Online grocery delivery startup Grofers has restarted operations in five out of the six cities it had shut operations last year. The company had shut operations in Ludhiana, Bhubaneshwar, Bhopal, Cochin, Vizag, Nagpur for a year. Currently, service is back in all these cities except Vizag.
Interestingly, Albinder Dhindsa, co-founder of Grofers, told MediaNama that operations in the cities were restarted in January 2017. Operations in the cities were shut in the cities as the company wanted concentrate on the core cities and get the unit economics right.
Dhindsa said that Grofers now serves 13,000 customers each day , the company also claims their average order size has increased from Rs 550 in January last year to Rs 1300 currently. In the cities where operations were shut the company serves around 1600 customers each day. Dhindsa however, did not mention how many orders it served each day before shutting services or the average order size.
Grofers is currently operational in Delhi, Gurgaon, Mumbai, Bangalore, Kolkata, Noida, Pune, Ahmedabad, Chennai, Hyderabad, Jaipur, Lucknow, Surat, Chandigarh, Kanpur, Agra, Indore, Nagpur, Ludhiana and Vadodara. In addition, through the app services are available in Bhubaneshwar, Madurai, Bhopal, Cochin, Agra and Ranchi (these cities are not available on web but customers can access them from Grofers app).
Grofers has partnered with offline FV stores to act as delivery centers for them. The company also supplies fruits and vegetables to offline stores. Along with this, Grofers has set up self help snacking outlets inside four offices in Delhi-NCR region. The company has partnered with one of its merchant for this. However, Dhindsa did not mention the merchant or the offices. According to unconfirmed reports, one of the offices where the shop is set up is OYO Rooms.
Grofers like many other hyper-local delivery startups has been incurring major losses. In June last year, it fired 10% of its workforce, citing ‘general slowdown in activity’. The company in October moved from an app only model to app and website. Grofers was incurring losses of Rs 24 lakh each day in July last year, as indicated by Financial Express. Post this the company also changed its delivery model in December where it started using four wheeler for deliveries. For the year FY16 it had reported loss of Rs. 225 crore and a revenue of Rs. 14.3 crore according to a report in Hindu BusinessLine.
In November 2015, Grofers had raised $120 million in funding from SoftBank, Russian entrepreneur Yuri Milner, with participation from existing investors Tiger Global and Sequoia Capital. Last year, Grofers acquired B2B logistics service provider Townrush, SpoonJoy and My Green Box.