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Spencer’s Retail to enter ecommerce with Meragrocer acquisition

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.…

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I'm a MediaNama alumna from 2015-16 (remember TinyOwl?) now back to cover e-services like food and grocery delivery, app based transport and policies, platforms and media in India.

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