Spencer’s Retail, the supermarket chain owned by the Goenka Group, has acquired the online grocery store Meragrocer for an undisclosed amount, reports ET. Spencer’s will make Omnipresent Retail, Meragrocer’s parent company into a wholly owned subsidiary. The report cited Shashwat Goenka, ecommerce sales and sector head of Spencer’s as saying that the company was eyeing a gross merchandise value (GMV) of Rs 500 crore from e-commerce in the the next 5 years.
Goenka added that apparently, the cost of acquiring Meragrocer was much lower than what would take to set up a greenfield operation for ecommerce. Meragrocer, which operates only in Delhi and Gurgaon, has a GMV of Rs 5 crore. Spencer’s Retail is running losses of Rs 2 crore every month, down from Rs 9.5 crore every month 5 years ago and with the acquisition, the company aims to break even sometime in the near future.
The acquisition will allow the group to go omni-channel in Spencer’s present markets and may start selling on Flipkart and Amazon (and also hinted at in February) as indicated by another ET report. Spencer’s stores will become warehouses and servicing points. It is unclear if Spencer’s is looking to convert all of its stores into warehouses across cities. According to a Hindu report, Spencer’s’ online model will start operating on a full scale from April 2016, while DNA reports that Spencer’s will scale up Meragrocer by the first quarter of 2017.
As of now, Spencer’s has 122 stores across 35 cities in India. According to a Mint report, the company reported a net loss of Rs 151 crore on revenues of Rs 1,672 crore in 2014-15. The company expects sales to grow at 10-15% in the current year.
Meragrocer was founded by Saurabh Chadha, Manoj Kumar and Dinesh Paul in 2011 and sells fruits and veggies, non veg food, grocery items, health care and household items. It claims to have 5,000 products from 500 brands, for which users can pay by cash, card or net banking. It also has a Mera Wallet where users could store credit for using on the website or apps, along with a team of delivery personnel and vehicle fleet for delivery.
The e-grocery space has been abuzz with developments this year:
– In the same month, Indian Grahak, the Kolkata based online supermarket, acquired online hyper-local marketplace Dyscover in a cash and stock deal.
– In October, Flipkart launched a new grocery app called Flipkart Nearby for Android users.
– In September, Delhi-based AUTOnCAB, a cab and auto booking service, acquired the Gurgaon-based online grocery delivery startup BigZop in a stock and cash deal.
– In the same month, PepperTap raised $36 million in Series B funding from multiple investors.
– In August, Bangalore-based online grocery store BigBasket raised $50 million in a round of funding. In June, it acquired the hyper local delivery startup Delyver in a cash and stock deal for an undisclosed amount.
– In July, Ola launched a standalone application for hyperlocal groceries delivery called Ola Store.
– In June, mobile-first grocery delivery marketplace JiffStore raised additional funding from existing investors Unitus Seed Fund and Times Internet.
– In May, local search listing platform AskMe acquired the online grocery marketplace Bestatlowest.com for and undisclosed amount.
– Godrej Group’s premium food products retailer Nature’s Basket had acquired Mumbai-based online grocery store Ekstop.com in February this year, and later integrated it into Nature’s Basket’s online store.
– In the same month, Paytm e-grocery app called Paytm Zip became available on the Google Play Store.
Our online grocery coverage here.