The hyperlocal online grocery stores are competing with the Kiranas by cutting on the time taken to deliver groceries. By shortening delivery times, partnering with modern retail stores and increasing the delivery points, online grocers in India are handling deliveries more efficiently and quickly.
ZopNow, which is run by Bengaluru-based ZN Retail Pvt. Ltd., is one such player. After having pivoted from an inventory-based model to partnering with hypermarket modern retail bazaars for product procurement, the four-year-old online grocery store is going the Omni-channel way, getting the online and offline together, while saving rentals of warehouses and other capital costs.
Going through a business model shift and securing a Rs 62 crore funding, led by San Francisco-based Dragoneer Investment Group, all in a year’s time, Retailer caught up with CEO and Founder, Mukesh Singh, who talked about the company’s hybrid model, the catch in delivering quickly and growth opportunity in the current offline-online space.
How does ZopNow leverage the opportunity provided by offline and online commerce?
ZopNow works on a hybrid model, leveraging the best of offline and online commerce. Having integrated itself with the HyperCity chain of stores, the combined service offerings emphasise a large inventory range, a customer-centric approach, and a superior use of technology, based on their combined understanding of retail operations and technology.
Recently, ZopNow has also tied up with Aditya Birla Group Hypermarket MORE, for our operations in Gurgaon and NCR Regions.
A lot of start-ups are entering the space, what could be the best strategy to stay ahead?
The hyperlocal model lends itself to a great deal of flexibility in terms of managing inventory and last mile delivery. That itself is a great advantage that reflects in our promise of a 3-hour delivery for a sensitive product category such as grocery. Consumers always have an option to buy their daily consumables from their neighbourhood convenience stores. The only way to encourage them to go online for the same category is by earning their trust on our capability to deliver efficiently, consistently and quickly. This is not an easy problem to solve - but ZopNow along with the investor community is betting on the operational capabilities that we have been able to build on the foundation of a rock-solid technology infrastructure.
Who takes care of the delivery for you?
We have our own logistics team which is responsible for a timely delivery. Our delivery boys have been equipped with smart phones which would include the order details and customer details along with the exact GPS location of the customer.
You have built partnerships with modern retail bazaars (‘More’ being the recent one) and have gone asset-light. What’s the response been like? How many customers in a day, and repeat orders?
We can't share the overall numbers, but over the last 6 months and within a year of pivoting from an inventory-led model to our current model, we have seen a month-on-month growth averaging 50-60 per cent. Our growth plans for the next two quarters are equally aggressive and we will soon be the largest player of our kind for online grocery shopping with a presence in at least 10 cities, if not more, by end of this financial year. The repeat business for us has been consistently above 70 per cent i.e. 70 per cent of weekly transactions are from repeat customers.
Another way to look at this is the percentage of customers making a repeat transaction within a month, and that too, is above 50 per cent for us which is a healthy indicator of the trust and value we have been able to establish with them. We are obviously aiming for further improvement in these metrics.
What challenges do you face when you expand to a new location? What role has technology played in operations?
The advantage with our model is that once the backend of our operations gets integrated with that of a partner like HyperCity or More MegaStore - future expansion to other cities becomes a lot easier. With existing partners, we are currently adding new cities and stores within a short period of 30 days. The technology is the biggest enabler for helping us create a seamless workflow for all orders that are fulfilled using the inventory placed in offline partner stores. The level of integration is to the extent that our pickers know exactly which aisle and column to look at for any product and the exact order in which they should pick all the products to be placed in any particular order basket.
This helps them achieve optimal efficiency that brings down our cost on serving each order. Such focus on tech-enabled operations has already brought us to the level of profitability for two of our stores. Others are expected to hit profitability within this financial year.
Talk about the funds you have raised and utilised so far.
We have raised two rounds of funding from Accel Partners, Qualcomm Ventures and media company Bennett Coleman & Co and San Francisco-based Dragoneer Investment Group.
How many cities are you currently operational in?
ZopNow is currently operational in Bengaluru, Hyderabad, Pune, Navi Mumbai, Mumbai, Gurgaon and NCR Regions.