Leading grocery firm Hopcoms is likely to venture into the burgeoning ecommerce space. The state co-operative that sells fruit and vegetables through nearly 300 outlets in Bengaluru is launching its e-commerce portal within the next two months, says a report in ET retail.
"Farmers will be benefitted from this venture, and there will be more employment opportunities as we are hiring more personnel for this effort," said Kadire Gowda, Managing Director, Hopcoms. The software is being finalized by Keonics and will be functional in two months, thanks to an initial investment of Rs 1 crore.
Hopcoms is also planning to extend its computerized billing system, which was introduced last year, to all its outlets in the city. Currently , it is being used in only 80 out of the 272 outlets. "We are ready to have more Hopcoms outlets in the city; we have enough financial and personnel strength for it. But the BBMP is not giving us land for the purpose," Gowda said.
Some experts, however, believe ecommerce portals may not necessarily be the best way to increasing profit in the grocery sector.
Arvind K Singhal, chairman and managing director of Technopak, a management consulting firm, told ET that physical retailers could have a brighter future by expanding their delivery services instead."E-commerce portals need more investment in supply-chain development, especially in sourcing, delivery and customer acquisition. In the near future, Reliance and Flipkart may also come up with their own online grocery stores, giving more competition. So when local retailers do the same, they might be biting off more than they can chew."
About the Rs 1 crore investment, Singhal said: "If they use that money to get their website listed at the top in a Google search, and in marketing via social media, they might make more profit."
However, Mukesh Singh, CEO of Zopnow, an online grocery store based in Bangalore, says that his company makes 25% of its revenue though fruits and vegetables alone."Our prices are almost on par with that of the Hopcoms. With a no-questions-asked return policy , we have had a unique advantage over our competitors; our return rate is hardly 3%."
Zopnow, which began its project in Bangalore in 2012, started providing vegetables and fruits through its website only less than a year ago.