Grofers strengthens footprint to 27 cities

SoftBank-backed Grofers has strengthened its footprint to 27 cities in India, including Vadodara, Meerut, Rohtak, Panipat, Agra, and Durgapur. The online grocery retailer earlier had a presence in 14 Indian cities.

With this expansion, Grofers eyes to offer million more people access to affordable groceries.

Albinder Dhindsa, Co-Founder and CEO, Grofers, said, "With this expansion, we plan to reach out to consumers in non-metro cities and introduce them to the world of value-for-money groceries. Increased smartphone penetration has already set the path for digital adoption and we are hopeful that we would be able to dominate this space, just like we have done in our existing markets."

Started by Albinder Dhindsa and Saurabh Kumar in 2014, the SoftBank-backed company’s online grocery platform has enabled it to tap into the fast-growing middle-income communities in urban India. 

Grofers has seen its annualised gross merchandise value grow to $700 million over the last two years. The company focuses on the price-sensitive Indian consumers who are primarily driven by savings. It offers a complete range of quality products, strategically priced 30-40% less than national brands, across various categories like staples and kitchen ingredients, FMCG and personal hygiene items.

The company’s statement said, "Focussed on the price-sensitive Indian consumers who are primarily driven by savings, the company believes this expansion will help Grofers to deepen the penetration of its wide portfolio of own brands. Close to 90 percent of Grofers’ users are already using the company’s private-label brands (G-brands)."

Emergence of the organised grocery market

In India, the grocery industry, until recently, has been highly fragmented, unorganised, and predominantly small and family-owned businesses due to poor access to capital, technology, and regulations. With changing scenarios such as demographics, high economic growth and increasing incomes, the proliferation of brands, consumer awareness, etc, are boosting the organised grocery market.

The emergence of grocery chains such as BigBazaar, More Megastore, and others have successfully paved their way into the industry and are rapidly becoming customers’ favorite due to their cost-effectiveness. Globally, India is the sixth-largest grocery market and has a humongous potential for growth due to the rising population as well as disposable incomes.

The Indian grocery market accounts for 69% of India's total retail market.

What’s Shaping the Market

The grocery market in India has come a long way from the erstwhile Kirana shops to the mega-marts of today. The emergence of larger chains and stores began around 2005 and the sector has since grown to over 4,900 supermarkets and 500 hypermarkets across the country.

The factors responsible for the influx of grocery franchises are the Quality of products, the location of the grocery chain, the price of products at the grocery chain, the product range at the grocery chain, and service at the grocery chain.