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Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
Online Grocery Industry
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Online Grocery Industry

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Electronic shops are coming in India in a big way.

Electronic shops are coming in India in a big way.

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  • @rsharma123456

    I agree.
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  • In India the online grocery shopping is a growing trend and the slide show no wonder is just a glimpse of that. Many online grocery stores have come up and are offering customers a plethora of options. Many start ups like mygrahak are doing quite well in regions like Delhi through their connectivity, top-notch services and rewarding discount offers
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  • Introductions
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    • 1. “ Online Grocers : Moving the grocery store into the home” Empower Research April 9 th , 2009
    • 2. Structure of the presentation :
      • Executive Summary.
      • Online Grocery Industry’s Outlook.
      • Market Analysis.
      • Challenges faced by the Online-Grocery Industry and suggested solutions.
      • Key Global Players.
      • Study of the market leader in this industry: Tesco.
      • Research Process.
      • Appendices.
      • Sources
    • 3. Executive Summary
      • The objective of this project is to identify global trends in the Online Grocery Industry and to outline the key issues, challenges, findings, solutions and main conclusions.
      • The internet grocery market is an extension of home-shopping philosophy and a sector with considerable long-term potential. The online grocery sector continues to be dominated by the major super market chains, namely Tesco, Sainsbury’s, ASDA & Waitrose.
      • The online grocery market is still very much in its growth phase with a market capitalization of $6.5 billion approximately as in year 2008. Growing internet penetration, entry of new players and the realization amongst time-pressed consumers of the convenience of shopping from home has added feathers to the wings of online grocery industry. (Refer to slides 4 & 5)
      • Yet there are formidable barriers to entry which include high start-up costs, efficient stock-picking & replenishment systems, comprehensive delivery networks and user-friendly web design. In addition to these, efficient stock control & high product-substitution rates are among the major issues faced by the online grocers. Moreover gaining consumer loyalty and trust and the development of compelling, easy-to-use online platforms are some of the challenges that describe online grocery market.
      • Although this industry is faced with the above mentioned formidable challenges yet industry watchers say “it is no longer a question of whether internet grocery can be successful, rather the question is how big it will become”.
    • 4. Online Grocery Industry’s Outlook
      • Before we go into the intricacies of this industry let’s understand its current and potential growth.
      • Current scenario
      The above diagrams show that Europe is performing better than USA in terms of online Grocery sales with online grocery sales accounting for only 1% of the total E-Commerce Sales in the U.S. www.forresterresearch.com
    • 5. Market Potential of the online grocery industry. The above graphs show the prowess of Asia not only in terms of its internet user base but also in terms of growing internet penetration which is the basic infrastructure needed to facilitate online grocery sales but the fact that people in Asia are very peculiar about their grocery shopping shall make the acceptance of online grocery stores slow but no doubt the long term prospects are good. In addition to this Latin America, North America & Europe have good internet penetration rates, indicating good potential for this industry but the fact that Online grocery industry, which is lying low in the U.S & slowly rising in Europe, calls for some drastic improvements in the existing model cannot be denied.
    • 6. Industry Analysis :
    • 7. Challenges faced by the Online-Grocery Industry and suggested solutions:
      • Online privacy and security issues.
      • The Time lag between Purchase and Delivery.
      • Underperformance of websites and downtime (poor response time).
      • Risk perception.
      • Consumers are also discouraged from using online grocery channels because they do not know which sites to visit.
      • Probable solutions :
      • Effective database management, restricted access even to the employees of the online grocery stores.
      • Supply Chain Management.
      • Reassurance and Building brand loyalty through effective Customer service.
      • Regular Website Up gradation.
      • To combat ignorance of online grocery sites, grocery executives need to pay special attention to marketing initiatives.
    • 8. Key Players in the Online Grocery Industry : (Declared Defunct/Bankrupt) Major U.S Online Grocers . These major players command large market share in the relatively smaller Online Grocery Industry which is in its infancy, looking forward to grow in leaps and bounds. Source : The Online Grocery Industry by Prof. Karen Clay.
