Go-Carting for groceries!
From a time where there was a laundry list of e-tailers in the online grocery space, we are down to relatively fewer but in-it-for-the-long-run players. How the e-grocery segment shapes up — to grow and consolidate — will redefine how India shops for groceries.
The Indian food and grocery market has been on a simmer for a while now. The recent go-ahead from the government for food retail in July turned up the heat allowing players to stock and sell food and groceries in India. Post the announcement, players in the space have dug their heels in to best leverage the opportunity. The space, now in its consolidation phase, is set to undergo transformation amidst changing purchase patterns from the consumer side when it comes to food and groceries. As per a study conducted by 6Wresearch, the Indian online grocery market is set to grow at a CAGR of 62% between 2016-2022. The segment, apart from the government approval, had demonetisation to thank for driving further traffic or attention in the very least towards itself. A survey conducted by CashKaro.com, shortly after the demonetisation move, indicated that over 50% consumers had switched to purchasing groceries online; cash-free transactions at 31% and better deals and discounts at 25% attracted consumers to shop groceries online. The benefit of convenience, the survey further said, ranked lower at 24% and flexible delivery time slots stood at 10%.
Currently the largest 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. Saurabh Srivastava, director, category management, FMCG, Amazon India says that the app has witnessed a positive uptake by customers in Bengaluru, prompting its expansion to Hyderabad, Delhi and Mumbai. “We service more than 80% pin codes across these cities,” Srivastava informs. Where AmazonNow provides daily solutions, Amazon Pantry comes to the customer’s rescue on a weekly and monthly basis. All Amazon Pantry orders are shipped in pantry boxes from the Amazon fulfilment centres located near cities to fulfil next day deliveries. Flipkart also recently launched a pilot project for its foray in the grocery segment. Hyperlocal players like BigBasket and Grofers have been in the grocery game for relatively longer.
While the target audience for BigBasket is a broad range from 25-70 years, Grofers primarily targets the 25-35 year-olds with its secondary audience segment being in the 35-45 year age group. Vipul Parekh, co-founder, CFO and CMO, BigBasket shares, “Our consumer base comprises households with an average annual income of minimum Rs 4 lakh per year. A majority of households are between 25-40 years of age and this group 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.” The average monthly purchase happens to the tune of about Rs 4,000-4,500 on BigBasket.