2016 Food Trends: Online Grocery Shopping And Delivery

By RimTim Staff Writer
June 11, 2016
Online grocery

Online grocery shopping has been around in India for a few years now, but it was when the online grocery store Bigbasket.com signed up Bollywood superstar Shah Rukh Khan as brand ambassador that people first began to take notice. So far, only a chosen few used to do online grocery shopping, but the last 6 to 12 months have seen many transformational changes in the industry.

Online grocery stores in India

ZopNow.com, Omart.in, AaramShop.com, BigBasket.com, EkStop.com, AtMyDoorSteps.com, MyGrahak.com, LocalBanya.com and SeaToHome.com are just a few of the many online grocery stores in India. Even major companies such as Godrej Industries have jumped into the fray. Godrej’s NaturesBasket.com is quite popular in metros such as Mumbai and New Delhi. AaramShop.com currently operates in 30 Indian cities with more than 3,000 partner retailers.

What has been fueling the rise of online grocery shopping in India is the increasing internet connectivity and the huge growth in the popularity of online shopping. Flipkart, Snapdeal and Amazon are household names in India. The success of these sites have encouraged more people to shop online, and even buy groceries online – something which would have been unthinkable in India only a couple of years ago.

Online grocery stores – a great business

Kishore Ganji, CEO of a Hyderabad-based online grocer, Zip.in, explains why online grocery stores are such an exciting idea “For the last two years we have seen the Indian consumer adapting to e-commerce and slowly we see that trend continuing into the grocery segment also. Since food retail is such a large market, we think online grocery will eventually be the largest segment of e-commerce. But this segment will also be the most challenging segment to grow and scale across cities considering logistical and quality issues.”

What makes online groceries such a great business is that groceries sell, regardless of the state of the economy. Now, you can stop eating out, watching movies or going to the mall. You can decide against buying the latest smartphones and LED TVs. But you cannot survive without buying soap, toothpaste, wheat flour, rice, fruits and vegetables on a regular basis.

Benefits of online grocery stores for customers

It makes sense to shop for groceries online because it saves customers from having to commute to the nearest supermarket and avoid the hassle to search for parking space. Instead customers can order groceries online and have then delivered to them within 12 to 24 hours. This saves time and money too, as many online grocery stores offer excellent discounts on purchases over Rs. 1000. The payments can be made safely by credit card or debit card through a secure online payment gateway.

Customers can also avoid the shopping crowds through online order. Another benefit added is people can order anytime sitting at home or from office. Online grocery stores also reduces unnecessary spending as you are less likely to overspend than visiting a physical grocery store.

Online shopping

Drawbacks of online grocery stores for customers and entrepreneurs

Customers always may not get what they have ordered. Sometimes they need to compromise with the quality or freshness of the products, they may not be of high standard. You cannot personally look at the items you want to buy. For few online shopping sites, deliveries may sometimes be expensive or delayed than promised.

For the entrepreneurs who run online groceries, it’s not easy. Buying a domain and web hosting and setting up a website is the easy part; that doesn’t cost more than Rs. 5000 to Rs. 10,000 per month. What is hard is creating a physical infrastructure to store the inventory and to create an effective system for fast delivery. That is why not everyone can start an e-grocery; it does require a great deal of commitment and entrepreneurial chutzpah.

Online grocery stores and orders

What drives online grocery stores on are repeat customers. A high percentage of the orders made at online stores – close to 90% come from regular customers, mentions Solomon of SeaToHome.com. So the trick for online groceries is to impress customers the first time they shop at the store. Most customers repeat orders every 7 to 14 days, as it doesn’t take long for groceries to run out. That is just one of the many reasons why setting up a grocery store online is such an attractive business. Another interesting fact is that a majority of the orders are made on weekends, according to the CEO of SeaToHome.com, Priya Solomon: On weekends, we do far more business than other days. We average 40-50 orders on weekdays.

While there are a few online grocery stores that operate in all major cities in India, a vast majority operate within a specific city and within certain areas only because of logistic constraints. It is certainly not possible for e-grocers to deliver, say, a bag of rice to shoppers to a place where they do not already have a physical infrastructure in place.

So the offline operations are just as important as the online business for many grocery stores. It is only stores with a robust offline component that are able to succeed in India. Many e-grocers also accept orders by phone, which is actually a very popular way of ordering groceries in India.

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