looking to cash in on changing purchasing patterns as more Indians have begun shopping online over the last seven weeks.

With the government’s push for a less-cash economy and digital payments, online merchants are looking to cash in on changing purchasing patterns as more Indians have begun shopping online over the last seven weeks.

With the government’s push for a less-cash economy and digital payments, online merchants are looking to cash in on changing purchasing patterns as more Indians have begun shopping online over the last seven weeks.(Livemint)
With the government’s push for a less-cash economy and digital payments, online merchants are looking to cash in on changing purchasing patterns as more Indians have begun shopping online over the last seven weeks.(Livemint)

One segment that is tweaking strategies and looking to cash in is e-grocers, who have hitherto been a victim of the online conservatism of the Indian buyer.

Hindustan Times - your fastest source for breaking news! Read now.

Consider this: Amazon India has expanded its e-grocery segment, Amazon Pantry, to six more cities. Grofers, which had closed operations in nine cities in January 2016, has increased capacity by almost 40% in Delhi-NCR alone post demonetisation, and re-opened Ludhiana. It plans to add three more cities within this quarter.

Key to success in the grocery game is delivery speed.

Albinder Dhindsa, co-founder and CEO of Grofers, said express delivery was not profitable. The firm‘s ticket size for standard delivery is 1,100 and for express delivery 700. With cost of delivery being too high, Grofers has “partnered with local retailers for same-day delivery of products, which makes it profitable for us,” Dhindsa said.

Market leader BigBasket, on the other hand, doesn’t partner local retail partners, and has mini-warehouses.

Global leader Amazon too has an express two-hour delivery service, Amazon Now, for daily household needs. Its e-grocery segment, Amazon Pantry, has next-day delivery at competitive prices.

Vipul Parekh, co-founder of BigBasket, said customers buy a high percentage of fruits and vegetables and private labels like ready-to-eats on express orders. “These two categories are high margin categories which see an overall contribution of 45% to our express orders,” he said.

According to RedSeer Consulting, an advisory firm that tracks internet businesses, hyperlocal grocery saw 30% to 40% increase in transaction volumes, post-demonetisation.

“In hyperlocal groceries, essentially the supplier and customers are in the same vicinity and a typical average order delivery distance is between five to 10 kilometers,” said Gagan Chauhan, senior business analyst at RedSeer Consulting.

A survey by Cashback and Coupons site Cashkaro show that compared to last year, 75% have started shopping for daily items/groceries more online now.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Rozelle was part of Hindustan Times’ nationwide network of correspondents that brings news, analysis and information to its readers.She no longer works with the Hindustan Times.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On