E- Grocery Market In India

India is 6th Largest Grocery Market in the World

Total Retail Market $470bn 2011
70%
Food & Grocery
Market

94%

30%
Rest

6%

Indian Retail Sector

Un-Organized Retail
Market

($443bn)

Organized Retail
Market (

Quick Facts

Organized Retail penetration

5-8 %

No. UnorganizedKiranas
Shops

12 mn

Growth rate of Retail Market

15-20%

Growth rate of Online Retail

Market

35%

$27bn)
Size of Food & Grocery Market in USD
Billion

482
236

302

16% Food $4.32bn

& Grocery

Marketing White Book 2011-12

2006

2010
Source: IGD Research & Estimates

2020
2

Indian Organized Retail and Grocery Sales are growing at 18.4%

Grocery Sales Growth Across
Countries (2010) in %

Share of Categories in organised Retail

F&G

18.4

Footwear
Furnishing

12.4

11.1

10

Furniture

9.2%
2.0%

Pharmacy

16.3%

6.1%

7.1%

7.1%

Books And Music

6.1%

8.2%

Home Improvement

9.2%

19.4%

3.1%
3.1%

1.0%
2.0%

Jewellery and
Watches
Nonstore

Source :India Retail Forum,2010

Restaurant
Apparel
Entertainment
Misc Products

Marketing White Book 2011-12

CDIT

Different Modern Store Formats in India

Hyper Markets
Shopping Malls
Departmental Stores
Super Markets
Online Web Stores

Modern Formats

Share of Spends

Purchase of..

10%
Traditional
Format
Modern Format
90%

Source: DEssence Research

Traditional
Format Store

Modern
Format Store

Staples, Packed Food Items and

other non-food
Household products

96%

15%

Perishables-Milk Eggs, Bread,

Vegetables, Fruits

99%

6%

Growth Drivers for e- Grocery Market in India

Growing Younger Population

Demand

Growing Internet Usage / Online Shoppers

Rising Disposable Income

Increasing Affluence Levels
Quality /Organic Products
Customer Driven And not Investment Driven
Growing e-Commerce Market in India

Multiple Channel Distribution

Supply

Flexible Delivery Options

Presence of Major Players
Convenience
Increasing supply of Packaged Grains and food products

Multiple Mode of Payments like Credit Cards, Debit Cards,

Net Banking, Mobile Payments like Airtel Money,
Mosambee (Swipe Credit & Debit Card on Mobile)
5

The Hybrid Model

Dairy

Meat

Bakeries

Breweries

Others
B2B

Wholesale/
Imports

Locality
Level

Cross Docking
Terminals

City-City Level
LDC

Stores

B2C

Pan-India
Individual Households

Business Models of e-Grocery currently in practice

Importer
(Wholesaler)

CDT

Central
Distribution
Terminal

CDT

LDC

LDC 1

LDC 2

LDC 3

LC D

LCD

LCD

Local
Distribution
Terminal

The Operation Model Can Be Divided In Two Approaches:

1. Stock It Yourself Limited Warehouses To Fulfill The Orders.

2. Outsourcing Warehouse Model-using Logistics Specialists Which Do The Work Of Stockpiling And Shipping Web
Stores.
Manufacturer

