Online Grocery Model - Mumbai Startup

2. Introduction
• Online Super Market – Website & Mobile App
• Launched in 2012 in Mumbai
• Founded by – Rashi Choudhary, Karan Mehrotra & Amit Naik
• Minimum Order of Rs 500
• Free Next Day Delivery
• Target Audience – Working Age Women (25-40 Years), NRI’s & Senior Citizens
• Competitors
- Direct : Big Basket, EkStop, Mera Grocer, Zop Now, Grofers, PepperTap etc
- Indirect : Local Kirana Stores, Big Bazaar, Reliance Fresh
• Logo Changed in 2015

3. Why use Local Banya / Benefits
• Saves Time
• No long queue
• Shop from Home
• Saves Money on travel or transport of goods
• Multiple payment modes
• Technological Personalized Recommendations
• Discounts & Offers
• History of Past Orders & Reorder from Past Orders.

4. How do they do it ? / Business Model
• Warehousing and Sourcing Model (For Fresh Foods /
Highly Perishable Items)
• Handle Own Delivery Logistics
• Own Vehicles and Delivery Boys
• Tie up with wholesalers and Cash & Carry
• Capable of Delivering Perishable Items
• Tie up with Niche Stores
• Handle around 600-700 orders per day

5. Challenges
• High Implementation and Operating Cost
• Customer Satisfaction / Customer Retention because Consumer behavior is Multi Channel
• Adaptability
• Technology and People Management
• Less Profit Margin ( ~ 2% )
• Funding
• Stiff Competition
• Achieving Scalability
• Expensive Delivery Equipment's
• Excess Spending on Advertisement
• Poor Business Strategy - Not Concentrating more on Competitors while making decision
• Poor Logistics ( consuming ~ 20% of the profit share )
• 3rd Party Local Logistics – Some Delivery Vehicle Outsourced
• Inefficient Drivers and Delayed Delivery

6. Raison d'être
Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business
manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which
the firm operates.

7. Degree of Rivalry
HIGH MEDIUM LOW
Exit Barriers LOW
Industry
Concentration
HIGH
Fixed Cost and Storage
Cost
HIGH
Industry Growth
HIGH
Product Differences LOW
Switching Costs
LOW
Brand Identity
LOW
Diversity Of Rivals Medium

8. Threat of Substitute Products
HIGH MEDIUM LOW
Switching Costs LOW
Buyer inclination to
substitute
HIGH
Price Performance of
substitutes
HIGH

9. Buyers Power
HIGH MEDIUM LOW
Bargaining Leverage HIGH
Buyer Volume HIGH
Buyers Information HIGH
Brand Identity LOW
Price Sensitivity Medium
Backward Integration Low
Product
Differentiation
Low
Substitute Available HIGH
Buyers Incentives Low

10. Barriers To Entry
HIGH MEDIUM LOW
Absolute Cost
Advantage
Medium
Government Policy Low
Capital Required High
Brand Identity High
Switching Cost Medium
Proprietary Product Low
Access to Input Low
Access to Distribution Medium

11. Supplier Power
HIGH MEDIUM LOW
Supplier
Concentration
High
Importance Of Volume High
Switching cost of Firm High
Presence of Substitute
input
Medium
Threat Of Forward
Integration
High
Impact on Cost High

12. Recommendations
• Better Inventory and Supply Chain Management
• Low Inventory Model
• Tie ups with retailers to check inventory of product in proximity, instead of sending from warehouse.
• Outsourcing some delivery vehicles
• Company employees for packaging, processing and delivery - On time delivery is 97%
• Creating Blue Ocean Model: Tie-up with Restaurant, Gym and College’s Canteen.
• Start in-house brands which will give more margins
• Do not highlight discounts for premium products
• Social media advertising for Mumbai based social communities. Currently very low presence on social
media
• Future Expansion:
• Pune
• Kolkata
• Gurgaon
• Noida, Greater Noida
• South Delhi

13. Thanks Guys