Not too long ago, online grocery retailers received the go-ahead for FDI in food retail. Not only has this made the segment bigger, it has also opened up avenues for players in terms of how they conduct business. In some cases, this will see a rejig in supply chain management; in others, it will be about improving processes and building their own private labels. Currently, e-commerce player Amazon has programmes such as AmazonNow, its app-only service intended to enable customers to access everyday essentials. To enhance customer experience and to highlight convenience, the platform launched services such as Subscribe and Save, Super Value Day and Amazon Pantry. Flipkart has also launched a pilot project for its foray in the grocery segment. Players like BigBasket and Grofers have been in the grocery game for relatively longer. While the target audience for BigBasket is an age group of 25-70 years, Grofers primarily targets a younger audience of 25-35 years. Vipul Parekh, co-founder, CFO and CMO,
BigBasket, shares, “Our consumer base comprises households with an average annual income of `4 lakh. Households with people below 40 years makes up for 40% of our customers. We are currently present in 25 cities, with 85% of the revenue coming in from the top 10 tier-I cities.” Prashant Verma, director, marketing, Grofers, shares an important insight that unlike other e-commerce categories where 75-80% purchases are done by men, online grocery is a market having an equal split between men and women. “Grocery is a space that allows us the chance to bring women onto the online space,” he says.
Bricks-and-mortar grocery players like BigBazaar and Reliance Retail are also present in the online space. Reliance Retail is also the order fulfilment partner for food and groceries for Grofers in 14 cities and BigBazaar is a partner store for AmazonNow in Hyderabad, Mumbai and Bengaluru. The top challenges for the online grocery category going forward would be to figure out the best delivery policies, returns policies and maintaining quality and hygiene in products being delivered. For a mass appeal, these players still have to compete with neighbourhood stores, which can offer credit, give a choice to pick the freshest items, and even allow returns.