The online grocery space is set to see a lot of action as the country’s top two online grocery start-ups BigBasket and Grofers have started the new year with big bang sales that are expected to rope in a million new customers from over 25 cities into shopping for groceries online, for the first time.
BigBasket, the country’s largest online supermarket, flagged off its quarterly ‘Big 47 sale’ on January 3 and it will run till January 16. The sale is expected to bring in a 20 per cent increase in customers. Currently, BigBasket has 1.5 million customers shopping on its platform every month. Shoppers across the 26 cities that it operates in got 47 per cent off on over 2,000 top products during the 14-day sale on a minimum order value of ₹1,500.
“The aim of the ‘Big 47 sale’, which offers an online supermarket experience to shoppers, is to attract new customers and offer them myriad options across categories ranging from organic dals, fresh fruits and vegetables, meats, juices, spices and tea to toiletries, kitchen essentials, electronics such as LED bulbs and baby products, to name a few.
The sale will be followed by another general merchandise sale from January 17-26, largely comprising of home and kitchen items that are popular at this time of the year, said Pooja Ravishankar, Head of Category Marketing, BigBasket.
Grofers’ Grand Orange Bag Days
Grofers expects to draw 10 lakh new customers during the third edition of its flagship ‘Grand Orange Bag Days’ (GOBD), which kicks off on January 18 and ends on January 26, and will be live across the 27 cities that it operates in. The 9-day sale offers a ‘100% Guaranteed Inaam’ or gift to every shopper where new users are required to shop for a minimum of ₹1,000, while existing users would need to make a minimum purchase of ₹1,500. Grofers promises over 30 lakh guaranteed inaam for its customers in this sale from kitchen essentials to mobile phones, washing machines, two-wheelers and even a car.
“Grofers GOBD has played a key role in introducing new customers to the world of online grocery shopping. We acquired 2.5 lakh and 8 lakh new customers in the previous two editions of the sale and expect to bring 10 lakh new customers into the world of online grocery with this edition. We are targeting to sell over 10 crore items for a GMV of ₹500 crore compared to ₹207 crore and ₹403 crore in the previous two editions,” Grofers founder Saurabh Kumar told BusinessLine.
Pointing out that the biggest opportunity in India lies in the food and grocery space, Arvind Singhal, CMD of Technopak, said “$10-15 billion will be pumped in by external investors over the next few years into the Indian food and grocery market, which presents a whopping $400 billion opportunity. With Amazon and Flipkart already in the fray, Swiggy, which recently entered the food-delivery space, BigBasket, Grofers, Milkbasket… and with Reliance waiting in the wings to offer food and groceries online, the market buzz will centre around this space.”
Taking on Flipkart and Amazon
In the run-up to Republic Day both BigBasket and Grofers will take on the country’s biggest e-tailers, Flipkart and Amazon, for customer walletshare. Flipkart’s The Republic Day Sale from January 19-22, which offers up to 80 per cent discounts across categories, offers shoppers lower-than-sale prices if they pre-book their orders from January 15-17.
However, Flipkart groceries are limited to shoppers in Mumbai, Bengaluru, Chennai, Hyderabad and Delhi only. Amazon’s Great Indian Sale, which is also from January 19-22 will offer Amazon Fresh (fruits, veggies, meats etc) products in Bengaluru, Delhi, Mumbai and Hyderabad as well as Amazon Pantry (groceries) in 104 cities.
“The $1.5 billion online grocery market in 2019 will grow at a CAGR of 55 per cent to reach $20 billion by 2025, driven by more people across the country shopping online either for convenience or value for money. Currently, online penetration in the $575 billion grocery market is very low, with the top six cities, including Delhi-NCR, Bengaluru, Hyderabad, Mumbai, Chennai and Kolkata contributing to 80 per cent of the online grocery market. So, there is much scope for growth” said Rohan Agarwal, Director at RedSeer Consulting.
The online grocery space, which is dominated by BigBasket and Grofers, who together hold nearly 75 per cent market share, is home to approximately 874 online grocery start-ups, including B2B, B2C and start-ups that provide solutions to them. The year 2016 saw the beginning of consolidation with the shutdown of Gurgaon-based PepperTap, after which many others, including Local Baniya, Tokri, Townrush and ZopNow, shut shop and exited the space.
Online grocery start-ups attracted a little over $1 billion in investments from 2015 to 2018, witnessing a spike in 2015, with $245 million raised followed by a funding drought in 2016 and 2017, with $171 million and $49 million, raised, respectively. Things picked up a little, with $543 million coming in, as per data from research and analytics platform Tracxn.
Source: The Hindu
