E-Grocers Revolution: How Ordering Groceries Online Could Help Revive Your Neighbourhood Kirana Stores?

As Amazon and other online retailers look for hyper-local collaborations, offline grocery shops stand to gain. E-grocers like Amazon's Kirana Now and Localbanya to focus on timely delivery. E-grocers like Amazon's new 'Kirana Now' programme and leading e-grocer Localbanya are all set to speed up the delivery process. 

From ordering a pizza to calling a plumber home, one just needs to tap a few times on a smartphone to get things done.
Now, it is even possible to pick up the phone, tap on an app and get all the ingredients of making a pizza as well as other grocery items, including milk and vegetables, delivered to your home within a day, along with nifty discounts and no hassle of tending change as payments are done online.

With an estimated valuation of over $360 billion, India happens to be the sixth largest grocery market in the world. Big stores and supermarkets only occupy a 20% share of this market. But another contender for a share of the pie is already here: online retail.

Retail of groceries through online and mobile mediums has been around in India for some time now but it has remained limited to big cities. But the market is set to widen as all the players in the Indian e-commerce trinity – Amazon, Flipkart and Snapdeal – seem interested in jumping into the sector and trying their luck in selling every day groceries.

At a time when there’s an app for everything online shopping websites seemingly competing with each other to give away bigger discounts, consumers can only rejoice at the bigger players' entry. But there are also concerns about the future of offline retail in the country as it is feared that the deep pockets of big online retailers might force the small mom-and-pop stores on every nook and corner of the country to shut down.

However, as it appears, the latest entrants, along with a few existing players in the online grocery shopping market, are not only going to protect the shopkeepers but may also end up giving them more business by providing them an opportunity to service more consumers.

Online to offline

Last month, the internet giant Amazon announced its plans to sell grocery online in the country through a network of small offline retailers. Called Kirana Now, the service will be piloted in Bangalore soon with a delivery timeline of just 24 hours. Amazon plans to make use of the existing shops in the neighbourhoods to service these order. Similar to its e-commerce marketplace platform, the company will allow shopkeepers to sign up as sellers on its platform. So when one goes on to buy goods on the site, the registered shopkeeper from the neighbourhood are the ones who.

Flipkart too, is planning to list grocery products on its site by the second half of the year though it is not clear if it would allow shopkeepers to be sellers on the site or retail grocery by itself. Snapdeal, on the other hand, has partnered with Godrej’s Nature’s Basket, an online retail platform to list its products on the site and retail them online.

Even though the biggies are yet to formally enter the market and unveil their offerings, many existing players are making a killing by the help of the same mortar stores that Amazon is trying to bring in its fold.

Changing baskets

Started in 2012, BigBasket is one of the biggest portals retailing groceries online. It is present in cities like Mumbai, Pune, Delhi, Hyderabad and it is quickly expanding to others riding on the multiple rounds of funding it has raised so far.

Valued at over Rs 1,000 crores, the company's averages Rs 1,600 per transaction. Even though it started off as a standalone retailer, realising the trend in the market, it has already begun the process of collaborating with neighbourhood stores to speed up delivery, and hopes to offer delivery in 60 minutes or less soon.

"We realised that about 20-30% of groceries are unplanned and immediate-need purchases, and cannot wait for the next day or even the next few hours," co-founder Abhinay Choudhary was quoted as saying by the Economic Times.  

Another such startup, Grofers, just raised $35 million in capital, less than two months after it had raised $10 million to expand and recruit work force. Currently operating in Bangalore, Delhi and Hyderabad, the company partners with 400 merchants and expects to service more than 20,000 orders in April.

Similarly, another startup called PepperTap is working on a similar hyperlocal model which allows it to deliver goods faster. It recently raised $10 million in funding and claims to have over 15,000 different items in its inventory.

Even though there are many other players in the market like LocalBanya and ZopNow which have been operating through their warehouses, they are all keen to go the hyperlocal way. With new and old players trying to deliver (not eat) the same pie, the kirana wars have just begun.