Online grocery can sustain amid crisis in delivery model

Seeing Flipkart (Nearby), Amazon (AmazonNow) and Ola Store intensify the competition in the online grocery delivery segment doesn’t faze the confident Kishore Ganji, Zip.in’s exuberant CEO and Founder.

Although over-saturated and thin on margins, the delivery model is cutting into the inventory based model. The reasons of the former’s popularity could be varied, from ensuring repeat purchases to build a loyal base of customers to offering better prices to getting a decent funding and capitalisation in due time.

But there are flipsides too. Paytm shut its grocery service soon after launch, along with Grofers and PepperTap, firms that have shut operations in nine cities and froze their expansion plans respectively. Ganji says because people had to compromise on quality, money and time, it led him to start an inventory-led online grocery firm. Currently operational is Hyderabad and Vizag, it offers same day delivery on orders made before 1 PM, prompt services, on-the-spot returns on all orders, and the guarantee of freshness at one’s doorstep. Some excerpts from Ganji’s brief chat with Retailer Magazine.

Do you also have a warehouse of your own or do you operate just as a hyper-local delivery firm, connecting local retailers and the end customer?
Yes, we have our own warehouse. We have a ‘Just in Time’ model, with which we deliver goods to the consumers the same day. We are somewhere in between inventory based model and hyper-local. Customers can place order by 1 PM and receive same day delivery. We owe fulfilling that aspect due to technology!

How do you ensure quality of the products and deal with delivery service challenges?
Quality is most important for us. When our buyers procure items from the market, we carefully grade it, segregate it and pack it in house. We also use temperature controlled four-wheelers to deliver the products.

How many orders do you process in a day? How many products can be ordered from your online channel?
We currently carry about 8500 products. We receive 200 numbers of orders per day.

Talk us through the partnerships with local wholesalers and retailers and how difficult/ easy it was to get them onboard. Did this form as an initial challenge the company had to face?
Since we are JIT model, it’s essential that we work with wholesalers and retailers for product availability. But we realised that most of the players, even large companies, do have the infrastructure for electronic exchange of information. This is something we had to overcome.

What are your future plans?
We want to streamline our processes and offerings based on the learning from these two cities and scale PAN India, for which we will be raising Series-A funding soon. We are self-funded and are able to launch in two cities. We plan to expand our operations in 2 more cities by end of 2016. In terms of products we will increase our seller stock and thus expand our product range from 8000 to about 12000 products in the near future.