Shifting focus! Flipkart, Amazon to take new route - How online shoppers will benefit
CLSA states that with the highest frequency across categories and high potential for private labels, eGrocery can grow to US$99bn over the next decade
E-commerce companies have taken over the conventional methods of shopping. The doorstep delivery system has proven to be very convenient for customers. Moreover, to stay in the tough competition by companies of the same niches, big e-commerce giants like Flipkart and Amazon also offer their subscribers with discounts and offers. But recently, to stay at the top of their game in the Indian market, Flipkart and Amazon have shifted their focus from electronic gadgets and apparels to the most rewarding category: grocery. Evolving as a very promising category, with various e-retail platforms such as BigBasket and Grofers catering for the demand of the Indian consumer.
CLSA states that with the highest frequency across categories and high potential for private labels, eGrocery can grow to US$99bn over the next decade. To spread their arms into developing areas, Flipkart entered the online grocery market in August 2018 by launching Supermart in Bengaluru, with a 150K sq ft grocery fulfilment centre with 10K SKUs. Moreover, Amazon, too is aggressively expanding with two models – Pantry and Prime Now.
Food delivery platform Swiggy also understood this new trend and ventured into it by coming up with eGrocery (Swiggy Stores) pilots in Gurugram, uniquely tying up with 3,500 local “kirana” or mom & pop stores. Reliance, also, is tying up with various small indigenous grocery stores for similar services.
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The arena of e-grocery in India also has niche players such as DailyNinja, Milkbasket, Doodhwala, Supr Daily, Satvacart, Zappfresh, Licious and SpicyBe which cater for selected products and cities.
According to CLSA, online grocery market in India will see an upsurge and give a bountiful result in days to come. It states the following reasons why E-commerce retail platforms suddenly shifted their focus to the category of grocery,
- Indians spend ~US$500bn on groceries every year; however, it is the least penetrated of the large e-tail segments, with <1% penetration.
- Grofers recently raised US$60m, BigBasket raised US$150m, while Swiggy’s US$1bn raise was partly aimed at expanding into online grocery.
- With mainstream e-tailers entering the market, the market is expected to expand rapidly.
So to say, with niche players and now the e-commerce giants entering into the grocery sphere, the overall market for grocery shopping and selling is going to witness a rise. Additionally, with so many platforms to choose from, the customers remain the most benefits with prices of products lower than that of the markets and attractive offers and discounts to choose form.
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