The competition is intensifying in the $700-billion online grocery market with players such as JioMart, BigBasket and Amazon going from strength to strength, while Grofers is fighting to stay in the game.
Albinder Dhindsa, CEO and Co-founder, Grofers, exuded confidence over the future saying: "We respect the competition and are not worried." He opined that more players would continue to enter the online grocery space.
Grofers was founded in December 2013 and is based in Gurugram. As of 2018, the online grocery delivery service had raised about $535.5 million from various investors, including SoftBank, Tiger Global, and Sequoia Capital.
During the lockdown, Grofers registered a major demand surge with more Indians shopping online for essentials amid a continued nationwide lockdown to stem the spread of Covid-19.
Online grocery became a rage during the lockdown, and Grofers is on track to become one of the winners amid the havoc that the virus has wreaked. The company had served 4.2 million households by the end of May and shipped 44 million items in June.
It also witnessed a 40 percent increase in basket size during the lockdown, which means it was delivering more goods for more money to each customer.
US-based market research company Forrester Research revealed that India’s online grocery market could record sales of $3 billion this year, an increase of 76 percent from $1.7 billion last year.
Grand Orange Bag Days
Grofers’ grocery sale event, called Grand Orange Bag Days 4.0 (GOBD-4), opened on August 8 will go on until August 16.
Grand Orange Bag Days, a bi-annual sale, was introduced by Grofers in 2019. During the sale, it offers shopping for household items as well as groceries, with prices lower than those in supermarkets and local kirana stores.
The first three editions of the sale focussed on acquiring new customers and moving people from offline shopping to the online grocery shopping space. The fourth edition aims to attract customers by offering big savings at a time when people are reluctant to venture into public spaces or brick and mortar outlets.
The sale includes various offers — flat 50 percent off; buy one; get one free; buy two, get one free etc. Shoppers can also grab additional discounts by availing offers from leading banks and payment apps.
Over the nine-day sale, Grofers aims to sell 2.5 crore items manufactured by its MSME partners and serve 5 million customers.
Grofers, under its proprietary initiative Brandfarm, works with small and local businesses. The company was already working with 200 Micro, Small & Medium Enterprises (MSMEs), and has onboarded 600 new MSMEs for its GOBD 4.0 sale. It has deployed more than Rs 50 crore as working capital support and advance payments to support small manufacturing partners, in a single month.
Grofers has ramped-up its warehouse capacity by adding three new facilities to its network and has hired 2,000 additional warehouse staff to meet heightened demand.
IPO Plans
The lockdown-induced surge has proved to be a boon for Grofers as the company has advanced plans for an initial public offering (IPO). It is now planning to go public by the end of 2021.
The company, which had initially planned to go public in 2022, expects to turn profitable this financial year. Grofers had already turned operationally profitable in January 2020, and is on track to become EBITDA and cash positive by the end of the current fiscal year.
In FY20, the company’s sales stood at Rs 2,500 crore.
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