New players in the hottest ecommerce segment – online grocery, have managed to crack the code with on-demand delivery. While big ecommerce players scaled great heights in apparel and electronics category, grocery remained one such segment that in spite of the huge scope didn’t generate desired profits. However, the new entrants in e–grocery have upped their game by adopting on-demand delivery model and are giving tough competition to established players.
New entrants such a Grofers, Local Banya, Zopnow, PepperTap follow a business model where they source produce from local grocers and deliver to customers. It not only allows them to offer express delivery to customers, but also expand rapidly while saving time & money.
Co-founder of Grofer, Albinder Dhindsa said, “The experience of a customer buying a lot of groceries online is not that great. If we standardized (grocery sales), it would really disrupt the way local retail is done right now.” The success rate of this model has also helped these startups to raise crores of funds.
Shailendra Singh, Managing Director of Sequoia Capital India, which has invested in PepperTap and Grofers said, “The next generation of ecommerce is hyper-local mobile commerce for frequent-use cases such as groceries and food.”
According to Peter Guarraia, partner at consultancy firm Bain and Co, “On-demand delivery is going to be the next battlefield in competition. It is not like you can get a TV or a washing machine but for some critical things, same-day delivery is the way to go.” A strong supply chain and logistics division is a strong service differentiator in getting competitive advantage.
This is why on-demand delivery is going to be the ‘differentiator’ that will reshuffle the existing ecommerce company rankings.
Online marketplaces in regular retail segment can compete on discounts alone. But when it comes to grocery, quality, price, packaging, delivery and customer service together contribute to sales. This poses as a challenge to both, market leaders and new players. Speaking about the same, co-founder of Local Banya, Karan Mehrotra shared, “You have to set up the right kind of infrastructure for cold chain products and fresh produce, which are temperature-sensitive. You also have to get across enough range and rates to make sure you can deliver all the products to consumers,” ”
Top online grocer Big Basket receives 10,000 plus orders and is valued at INR 1,519 crore. Whereas, small players receive around 1000 orders and are valued less monetarily but have local customer database. All are losing somewhere and gaining elsewhere. So the way ahead can be strategic partnerships between regional and national players across online marketplaces, hypermarkets and e-grocery portals to gain loyal customers.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.