STARTUP GROCERY STORE IS BEATING GROCERY GIANTS IN ONLINE FOOD DELIVERYby Lalaji Goyal Lalaji24into7
Recent years have been the flourishing age for the budding entrepreneurs every day hundreds and thousands of new ideas are thrown in the market which is highly innovative as well as creative. But does everyone survive? The answer to it lies in the choice of business made by the entrepreneur. As mentioned, thousands of ideas come alive every now and then and even a higher number goes out of business. If a startup wants to gain a name in the business market, they have to think smartly. Catering to a lacuna in the market, aiming at a subject which has not been addressed yet is what drives the business. A lot of different areas of business interest have come up in past years, but online grocery is one market which is seeing a major boom currently. Suddenly every big and small eCommerce website wants to be a digital ‘kirane wala’. Highly successful eCommerce giants like Amazon and Flipkart are venturing into the sector of online grocery. Seeing how well the already existing online grocery websites like Big Basket and Grofer are doing, so obviously it is becoming an attractive area to venture into and make some extra profits.
This sudden interest in the online grocery market has been seen due to the pattern on which the industry works. It is a repeat order industry since the customer is bound to purchase groceries again and again. You cannot just stock up your house with groceries one day and then sit back and do nothing for the rest of the month. As the grocery shopping list comprises of essentials, customers, even if reluctantly, are forced to shop again. Exploiting the young generation’s need of ‘everything comfortable’, by making groceries available online, these websites are increasing their customer flow. With varied payment and delivery options, and a highly active ‘online generation’, online grocery proves to be a very promising market in generating revenue.
But the catch here is, the startups that are functioning in this sector are proving to be much more successful than the existing eCommerce giants. Despite the fact that big eCommerce websites like Amazon have a well-established customer base, they aren’t able to make a remarkable profit in the grocery sector. The reason behind it is the nature of the products and the target audience. A big firm like Amazon aims at the entire nation. Providing goods that are highly perishable in nature, to a huge demographics like India is a risky task. Plus they have to maintain an inventory of products to supply to their customers. As mentioned earlier, since the products are perishable, the items in the inventory will have expiry dates. Unlike electronics and apparels, grocery items cannot be stored in for years. This incurs losses, hence making the entire business less profitable, relatively.
The startups somehow don’t face this issue. The major issue with an online grocery delivery startup is a customer network, which takes time to be built. Many online grocery startups work on a model of tying up with the local vendors and wholesalers to provide their customers with the products offered on their website. This bypasses the whole idea of preparing an inventory and the startup can actually direct its major funding in building up an efficient logistics and delivery system, which is what they seem to be doing. A young and intelligent online grocery startup company, these days is focusing on certain basic aspects. They are:
1. Agreements with local grocery producers and wholesalers;
2. A well-managed and established grocery delivery system.
Usually, these two things, if kept in mind and properly executed, results in a successful online business.
Another thing that is giving the startups an edge over big online grocery firms is the targeted audience. Due to the limitation of funding and budgeting issue a startup begins with an entire focus of serving the customers of just one city. This, in fact, works perfectly in favour of the growth of the startup. A smaller, focused demographics is the key to understanding a newly set business. If a young startup begins with the goal of serving the customers of the entire nation, or maybe even two or three major cities, they might fail badly. It becomes difficult to catch a loophole in the system with a huge mass to cater to, and by the time you reach to the solution, a new problem might make its way in. this also consumes a lot of the cash flow and hence results in the early liquidation of the company shares. By the time the startup gets successful, you are hardly the owner of your company.
A startup with small demographics to cater to can actually manage each and every step at a personal level. They can monitor the purity and authenticity of the goods, track the delivery status, and make sure that their customers are getting whatever is actually being shown on their website and mobile app. A satisfied customer base, at the initial stage, is better than a large customer network. With satisfied customer base, these new online grocery startups are gaining popularity in the major cities of the country. Popularity amongst the masses means advertising, which drives in funding and ultimately results in the growth of the business.
The startups also make sure that they establish themselves in major metropolitans like Delhi/NCR. As a basic rule of economics, if there is a need there is a demand, and hence there will be a business. These startups take the advantage of the young generations craze for technology and longing for comfort and convenience. Delhi/NCR is an area where major multinational companies have been established. Hence almost the entire city is always busy. Being busy serves in the favor of these online grocery store startups. They provide their customers what they are looking for. With multiple payment options like debit/credit cards, eWallet, and cash on delivery and multiple delivery options include dedicated hourly time slots, startups have revolutionised how people used to think about grocery.
Indeed it is still difficult to compete with people who have been in this business for ages, but going by a rational approach the day is not far when the startups will be ruling the online grocery market.
Created on Aug 1st 2018 06:37. Viewed 239 times.