?Grofers enables payment via meal vouchers by Sodexo

The retail arm of the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) is set to enter the online food market by selling the organic food products through e-commerce portals, that too at cheaper prices. The organic food products will be available on the leading e-commerce sites, Amazon and Grofers.

The Managing Director of NAFED, Sanjeev Chadha confirmed in a statement that the decision to sell the organic food products is in its final stages. “The agricultural trading agency has got the in-principle nod in this regard, and talks with the e-commerce sites have commenced,” Sanjeev said.

“We are tying up with online platforms such as Amazon and Grofers,” Sanjeev told, quoted a media report.

Referring to NAFED’s business margins i.e., total revenue minus total costs, Sanjeev added, “Our products will be cheaper because we will reduce our margins. The main idea is to help organic growers, especially small farmers.”

The domestic food market in India is expected to grow at about 25 per cent over the next five years.

The plan is being implemented under the Indian Government’s Paramparagat Krishi Vikas Yojana (PKVY). The PKVY is a cluster-based programme that encourages small farmers to promote organic farming; the Government provides requisite aid and assistance under the scheme.

Japanese investor SoftBank's Vision Fund is in final discussions to lead a new $120-150 million financing round in Grofers, a Gurugram-based online grocery firm.

A fund with a corpus of $100 billion will move the earlier investment Softbank made in Grofers from its own balance sheet also to this entity. 

The move of SoftBank to further invest in Grofers also puts a stay on rumours of the merger with a bigger rival Alibaba-backed BigBasket.

A people close to the matter said, "SoftBank has decided to double down on its investment in Grofers as talks with Alibaba for a possible merger with BigBasket have not progressed. The round may see the participation of a new financial investor as well in which case the round size may go up $200 million."

Low price online grocery supermarket, Grofers has announced its successful growth registering a strong single day sale crossing Rs. 7.8 crore on April 1, 2018, a five-fold growth, as compared to last year.

The brand led a dramatic shift in its customer base with 75 percent women customers as opposed to 69 percent men, over last year. With many firsts starting this financial year, FY 2017-18 led a significant shift in the online grocery shopping trends among Indians.

The shift has led to significant increase in cart size with women accounting for almost 80 percent of the sales on the platform.

With 12 percent of new users on the platform being first-time online buyers, it is interesting to note that affordable data connections are driving the uptake of online shopping amongst women.

Further, Jio has also accelerated the adoption, as a large user base of almost 43 percent comes from users who are using Jio.

"We are proud to register a phenomenal growth and shift in the grocery buying habits of middle-income Indian customers. As we increasingly become a preferred destination for online grocery shopping, we are delighted to notice the shift with women user base forming a larger buyer section leading to strong customer stickiness and increase in cart size," said Albinder Dhindsa, co-founder, and CEO, Grofers.

"This certainly is a testament to providing quality and consistency in the products and experience at our platform. Along with this, we continue to work with a lot of regional brands to help them with better visibility and distribution - falls in line with one of our goals of being able to make small manufacturers 50 percent of the Grofers platform within the next 12 months. As we continue to see the interesting shifts and trends shaping up the future of online grocery shopping, we reinforce our commitment to the growth of the market," Dhindsa added.

Almost 50 percent of the Grofers' orders have come from sectors of the city demarcated as high population density, low income in Delhi-NCR.

Online food and grocery retailer Grofers claims it has tripled sales between February 2017 through November, 2017 and it is exiting this year at a revenue annual run rate of Rs.1000 crore.

Albinder Dhindsa, co-founder & CEO, Grofers said “At Grofers, sales tripled between February and November, 2017 and we are exiting this year at a revenue annual run rate of Rs.1000 crore. Our average daily order volumes are now at 25,000 - a near 200% jump from the start of the year. Our core category for the year remained staples. We successfully positioned ourselves as a monthly grocery stock-up destination with staples growing 5 times for us in 2017. Also, starting June this year, we maximized our investment in building the General Merchandise category, including a range of kitchen & bathroom utility essentials, plastic ware, cookware, apparels and more. We want to be a one-stop solution for everything our consumers need for their homes, from food FMCG, non-food FMCG to durables. Post GST, we grew our GMV by 60% over the previous quarter. Our new user acquisition rates also increased by near 50% in the month after GST implementation.

