The $1-billion online grocery space is all set for the big battle, with deep-pocketed players signalling expansion and strengthening of operations. It is not just Amazon; Walmart\u2019s recently-acquired 77% stake in Flipkart could lead to a larger focus on the food and grocery segment, currently led by Bigbasket with a 37-40% marketshare, followed by Amazon, Grofers and Flipkart. In fact, grocery is touted as the fastest growing segment within e-commerce. As per RedSeer Consulting, it is growing at a CAGR of 60-70% and is expected to touch $4-5 billion in 2020. Experts see Walmart becoming the biggest disruptor in this space and providing a big push to online grocery retail. \u201cWalmart is a global leader in grocery sales. Its online foray in the US is about to reach 40% of homes. Its strength in fresh grocery supply chain management will be the game-changer in the category,\u201d says N Chandramouli, CEO, TRA Research. \u201cApart from giving Amazon a run for its money in this area, Walmart will also hit retailers like Bigbasket and Grofers.\u201d But unlike categories such as fashion and electronics, grocery behaves a little differently. \u201cThere is no standard playbook for grocery. While the market is big enough to accommodate multiple players, it is a region-focused business and large retailers in every country are local,\u201d opines Vipul Parekh, co-founder, Bigbasket.com. \u201cA fair bit of promotions are possible in grocery and it is a myth that it is a low-margin category.\u201d Grocery is an attractive segment in terms of getting loyal customers. Also, the cost of acquiring customers and servicing them comes down over time as the customer lifecycle is high. Unlike e-commerce players that are looking at e-grocery to build customer stickiness, for large format retail players, online grocery is more about the omnichannel play. It is about acquiring new customers and moving existing customers online. But these advantages work only for those players who understand the local nature of the category, city-specific to be precise. \u201cThe predictability of demand at the city level is important in the segment. Unless you source it from the same city, it is not viable,\u201d says Sreedhar Prasad, partner and head, consumer markets and internet business, advisory, KPMG India. \u201cThe traditional marketplace model involving vendor aggregation does not work. It is important to control the supply chain, get the timing of the order right and focus on quality.\u201d This is where Bigbasket and Grofers stand to benefit. \u201cWe are able to offer a wide assortment under our private label; our logistics is built for grocery. We have built warehousing capabilities with facilities like temperature control and incorporated technology in such a way to ensure that products are delivered at the right time,\u201d says Parekh. According to Anil Kumar, CEO, RedSeer Consulting.com, there is a need to enter small cities and small income groups, which has not been addressed by current players and where Walmart experience is of importance. \u201cA significant innovation is required on product portfolio, supplychain and the way customers are being reached out currently. Here Walmart can help Flipkart,\u201d he adds.