Thought Paper prepared by Ambili CK

1. Online Grocery in India
Thought paper
Online Grocery in India
Prepared by: Ambili CK, MBA

2. Background of paper
• As part of my MBA studies I thought I would
do a study on the online grocery stores
present in India.
• Surprisingly I found that there are at least• Surprisingly I found that there are at least
three grocery portals from Coimbatore and
one of them BigShopIn was doing very well.
• The portal of BigShopIn looks very
professional and user friendly

3. www.bigshopin.com
• www.bigshopin.com is an e-commerce portal
that was launched in Coimbatore.
• This is maintained by Corporate Concepts a sister
concern of the 30 year old trading company
Travelon.Travelon.
• Although it is a general portal the initial focus of
the site has been on the online grocery sale
• The site has a tie up with the well known Pothy’s
Supermarket for the delivery of the grocery
products.

4. The front page has an option of going into the lifestyle or
grocery sections

5. The home page of grocery section is clutter free and
looks sophisticated – unlike many other portals which
are very gaudy

6. To do shopping you have to select your location. The
company has plans to go pan national and this works on
the pin code areas.

7. Products can be selected based on categories. The portal
has a very good range of products

8. You can select your specific brands also.

9. There is a separate section for offers.

10. Other Portals

18. Findings & InterpretationsFindings & Interpretations

19. Grocery: Online Business Models
BigBasket.com AaramShop.com BigShopIn.com TownEss.com Zopnow.com ChennaiOnlineGrocery.com MyGrahak.com
Unique
Selling
Proposition
Supermarket-like
breadth of products
Online shopping
from your favourite
kirana
Range of products &
brands
High quality
produce
Discounts &
fastest home
delivery Best prices, best products
Family
Supermarket with
discounts
Geographic
Spread
Bangalore,
Hyderabad,
Mumbai currently.
12 planned by end
2013 30 cities currently Coimbatore currently
Bangalore
currently
South & east
bangalore
currently Chennai City Delhi - NCR region
Categories
Fruits & vegetable,
staples, FMCG
products, meats &
fish
Product range
dependent on kirana
store chosen for
ordering
Staples, FMCG
Products
Fruits &
vegetables,
Staples, FMCG
Products
Staples,
FMCG
products Staples, FMCG Products
Staples, FMCG
products.Categories fish ordering Products Products products Staples, FMCG Products products.
Inventory
Mixed of self &
third party
No central inventory.
Orders fulfilled by
Kirana stores Mostly third party
Mixed of self
and third party Mostly self Mixed of self and third party
Mostly self- own
brick & mortar
store
Deliveries
Orders delivered
same day or next.
Rs.20 charge for
orders below
Rs.1000
Done by kirana
stores directly, often
for no extra charge
and on the same
day
Done by Pothys. Same
day delivery for orders
before 12 Noon, or next
day. Rs.50 charge for
delivery below
Rs.750/out of area
limits.
Orders
delivered same
day or next day
at two slots.
Rs.20 charged
for each order
Orders
delivered
same day or
next day.
Rs.30 for
delivery below
Rs.500
Orders delivered within 24
hours and no extra charge.
Free home
delivery(only in
Delhi-NCR) within
48 hours
Profitability
Expects to become
profitable in 2013.
$10 million in VC
funding
Close to break even
self funded Self funded Self funded Self funded
Funded by ChennaiStore, a
sister concern Self funded

20. Points to ponder
• Launched in 2001, Sangam Direct for
Hindustan Unilever was sold off in 2007
to Mumbai-based Wadhavan Retail
which ran a chain of stores under the
Spinach brand.
• Sangam turned out to be the kiss of
death for Wadhavan too, because in
2010 it shuttered all its Spinach stores.
• For all its size and clout even big chains• For all its size and clout even big chains
like Walmart have not been able to run
online groceries with similar kind of
success as their brick and mortar
business
• Among online grocery shops still running
successfully the oldest was started in
December 2011.

21. • Currently BigBasket stocks most provisions (which it cleans and packages under its
own brand) while most fruits and vegetables are sourced twice daily from
wholesale mandis or Safal, and FMCGs from Metro Cash & Carry.
• Where the cookie crumbles is the cost of logistics. The margins in this category are
so low that you literally run out of money the moment you’ve travelled 5
kilometres to deliver an order.
• Customers also expect 24-hour delivery. That entails maintaining own warehouses,
significant inventory, and delivery vehicles and staff. A centralised Amazon or
Flipkart-style warehouse using third-party couriers is out of the question. Add
Points to ponder
Flipkart-style warehouse using third-party couriers is out of the question. Add
perishables like fruits, vegetables or meats into the equation and the supply chain
costs and risks increase exponentially.
• Finally, the scale of FMCG distribution and the high service levels of the
neighbourhood kirana (who will often home-deliver even one or two items at no
extra charge) set impossibly high benchmarks to beat.
• Instead of charging a commission from either its customers or the kirana stores,
Aaramshop charges FMCG brands for running promotions and marketing
campaigns on its website. They believe FMCG companies don’t have the last mile
connect with their customers in spite of being the largest ad spenders in the
country. Aaramshop is the platform that he sells to them as the solution. Which is
why they were able to break even in less than a year.

22. Thank YouThank You