Product details

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Abstract

In India, more than 14 million outlets operate having store space of less than 500 square feet. Such stores are owned and operated by families lacking scale to grow. Therefore, they offer a huge investment potential. It is way more problematic to sell perishable goods online compared to selling non-perishable products; fresh tomatoes storing and supplying is a completely different ball game from storing cell phones and their distribution. According to IGD (Research firm) the Indian grocery market would overtake Japan to become the third largest market by 2016. Meanwhile, The online grocery market of India, (estimated to be less than USD100 million currently), is expected to be worth billions in the near future. e-Commerce’s next generation is going to be the hyper local mobile commerce category for more repeated use cases such as food and groceries according to the managing director of Sequoia Capital India, which backs companies like Grofers and PepperTap as well as their counterpart Instacart in America. Grocery has high frequency purchase which makes it the largest and the segment with the highest turnover of the e-Commerce market. Perishable goods online sell far more difficult than non-perishables; it is entirely different to store and supply fresh tomatoes compared to storing and supplying of cell phones. The main competition of the online grocery stores are the local grocers who have been able to build their loyal customer base on reliability, trust and fast, customised service. This business of selling groceries is low-margin (margins well below 10 %) even though expensive investments is required for building high-end IT infrastructure, a supply chain which is efficient, quality warehousing & facilities for storage, and an proficient system for delivery.
Location:
Industry:
Size:
10 to 100 employees
Other setting(s):
January to November 2015

About

Abstract

In India, more than 14 million outlets operate having store space of less than 500 square feet. Such stores are owned and operated by families lacking scale to grow. Therefore, they offer a huge investment potential. It is way more problematic to sell perishable goods online compared to selling non-perishable products; fresh tomatoes storing and supplying is a completely different ball game from storing cell phones and their distribution. According to IGD (Research firm) the Indian grocery market would overtake Japan to become the third largest market by 2016. Meanwhile, The online grocery market of India, (estimated to be less than USD100 million currently), is expected to be worth billions in the near future. e-Commerce’s next generation is going to be the hyper local mobile commerce category for more repeated use cases such as food and groceries according to the managing director of Sequoia Capital India, which backs companies like Grofers and PepperTap as well as their counterpart Instacart in America. Grocery has high frequency purchase which makes it the largest and the segment with the highest turnover of the e-Commerce market. Perishable goods online sell far more difficult than non-perishables; it is entirely different to store and supply fresh tomatoes compared to storing and supplying of cell phones. The main competition of the online grocery stores are the local grocers who have been able to build their loyal customer base on reliability, trust and fast, customised service. This business of selling groceries is low-margin (margins well below 10 %) even though expensive investments is required for building high-end IT infrastructure, a supply chain which is efficient, quality warehousing & facilities for storage, and an proficient system for delivery.

Settings

Location:
Industry:
Size:
10 to 100 employees
Other setting(s):
January to November 2015

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