Importer
Wholesaler

Customer

Wholesaler

Key Indian e-Grocery Players focused on Metro Markets

Delivery Slots

Minimum
Order for Free
Delivery

Funded

Key Players

Location

Business
Model

Aaramshop.com

All India

Aggregator

24*7

Rs.500

Yes

Delhi

Own Supply chain

Processed within 1-3

days

Rs. 500

No

Delhi NCR

Own Supply Chain

48 Hr Delivery & 24*7

Support

No Minimum
Order

No

Callandorder.com

Mumbai

Own Supply chain

Next Day

Rs 500

No

FreshnDaily.com

Mumbai

Specific Localities &

Self Delivery

10am to 7pm & No

Delivery on Sunday

Rs. 150

No

Shopveg.in

Mumbai

Specific Localities &

Self Delivery

Same & Next Day

Rs. 200

No

Atmydoorsteps.com

Bangalore

Own Supply Chain

Same & Next Day

Rs 500

No

BigBasket.com

Bangalore

Own Supply Chain

Same & Next Day

Rs.1000

Yes

Zopnow.com

Bangalore

Own Supply Chain

Everyday Delivery

Rs.500

No

Chennai

Own Supply Chain

3pm-9pm, Next
Business day

Rs. 150

No8

Farm2Kitchen.com
MyGrahak.com

VeggiBazaar.com

Product Portfolio Of Key e-Grocery Players In India

Key Players

Aaramshop

Grocer
y

Fruit&
Vegetab
les

Conf
ectio
nary

Dairy
products,
Eggs

Organi
c
food

NonVeg

Beverag
es &
snacks

NA

NA

NA

Farm2kitchen

Pet
food

Home
care

Personal
Care

Toiletr
ies

MyGrahak

NA

Callandorder

NA

NA

Freshndaily

NA

NA

NA

NA

NA

Shopveg

NA

NA

NA

NA

NA

NA

Atmydoorsteps

NA

NA

BigBaskets

NA

NA

NA

NA

Zopnow

NA

NA

NA

Veggibazaar

NA

NA

NA

NA

9 NA

International e-Grocery Players

United States Of America
Amazon.com
Americagrocer.com
AULSuperstore.com
Netgrocer.com
ShopfoodEX.com
United Kingdom
Tesco.com
Ucado.com
Waitrose.com
Foodfullstop.com
Canada
E-Z Grocer.com
Canadagrocer.ca
Grocerygateway.com
Onlinegrocer.ca
Telegrocer.com
Singapore
Singaporegrocerystore.com
Egrocy.com
Yumtrade.com
10

Whose buying Grocery Online?

85% of Online Shoppers are between age
of 22 to 45
Female

63%

37%

24

Reasons For Purchasing Groceries

Online
38 37
35

32 30 30
28

25

Source: SOGS,india

61

53

32

11

11

Barriers to Purchasing Groceries Online

65
40

22 20 20

Male

15

38

32

31

22

20

18

15

11

What Motivates Shoppers to Buy Grocery Online?

Stated Critical Needs
Polite, Courteous Store Staff
Availability of store Staff
Credit Available
Fresh, Quality Services
Reasonability Prices
Trust Level

The Traditional
Format
Shopper

The Modern
Format Shopper

Polite, Courteous Store Staff

Fresh High Quality Stocks
Availability of Latest Products,
brands
Larger shelf display
Bulk buying

The Online
Shopper

Convenience Shopping
Already a Online shopper
Grabbing Bargain deals

The Commitment Drivers

Aware what a regular customer
wants
Personalized Services
Return /Exchange Policy
Less Impulsive buying
Stick to budget policy

Modern Shopping Experience

Discount
Coupons/Promotions/Freebies
Increasing Affluent levels

Use of Credit facilities

Better way of spending
Easy and convenient
Delivery at stated timings
12

Key Challenges in the Operating e-Grocery Model

Key
Challenges

Solid supply
Chain Management

Source: Booz and Company Analysis

13

Do Investors Think investing in E-grocery is a Good Deal?

E-Grocery companies in India have early-start up advantage.

Largely predictable business cycle helps ,even the conservative investors

find the business appealing.

New players coming up with specialty models (like farm2kitchen.com

organised food and organised Products ) which is appealing to customers.

Low Costs and logistics costs is still concern for many.

14

DEssence Consulting Services

DEssence Consulting is a Management Consulting, Business Strategy and M&A
Advisory firm
Build

Remain
Competitive

Grow

M&A
Advisory

Services
Market Entry & Growth Strategy
Business Plans & Financial Projections
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+91 22 28347425

Market Assessment
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Solutions to transform Food and Retail Sector
Access to Capital through our Investor
Network

chandni@dessenceconsulting.com
www.dessenceconsulting.com

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303, Aar Pee Center, 11th Road, MIDC, Andheri (E), Mumbai- 400093