Groceries sell irrespective of the state of the economy. You can stop going to the cinema and restaurants, but there’s no way you can live without toothpaste, soap and, well, vegetables. When it comes to groceries, the battle’s not just between offline and online.
Online Grocery Retail
Break up the former into the friendly-neighborhood kirana stores, which are still holding their own, and the more recent phenomenon of modern retail, manifested by sprawling hypermarkets and supermarkets. The digital banyas are of two types, too: the ecommerce players who stock up food and beverages and deliver them to your doorstep; and then there are the rash of well-funded hyperlocal ventures, which pick up groceries from a clutch of stores in the neighborhood and rely on hired feet-on-the-street to bring your order home.
- Tough Business
Online grocery services, as analysts will tell you, is perhaps the toughest part of the ecommerce market to crack. Even in a digitally savvy market like the United States, less than 1 per cent of food and beverage sales took place online, according to estimates by Business Insider Intelligence early in the year — this in an F&B market valued at $600 billion a year, and despite the likes of Amazon investing heavily in delivery infrastructure.
- Growth of online grocery
India’s organised retailing is only 10 per cent of the total market opportunity, and within this large pie, organised food retailing is only $9 billion in size. Indian online grocery market is set to hit Rs 2.7 billion mark by FY’2019 following the surge in number of players operating in the industry, says a report. Future growth of online grocery industry is expected to be led by operations in smart cities and saturation in metropolitan cities, says Ken Research in its report.
Shutting down the business
- Leading cab aggregator Ola, which was running a hyperlocal grocery delivery service in cities like Bangalore, Gurgaon and Hyderabad, pulled the shutter on the service.
- India’s largest e-tailer Flipkart has shut its on-demand grocery delivery service Nearby, which it was piloting in Bengaluru, weeks after global rival Amazon fully rolled out its own version of the service Amazon Now in the city.
- Alibaba backed Paytm too, silently pulled off its grocery app Paytm Zip from App stores within three months of its launch in 2015.
- On-demand grocery major PepperTap has shut down its operations. The Gurgaon-based company had roll back its consumer centric grocery app by end of April 2016.
- Softbank-backed Grofers also backed out from nine cities in January this year to conserve cash and keep tab on burn rate.
- Ekstop and atmydoorsteps are some of the other firms that have closed.