Online grocery still has potential, but needs more attention

Editor | Sep 10, 2020

What can help online grocery stores click (and make money)?

Shopping for groceries and daily needs online is a lot more convenient for householders. While things have changed from local kirana stores to branded hypermarkets like More and Reliance Fresh, there seems to be a back pedalling of sorts with the branded stores. Self service and several floors of greater choice at hypermarkets have spoiled shoppers. However, the fact remains that most hypermarkets are unable to attain profitability, and are either being taken over by others, or simply being shut down.

In this scenario, online grocery stores have great potential. There are quite a few players in the market, including Amazon’s Kirana Now, Big Basket, among others. A recent 6Wresearch study showed that the online grocery industry has great scope for growth. The figures showed that between 2016 and 2022, the industry is expected to grow at a CAGR of 62%.

The study also observed that Tier 1 and 2 cities like Bangalore, Delhi and Mumbai are the hottest markets.

Cause for concern

Things have not been all dreamy and rosy for online grocery stores. The recent past has witnessed either closure or limiting geographical activity. The issue is not the lack of demand, but the fact that the players are unable to manage the complexity of the industry.

K Radhakrishnan, the founder of Grocermax.com, feels that the online grocery industry has the potential to take over the online selling sphere. He opines that the industry ought to tailor its functioning to suit the demand, in order to succeed.

“Grocery can be, for all these reasons, the heir apparent of the online space. It requires the competence and passion of an experienced team and the belief and support of the early investor,” he says.

This being the case, online grocery stores need not be disheartened by the lack of tempo. A thorough study of selling perishables online and getting experts on board will go a long way in picking up the pace.


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