However, Grofers and BigBasket may have to brace up for bruising competition as Walmart-controlled Flipkart is set to enter the space.
Grofers’ loss increased 73.44% year-on-year to Rs 448 crore in the year to March 2019. The Gurugram-based online grocer’s total expenses shot up to Rs 531.62 crore in FY19 compared to Rs 311.77 crore in FY18, a rise of 70.51%, according to the company’s RoC filings sourced from business intelligence platform Tofler.
Compared to the wide losses, the company’s revenue from operations stood at Rs 70.14 crore in FY19. Revenues, nonetheless grew by 135.13% y-o-y during the period. Revenue from operations stood at Rs 29.83 crore in FY18, the documents showed.
Grofers, which earlier was a pure hyperlocal and shifted to becoming an online grocer with an inventory-led model, is banking on its private labels in the fast moving consumer goods (FMCG) segment to drive its second phase of growth. The firm offers both premium and entry-level products across segments like food and beverages, personal care, household care, furniture and kitchen tools.
In May, the firm said it raised $200 million in Series-F funding led by Softbank Vision Fund (SVF). The company’s strategy will be to offer more of its own products, CEO Albinder Dhindsa had told FE. “We are working with more small businesses and manufacturers. We want to bring warehousing closer to where they are,” Dhindsa had said.
Grofers has so far raised close to $441.8 million in funding, according to data from Crunchbase. Last week, rival BigBakset’s retail unit, Innovative Retail Concepts, reported a 94.31% y-o-y increase in losses to Rs 348.27 crore in FY19. Revenue from operations of the entity grew 69% y-o-y to Rs 2,380.95 crore during the period.
India’s online grocery market is led by BigBasket and Grofers. Given that online grocery segment is still under penetrated, companies have opportunity to scale up, analysts said.
However, Grofers and BigBasket may have to brace up for bruising competition as Walmart-controlled Flipkart is set to enter the space. It has registered a new entity, Flipkart FarmerMart, to undertake retail trading of food products.
Flipkart’s war chest coupled with Walmart’s expertise in supply chain management and logistics could help it build on the business quickly, analysts said.