Also during the GST transition, Grofers partnered with major brands and suppliers to stock up extra in order to resolve any availability concerns for the customers. Further, during that period, a low supply in offline channels, proved to be a period of online grocery adoption, which in a way has helped the company to gain consumers.

Lately online food and grocery retail has been attracting a lot of interest from e-commerce giants including Amazon, who has received FDI approval to open its food only retail venture in India.

Dhindsa also said “The $500m online grocery industry (GMV) has been witnessing steady growth in 2017 and we have been the biggest driver of that growth. The Industry has since been growing at 30% q-o-q with Grofers projected to grow at 50% q-o-q, till the end of Q4 2017. We expect the market to grow to a consolidated GMV of $2 bn by 2019. We have grown 4x over the last year and continue to provide a unique value proposition that is built for Indian customers”.

India's online grocery delivery service BigBasket and smaller rival Grofers India have begun talks on a possible merger, a source has revealed.

The report said, If the merger goes through, SoftBank Group, which is an existing investor in Grofers', will participate in a $60 million to $100 million funding round in the merged company.

The report also said, the talks, which are in early stages, may value BigBasket at about $700 million to $800 million, while Grofers could be valued at $150 to $200 million.

Online grocery sales are a fast growing segment in India's e-commerce industry as more consumers log in to internet for their purchases.

The apex food regulator in the country, Food Safety and Standards Authority of India (FSSAI), is aiming to improve the quality of food sold through online channels, after consumers complained about expired food products being sold on ecommerce sites.

In doing so, the regulator has adopted a two-pronged approach -e-commerce entities selling packaged food will have to register with the regulator -and all e-commerce companies selling cooked food will have to take licenses.

A Foodpanda spokesperson said, "We welcome the change by FSSAI and have ourselves been diligently working on the restaurant hygiene through our Food Doctor Programme. While we constantly work towards improving and maintaining standards, we have already set the process in motion to update the licence numbers and are already halfway."

Subsequently, FSSAI announced imported food items with less than 60% of shelf life will not be allowed to enter Indian market. Pawan Agarwal, CEO, FSSAI, said, "We have held talks with Amazon and Snapdeal. We have also asked them to come up with their own solutions."

A Snapdeal spokesperson said, "We appreciate FSSAI for their progressive outlook in conducting a comprehensive stakeholder consultation on the guidelines for all ecommerce food business operators. With a view to enable compliance with food safety and quality standards, we shall take steps to ensure adherence to the guidelines and also facilitate required communication to the sellers and the consumers."

Albinder Dhindsa, Co-founder of Grofers, said, "Yes, we will be getting registered."

The FSSAI guidelines also said food products offered for sale by any ecommerce entity "shall be liable to sampling at any point in supply chain."

Rashmi Daga, founder of online kitchen FreshMenu, which runs kitchens in many cities across the country, said her company has all necessary licenses in place.

Rashmi said, "The new guidelines will have implications for companies that list restaurants on their sites and deliver food."

Hari Menon, Co-founder and chief executive of Bigbasket said, "We already have FSSAI licenses for all our warehouses, for our last mile delivery unit, the license numbers are prominently displayed on all our private label products. We also ensure that we sell food products of companies only if they have an FSSAI license. It is a mandatory requirement for listing products on BigBasket."

Grofers, an online grocery delivery startup, has now scouted for government’s nod for Foreign Direct Investment (FDI) to carry out trading in food products. The move came right after government of India recently allowed 100 per cent FDI under government approval for trading, including through e-commerce, in respect of food products manufactured or produced in India.

As per the information on the website of the Department of Industrial Policy and Promotion (DIPP), Grofers India Pvt Ltd has sought approval "to undertake trading including through e-commerce in food products manufactured and/or produced in India".

Union Minister Harsimrat Kaur Badal has said India's food processing industry is expected to treble in coming years on the back of a higher economic growth. The size of the industry is about Rs 1.5 lakh crore.

The food processing ministry has recently put forth an idea of organizing World Food Summit in 2017. As per the ministry, this summit will act as a single podium for investors, technology solution providers, processors, manufacturers and all other relevant national and international stakeholders.