Case Study on the Indian Online Grocery Ecosystem

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The Indian startup ecosystem is seeing more and more entrepreneurs in serving customers in the middle-class segment, be it in the rural regions or in the urban regions. Even more so, due to the widespread awareness of technology and on-demand culture in the public powered by the Jio-Fication that led availability of internet across the country, in every village and towns because of Reliance Jio.

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Why should we care about Online grocery market?

With more than 3 unicorns alone in the niche of grocery delivery including BigBasket and Udaan, it is only fair to educate the young generation of Indian entrepreneurs about the dynamics of how the online grocery business with respect to customer nature and preference along with the role of government and regulatory bodies such as FSSAI and DISS.

And as if this many players and intricacies weren’t enough, international investors and big multinationals looking to capture the market is another challenge that any startup worth it’s salt looking to enter online grocery market must address and have a plan of action in place.

In this post, we are going to discuss the nitty-gritty of the on-demand grocery delivery companies with a special angle for the hyperlocal model. First of all, let’s discuss consumer science when it comes to their behavior with on-demand apps like Grofers and BigBasket.

Consumer Science for Indian Grocery Delivery Startups

Great companies such as Apple and Netflix are great because of how much they stress on Consumer Science. The same way, understanding the consumer science of Indian grocery delivery customers is of paramount importance.

Tailor the carts for conservative Budgeting

First off, you have to understand that unlike Fashion and lifestyle online shopping, grocery shopping is something that the customers want to spend money as less as possible. So, instead of trying to increase sales by clever unnecessary combos and offers that don’t add much value to them, focus on creating offers that truly decrease their total spending on grocery. Not only this will help in retaining the existing customers,  will help you land new customers.

Keeping It Fresh

This one is very important, especially in a country like India when the kitchen is still dominated by the loving home-makers – Moms and wives. If you fail to deliver fresh vegetables and fruits, there is nothing that can stop them from going back to the neighborhood vendors. 

Seasons and Occasions must be accounted for

Since there are so many festivities spread across the year in all parts of India, you need to tailor the inventory and the app according to them. This will lead to a great increase in sales.   

Bird’s Eye View on the Impact of Government and Regulatory Bodies.

It takes a lot of work to regulate and make sure that industry is truly serving the general public without any exploitation of the consumers as well as the entities involved in the market. That’s the job of government and its regulatory bodies.

In the last quarter of 2018 calendar year, the Indian government along with FSSAI released new directives for the last-mile delivery startups such as BigBasket and Grofers. This included the food-delivery startups as well.

According to these directions, the items for sale are liable for sampling at any point in the whole supply chain. This will help minimize problems that have been faced with last-mile delivery. It can also be looked as a step that aims at improving the vigilance for vendors in the last-mile supply chains and keeps a check on them.

Another important rule that has been passed is to maintain a certain standard of hygiene in the food, the items must have either 30% or 45 days of shelf life left when it is delivered. 

With the government as well as the regulatory bodies and companies working together, key problems in the on-demand and hyperlocal business models can be solved.

The involvement of Multinational Players and Investors

With retail behemoths such as Reliance Fresh and Walmart taking keen interest into capturing the indian grocery business, along with global e-commerce players such as Amazon and Alibaba using every trick in the hat to somehow get a firm grip on the on-demand grocery businesses is another challenge that any new startup will have to face head-on.

So, this was my analysis of the dynamics of Indian online grocery ecosystem. Have any questions or suggestions that the readers might find useful? Feel free to share in the comment box.