Scaling back its fresh products, online grocery delivery company, Grofers has forayed into the FMCG segment with the launch of seven new brands under two categories – Budget and Popular G-Brands.
In a statement, Grofers’ co-founder and CEO Albinder Dhindsa said that the company’s foray into the FMCG segment will differentiate it in the e-grocery business. “This vertical expansion is key to drive our next phase of growth in India.”
According to this Livemint report, food and food products accounted for 70% of Grofers’ sales. Grofers closed FY 2018 with Rs 950 crore of sales and is targeting for a stronger growth trajectory in 2019, with a 50% contribution from its private brands. The company is targeting revenue of Rs 2500 crore and roll out of over 500 stock keeping units (SKUs) for FY 2019.
Grofers claims that its range of private label products is priced at approximately 5% to 50% lower than the market price. The online grocer said that with this launch its private label expands to 250 food and non-food products for its consumers and that it aims to bring 100 million customers to its platform.
Grofers has apparently scaled back its fresh grocery operation in the cities like Bangalore and Delhi. When we tried ordering some veggies, we could only see two or three items like onion, and potatoes. This is not the first time that the company has adjusted its focus amidst of competitive market. Earlier Grofers had shut operations in Ludhiana, Bhubaneshwar, Bhopal, Cochin, Vizag, Nagpur for a year in 2016, and then restarted operations in five out of the six cities last year.
Grofers developments
In March, it raised Rs 400 crore ($61.6 million) in a fresh funding round led by SoftBank, and other existing investors. The total funding raised by Grofers now stands at around $226.5 million currently.
In July 2017, Grofers received the final approval from the Department of Industrial Policy and Promotion (DIPP) to stock food and food products and sell it through both online and offline channels.
Why?
As the CEO said, to differentiate (battle fierce competition) in the e-grocery segment. In India, only Amazon, BigBasket and Grofers have the government’s approval to retail food products manufactured and produced in India.
Note that, e-commerce major Amazon is betting big in this space. In June, Amazon has infused Rs 10.5 crore in its Indian food retail arm Amazon Retail India. Amazon offers groceries via two platforms, Prime Now and Amazon Pantry. Amazon Retail India is a vendor for grocery items listed on both the platforms. In July 2017, Amazon received government of India’s approval to invest $500 million in the food retail segment. The name of the service by now was changed to Amazon Now.
Besides, Amazon opened 15 new Fulfilment Centres (FC) for its app-only hyperlocal grocery delivery service Prime Now (earlier Amazon Now). The new FCs are equipped with temperature controlled zones, to store perishable products such as fruits & vegetables (F&V), dairy products, chilled & frozen products. Besides this, the centres stores smartphones, laptops, kitchen appliances, other consumer electronic products, beauty products and household supplies.
Kishore Biyani-led Future Group is reportedly set to start its hyperlocal grocery delivery soon, an it will deliver items like milk, eggs and bread, and later users will be able to get fresh fruits and vegetables along with other grocery items.
