With wafer thin margins and complex supply-chain cycle, the online grocery industry witnessed various up & downs in the last few years. Many players entered the market but only few managed to stay alive, while others had to shut shop. Although, things are looking up now.
Online grocery will grow at a CAGR of 62%
A study carried out by 6Wresearch revealed that between 2016-2022, the online grocery market would grow at a CAGR (compounded annual growth rate) of 62%.
Avishrant Mani, Senior Research Analyst at 6Wresearch explained which factors have contributed to this significant growth, “Changing lifestyle coupled with long working hours has shifted purchasing trend from offline to online format. In India’s online grocery market, youth population is playing very significant role for these online grocery item purchases.”
Other findings of the research are:
- Bangalore is the major market for online grocery. Mumbai and Delhi come next
- Companies that follow hyperlocal model are growing faster than the ones with traditional model
BigBasket to touch $1 billion revenue by 2017-18
Online grocery leader BigBasket’s revenue is expected to cross $1 billion by the end of FY 2017-18. Its FY 2015 revenue is Rs. 210 crore.
Hari Menon, co-founder and CEO of BigBasket revealed, “We clocked a turnover of about Rs 210 crore in FY15, and hope to end the current fiscal with a turnover of around Rs 1,000 crore. The target is to have revenues of $1 billion by 2018 March, and be among the top three grocery players in the country including the offline players as well.”
BigBasket has presence in most of the tier-1 cities such as Bangalore, Mumbai, Hyderabad, Pune, and NCR. The company recently started operations in Gujarat and is looking to enter Kolkata soon. There’s no dearth of funds to accomplish the expansion goals as the company recently made $25 Million by selling a minority stake to IFC.
E-grocery is not only getting popular with the masses, but investors and ecommerce biggies too are showing great interest in this online segment.