SoftBank-backed online grocery Grofers claims it is currently clocking revenues of Rs 150 crore per month but incurs losses in the region of Rs 12 crore.
SoftBank-backed online grocery Grofers claims it is currently clocking revenues of Rs 150 crore per month but incurs losses in the region of Rs 12 crore.“The number of orders has increased tremendously in the last one year. Also, an efficient delivery mechanism has brought down the cost per delivery by 40%, which has further helped control losses,” Albinder Singh Dhindsa, co-founder and CEO, Grofers, told FE. In FY18, the company’s revenue stood at Rs 720 crore. Dhindsa, however, declined to reveal the losses. Grofers India’s losses increased 19.2% in FY17 at Rs 268.3 crore, according to filings with Registrar of Companies (RoC). The online firm’s revenue from operations during the year increased 65% at Rs 13.2 crore.
Dhindsa further added that it is the huge jump in number of orders that has led to the growth in revenue. Grofers has posted a 167% increase in daily orders at 40,000 against 15,000 during the same period last year, while the order value remains the same at about Rs 1,500. “We are targeting revenues of Rs 2,500 crore by FY19 and much of the growth will be driven by an increase in sales of private labels,” he said.
Of the total stock keeping units (SKU) which ranges between 2,500 and 3,000 – about 900 are its own products. The company sells these products under its brand name — Grofers. It offers a range of products starting from flour, pulses to cleaners, among others.
“Private labels contribute 40% of our sales. Another 10% of sales come from white labels — these are lesser known brands manufactured locally. The aim is to push the sales of private labels in order to earn higher revenue,” Dhindsa said.
Grofers, which currently has 6.50 lakh customers shopping on the platform, claims to be adding between 70,000-80,000 customers per month. It currently provides service in 13 cities and counts Delhi, Mumbai and Bengaluru as its biggest markets. The company no longer uses two-wheelers to deliver products on the same day, instead 700 delivery boys use vans to deliver products the following day. The online grocery firm, which raised $61.6 million lead by SoftBank Group in March this year, is currently valued at $300 million with the Japanese investor holding 35% equity in the company, followed by Tiger Global at 23%.