Online Grocery Startups War To Acquire First Time User

Hyperlocal Delivery Startups – Survival Of The Fittest

Online Grocery Shopping How Grocery Ecommerce Is Giving Tough Time To Offline Players And Going To Be The Next Big Thing In India

Living alone, away from family, is a tough task. Add to that the myriad everyday domestic hassles one has to take care of, tiring 12 hour shifts in the office and transportation woes that leave you feeling so drained that the prospect of cooking seems like torture. In such a scenario, who would want to shop for grocery? Certainly not the young Indian professionals!

As the popular saying goes – “Everyone loves to eat, but no one likes to clean the dishes.” Urban India however is putting an interesting spin on this phrase where it now reads– “Everyone loves to eat, but no one likes to shop for groceries.”

Thankfully online grocery shopping portals have come as a God-sent aid, allowing them to have their grocery needs fulfilled within a couple of hours replete with doorstep delivery. While presently the number of daily transactions lies within a range of about 25-30, it can soon be expected to rise to about 5 lakh transactions over the next 12 months.

Quick Facts About Indian Grocery Market 

The retail market in India is expected to hit $725 Bn (about INR 43 lakh crore) by 2017. Retail consultancy Technopak estimates online grocery business to grow at a rate of 25-30 per cent y-o-y basis in major cities of India.

 India is the 6th largest grocery market in the world

• Only 5-8% of grocery stores are organized corporations. The vast majority are “mom & pop” type shops that are similar to convenience stores in the US and are referred to as “kiranas”
•  The online grocery market is growing at 25-30% annually in metropolitan areas and large cities
•  Margins are below 10%
•  43% of the country’s roads are not suitable for vehicles. Paired with checkpoints, and duty collection points that slow down traffic, infrastructure is an obstacle

Here’s a brief comparison between few of the best players in the market:

1. Zopnow: A hyperlocal grocery delivery startup.
2. PepperTap: A mobile-first hyperlocal grocery delivery services startup.
3. Grofers: An on-demand delivery startup.
4. BigBasket: A formally registered with the name of Innovative Retail Concepts Private Limited and deals in grocery and online food.

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To attract more customers, online stores keep offering discounts, rewards and loyalty points. Some of the portals offer daily deals with discounts on specific products whereas some offer bundle packages to entice buyers. Some stores also offers loyalty points on purchases that can be later used as currency for more purchases. Like any ecommerce site, you also get the option to apply discount vouchers coupons for additional savings. 

In today’s times, success in this segment is gauged by the company’s performance in metropolitan cities. Here are few advantages and disadvantages of online grocery shopping:

Advantages:

1. Time saver: If you’re pressed for time, visiting a grocery store is not an ideal chore. Going with a grocery delivery service means you never have to set foot in a store, leaving you more time to work, enjoy your family, and even take a few minutes for yourself.
2. Reduces impulse buys: Whether it’s a gossip rag set up in the checkout aisle or a sale item hanging out on an end-cap, impulse buys can easily damage even the most bulletproof grocery budget. But by using a delivery service, you can make your choices efficiently, without being tempted by the items you buy because you’re bored or hungry. This includes junk food – when shopping online for your delivery service, you can avoid the shelves of cookies and chips, helping you keep the unhealthy stuff out of your home.
3. Online specials/deals are available: By shopping online, you can score great deals with online specials that store shoppers can’t get. The best part is that instead of driving down to snag sale items at various supermarkets, it only takes a single click of a button to take advantage of the best online deals.

Disadvantages:

1. It can be expensive: Buying groceries online is super convenient, but you pay a premium price for that benefit. Sometimes items are simply priced higher via a delivery service than at a supermarket, and without the ability to compare prices or search for bargains, you might be stuck with a high price.
2. Products can’t be handpicked: When you walk down a store, you are likely to search for the ripest, best-looking fruits and vegetables. When you purchase groceries online, you have to trust another shopper to select items for you. While most services guarantee freshness, you might be less than impressed when the food is delivered.
3. Delivery time could be frustrating: Some services take 24 hours to deliver the items ordered while some take 3 hours but in both cases the delivery time is more if compared to you getting the grocery by yourself.
4. After all this, you still may have to visit the supermarket: If you only use delivery services instead of your regular weekly or bi-weekly trip to the supermarket, you may find that you still end up needing to make trips to the store for perishables, such as milk and bread.

There is no online grocery service that works pan India. Each service only caters to a select number of states (which mainly includes larger cities). This will obviously frustrate potential users from the smaller cities. This is how fragmented and unorganized online grocery is. The plus side of which is that there is ample of space for innovations and fresh players. No wonder why in the last 4 years this sector has evolved.

The market is growing 25-30% annually in major cities. Groceries have always been region/locality specific, especially fresh produce or the ones with shorter shelf life. The idea of online grocery shopping is still popular only in urban cities.