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Gourmet Company Ventures Into eCommerce

Gourmet Company, a venture that offers gourmet food products and gift items recently went online with the launch of its e-store Gourmetco.in. Founded by Sandhya Mittersain and Neerja Mittersain, the online store claims to feature 400 gourmet food products including herbal blend teas, cookies, cereals, jams & marmalades, salad dressings, mustards rare coffees, pastas and Mediterranean food ingredients, among others. By choosing to go online, the company aims to target smaller cities where it’s difficult to find gourmet food products and ingredients, although there is considerable demand. Neerja Mittersain informs us that since the overheads are less when compared to a physical store, the site is able to offer competitive prices and deliver products in a large number of cities.

– Product sourcing: The Gourmet Company claims to have exclusive tie-ups with two gourmet food companies based in UK – “Kitchen Garden Preserves” and “Today Was Fun”, and is currently in discussions with other companies. Neerja informs us that the company also sources products from other suppliers domestically including importers as well as a few local Indian companies that are producing high-end gourmet products primarily with a social element – these products include honeys and cooking herbs.

– Pricing & competing with Physical retailers: According to Neerja, duties on imported food products are currently quite steep in India. However since the company gets good rates from the food companies it works with directly, it is able to make healthy margins while at the same time, it tries to match international prices for the products.

Since the company has the advantage of lesser overheads compared to physical retail stores, it claims that it is able to lower the costs of its products by 10-15% than what physical stores such as Le Marche or Nature’s Basket offer. In addition to it, the company also runs limited time offers where it offers the products at discounts upto 25%. As the company scales up, Neerja said that it intends to pass on some of the cost benefit to its customers. On being asked how the increase in the FDI limit in retail will affect her business, she responded that it will allow easier fund accessibility to grow the business.

– Warehousing & Inventory: The company apparently has its own warehouse in Mumbai and maintains its own inventory. It presently claims to cover 500 Indian cities for delivery and also offers Cash on Delivery as a payment option. The company currently charges a flat Rs 100 as delivery charges per order, however if the order exceeds Rs 2,000, it will provide free shipping for those orders.

– Sales: On an average, the company claims to get around 30 orders in a day, with a single basket comprising of three items, ranging between Rs 600 to Rs 800, in terms of value. When queried on the average cart to checkout ratio for transactions, Neerja promised to get back to us with the number soon.

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– Sales trends by Geography: The sales are currently split between Metros and non-metros in a 50:50 ratio. However since gourmet food items are not widely available in smaller cities, the company hopes that the site will fare well in these regions in the future.

– Funding: The company, which is presently boot strapped, is planning to raise its first round of funding of nearly $3 million and it intends to use it for inventory, warehousing, team building and customer acquisition.

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