    • 9. Study of Market Leader in the Industry : Tesco
      • Tesco  PLC  is a British-based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share with profits exceeding £2 billion. In 2008, Tesco became the world's fourth largest retailer, the first movement among the top five since 2003. Originally specialising in food and drink, it has diversified into areas such as clothing, consumer electronics, financial services, telecoms, home, health and car insurance and software. (Source : www.wikipedia.org )
      • Tesco is now the world's biggest Internet grocer. However, Internet sales still represent a tiny, although growing, percentage of the overall UK grocery market. Most people use the Internet as a way of gathering information on products and making price comparisons before visiting their local store.
      • While the wider grocery market is incredibly closely tracked in terms of market share, there is no comparably precise data available on share breakdown in the online sector. However, based on various estimates and some figures declared by the major players, it is fair to assume that Tesco’s share is somewhere around 55%. (Source : aroq-online-grocery.pdf)
    • 10. Various initiatives taken by TESCO :
      • The “One In front” initiative was designed to ensure that queues of customers did not exceed two at any checkout (for its physical stores). Although it cost the company many millions of pounds to implement, the plan worked since customers appreciated the quick and efficient service provided.
      • Tesco was also a first mover in providing loyalty cards in the U.K. Launched in 1995, the loyalty cards rewarded the customers for shopping with them.
      • However one of the most risky and adventurous initiatives adopted by Tesco was online grocery retailing.
      • Green initiatives include the introduction in May 2007 of its first fleet of fully electric, zero-emission home delivery vans. Each of the zero-emission vans, which are based at the newly opened ‘green’ supermarket in Shrewsbury and throughout London, will reduce CO 2 emissions by 100 tonnes per year, Tesco claims.
      • The company also offers customers a ‘bag less’ delivery service, which was launched in response to consumer concerns about the number of bags used for home shopping. The initiative is one of a raft of projects aimed at saving 1bn bags per year.
      Sources : www.just-food.com ; www.tesco.com
    • 11. Tesco.com’s Strategies which have facilitated its growth beyond borders are highlighted below :
      • Deliver an optimised customer experience with the following core values:
      • – Guarantees lowest prices.
      • – Delivers best availability.
      • – Delivers best product range.
      • – Provides a simple easy to use interface with
      • great customer service.
      Since1990s Tesco has grown manifold times, its consumer friendly strategies and Customer-orientation has made this possible. Source : www.wikipedia.org
    • 12. Research Process
      • The research process starts defining the objective of the project (as outlined in the executive summary) followed by industry analysis to find out the key issues, trends, challenges, key findings and main conclusions. This involved study of the key players in this industry followed by the study of the top player’s strategies and initiatives. All these involved :
      • Extensive Data Collection;
      • Data mining to “CHURN” out relevant data;
      • Data Analysis;
      • Drawing out conclusions based on the analysis.
      • However Collecting recent data and churning it to find out the relevant and reliable data was a tough job. However the clear cut objective guided the flow of project.
    • 13. Appendices
      • Webvan, online grocer, went bankrupt in 2001.
      • Simon Delivers Inc. (Minnesota) closed on July 21, 2008.
      • Almost all E-Grocer requires the potential customer to register before they can buy the food and grocery items.
      • GroceryGateway.com, another e-grocer has a unique strategy to increase sales . It says “refer-A-Friend and Get $5”. Moreover it doesn’t need any registration before purchase.
      • www.ishopindia.com : America’s largest online Indian grocer( since 1972, online since 2000).
      • Peapod’s, a leading U.S online grocer, slogan is “Smart Shopping for busy people”.
      • Online privacy and security issues and the Time lag between Purchase and Delivery are pulling down the sales of online grocery industry.
    • 14. Sources
      • www.internetworldstats.com
      • www.khoj.com
      • www.infoseek.com
      • www.internetnews.com
      • www.dawn.com
      • www.marketresearch.com
      • www.bharatbook.com
      • www.just-food.com
      • www.researchandmarkets.com
      • www.internetretailer.com
      • www.ecommerce-news.com
      • www.wikipedia.com
      • www.verdictresearch.com
      • www.tesco.com
      • www.cs-retailing.com
      • www.cobornsdelivers.com
      • www.greenfieldonlive.com

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