Groceries are the basic need of life. You can eliminate movies from your weekend entertainment routine and stop dining out, but you can’t survive without soaps, toothpaste, vegetables, and other monthly ration. Busy consumers of the cities are so engrossed in their daily lives that they are not able to squeeze out time for basic grocery shopping.
High population of bachelors and bachelorettes live independently in urban cities. They not only deal with tiring shifts and transport hassles but have to manage every domestic chore single handedly. For such fast and exhaustive lifestyle, door-to-door and online services are indispensable necessities. Options of ordering apparel, electronics, shoes, and groceries are comfortable and relatively easy. With the overwhelming penetration of internet in our everyday living and increasing consumer base, online retail stores for groceries are the saving grace. Most of the existing e-retailers are offering grocery services in metros and other major urban cities, along with many start-ups venturing into this domain.
Spending on groceries and other daily essentials is the most consistent expenditure for any household. However, it is still not as popular in the ambit of online shopping. Taking groceries and staples to the online domain is a huge opportunity and holds tremendous potential.
Grocery e-tailing is quite intriguing but has a great probability of high percentage of iterating customers. All that’s required is impressing the customer with the first order. Once you have satisfied the customer, you will have one more regular consumer added to your clientele. Grocery e-tailing is a service-oriented domain. To make it successful, you need to cater your consumers in the best way. Maintaining quality of product and promptness of delivery translates into volume of sales and customer loyalty.
Is This Business Model Sustainable for Indian Market?
Online grocery market is still under germination phase and because of this, the question whether these ventures are feasible for Indian market often occurs. The mass here, are not used to shopping daily essentials online and are sceptical about transiting from the traditional way of picking groceries to the modern e-tailing. The consumer base, therefore, is not meeting expectation. At the same time, online shopping portals are struggling cost of transportation, manpower, and storage while providing products at the purchase rate. This is increasing considerable amount of burden on the e-tailers, which is not being compensated by the current customer inflow. This does not make it sound like a solid business structure considering the current scenario.
On the flipside, the intention behind these ventures is to get a hold in the market and getting recognized. Generating profit is not the immediate goal of the business owners. This business approach has high potential and is grabbing eyeballs of many venture capitalists and equity firms. These funds are being invested in the online grocery enterprises to keep it running and meet operational costs until it is widely accepted by the mass.
Grocery e-tailing is the future, but to establish and operate these sorts of businesses, long-term vision is the priority and profit takes a backseat during initial establishment. Buying groceries online is convenient and in a matter of sometime, majority of the population will incline towards this option. Until then, business model like these would require large investment to sustain.
Authored By: Pratik Jindal, MD, SRS- E Retail