AaramShop, a Delhi based startup, is looking to monetize online grocery shopping in a rather unusual manner: instead of retailing groceries themselves, they're tying up with mom-and-pop (kirana) stores and taking orders for them for free, while charging brands for promoting their wares to those online. The company claims to have tied up with 1600 stores in 24 cities within 7 months of operation, and is averaging. Aaramshop has been founded by Vijay Singh, who had previously founded of Sercon, a below-the-line marketing services firm which was merged in 2008 with 141 Worldwide, a WPP owned agency, to form 141Sercon. Singh led 141Sercon as its CEO and Managing Director, before exiting in April 2011. Speaking with MediaNama, Singh explained the rationale behind this decision to choose advertising as a business model: The Challenge Of Grocery Selling "In the last 16-17 years, grocery has not been successful in the eCommerce space anywhere in the world. A typical eCommerce model will not really work out for grocery. Books and apparels have higher retail margins - 50-60%. It's very different in the grocery business because FMCG retails with a single digit margins. For food products, it is 6-7%, cosmetics is 8%-9%, and perishables and temperature sensitive items like butter and liquids need warehousing. Also, in books, the basic issue is of distribution, whereas FMCG goods are the best distributed in the world and what the neighborhood consumes is available in the retail shops. We don't want to get into something that doesn't need fixing. Aaramshop is…
