E-Grocery Opportunities 2014

E- GROCERY MARKET IN INDIA

1

D’Essence Consulting

[email protected]

022-2834 7425

303, Aar Pee Center , 11th Road,

MIDC , Andheri (E), Mumbai-

400093

mailto:[email protected]

Unorganized92%

Organized8%

Distribution

Food & Grocery

60%

Other40%

Market Segmentation

1.6

8.8

0

5

10

FY12 FY16

Expected Sales Growth (USD Bn)

•Globally, e-grocery market is growing nearly 7

times

faster than on-ground format

•India is the sixth largest grocery market in the

world

•Indian e-grocery market growing at a rate of 19%

YoY

•30-40% of the business will be in the online retail

space in the next 5 years

Source: Technopak, Deloitte report, D’Essence analysis

INTRODUCTION

E-COMMERCE

2

Indian Retail

Market, $500 Bn

69%

31%

Buyers , April 2012

Male

Female

Source: SOGS , April 2012

63%

37%

Buyers, Sep 2011

Male

Source: SOGS , Sep 2011

24%

45%

30%

1%0%

10%

20%

30%

40%

50%

18-24 years 25-36 years 36 years &above

Below 18years

Buyer Age ProfileSource: SOGS , April 2012

•24 years and above age group constitute over 75% of actual online grocery buyers

•Online grocery buying not a youth activity

•Restricted to working professionals and mature family environments

WHO IS BUYING?

Male Vs Female

Buyer Age Profile

3

580

522

551

480

500

520

540

560

580

600

Men Women Average

Value of Shopping bag (INR)

• Interesting fact, age group 18 to 24

emerge as the largest shoppers

segment

• The average spend for them

Men – Rs 602

Female – Rs 614

5.55.1

7.9

5.5

8.3

6.8

9

5

0

2

4

6

8

10

18-24years

25-35years

36 years &above

Below 18years

Number of products in shopping bag

Male

Female

• Women have outshone men in

terms

of branded products bagged

across all

significant age groups


WHO IS BUYING?

4

19

30

4

25

22

0 10 20 30 40

12 PM - 4 PM

6 AM - 12 PM

12 AM - 6 AM

8 PM - 12 PM

4 PM - 8 PM

Order timing for shopping

Percentageof online…

• More than 90 % orders are

for

same day delivery

16.77%

13.55%

13.55%

12.50%

12%

14.99%

16.57%

0.00% 5.00% 10.00% 15.00% 20.00%

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

Sunday

Order Density

Percentage ofOrders over theweek

• Interesting aspect the buying behavior as well spread across the week


WHEN DO CUSTOMERS SHOP?

5

Sr

N

o

Brand

1 Aashirvaad (6.25%)

2 Saffola (4.36%)

3 Pampers (4.29%)

4 Amul (4.29%)

5 Everyday (3.28%)

6 Dettol

7 Sundrop

8 Nescafe

9 Fortune

10 Haldiram

Top 20 Brands by Value


• Top 20 brands make 50.21% of

the total

value of the products sold online

WHAT IS BEING BOUGHT?

Sr

N

o

Brand

11 Surf Excel

12 Britannia

13 Frooti

14 Shakti Bhog

15 DIvss

16 Ariel

17 Brook Bond Red

Label

18 Wintex

19 Natur Fresh

20 Ahaar

Sr

No

Brand

1 Amul (4.24 %)

2 Aashirvaad (2.79%)

3 Maggi (2.75%)

4 Treat (2.47 %)

5 Haldiram (2.47 %)

6 Good day (2.42 %)

7 Big Babol

8 Nutri Choice

9 Mother Dairy Milk

10 Wintex

Sr

No

Brand

11 Britannia Cakes

12 Aliva

13 Fortune

14 Nescafe

15 ACT 2

16 Dettol

17 Shakti Bhog

18 Lays

19 Ahaar

20 Sunfeast

Top 20 Brands by Volume

• Top 20 brands make 37.56% of

the total

volume of the products sold

online6

WHAT IS GOING INTO SHOPPER’S BAG

16.81%

13.70%

9.69%

5.89%5.46%5.19%

4.66%

4.64%

4.43%

4.02%25.53%

Shopper’s Bag by value

Rice, Atta, Lentils &DalEdible Oils

Coffee , Tea & Cocoa

Milk & Dairy Products

Baby & Child Care

Biscuits & Cookies

Laundry Supplies

Household & Cleaning

Cereals & Breakfast

Snacks

• The top 5 categories make up 51.53% of the total value of products ordered

online by value

• The top 5 categories make up 50.64% of the total products ordered online by

volume

17%

10%

9%

8%7%

49%

Shopper's Bag by Volume

Biscuits &Cookies

Rice, Atta,Lentils & Dals

Snacks

Milk & DairyProducts

Chocolates &Sweets

Others

Source : SOGS,2012

7

E-grocery Players in Indian Retail

Market

8

Key Players in Indian E-grocery MarketKey Players Location Business Model Delivery Slots

Minimum Order for

Free Delivery Funded

Aaramshop.com All India Aggregator 24*7 Rs.500 Yes

Farm2Kitchen.com All India Integrated Supply chain Processed within 1-3

days Rs. 500 No

MyGrahak.com Delhi –NCR Integrated Supply Chain 24 Hr Delivery & 24*7

Support Rs 1000 No

Callandorder.com Mumbai Integrated Supply chain Next Day Rs 500 No

EkStop Mumbai Integrated supply chain 9 am to Midnight Rs 400 Yes

TopTomato Bangalore Integrated supply chain 7am to 11 pm Rs 1000 No

Atmydoorsteps.com Bangalore Integrated supply chain Same & Next Day Rs 500 No

BigBasket.com Bangalore Integrated supply chain Same & Next Day Rs.1000 Yes

ZopNow Bangalore Integrated supply chain 7am to 10 pm Rs 500 Yes

VeggiBazaar.com Chennai Integrated supply chain3pm-9pm, Next

Business day Rs. 150 No

LocalBanya MumbaiIntegrated supply chain

7 am to 9 pm Rs. 500 Yes

Freshetarian Jaipur Integrated supply chain Same Day Rs. 500 No

Source: D’Essence analysis

9

Product Portfolio Of Key e-Grocery Players In India

Key Players Grocer

y

Fruit&

Vegetable

Confecti

onary

Dairy

product

s, Eggs

Organic

food Non-Veg

Beverages

& snacksPet food

Home

care

Personal

Care Toiletries

Aaramshop √ √ √ √ NA NA √ NA √ √ √

Farm2kitchen NA NA NA NA √ NA NA NA NA NA NA

MyGrahak √ √ √ √ √ NA √ √ √ √ √

Callandorder √ √ √ √ NA NA √ √ √ √

Ekstop √ √ √ √ √ √ √ NA √ √ √

TopTomato √ NA √ √ √ NA √ √ √ √ √

Atmydoorsteps √ √ √ √ √ √ √ √ √ NA NA

BigBaskets √ √ √ √ NA √ √ NA √ NA NA

Zopnow √ √ √ √ √ NA √ NA √ √ NA

Veggibazaar √ √ √ √ √ NA √ NA NA NA NA

Freshetarian √ √ √ √ NA NA √ NA √ √ √

Zopnow √ √ √ √ √ √ √ √ √ √ √

LocalBanya √ √ √ √ √ √ √ √ √ √ √


10

AaramShop - Business Model

Step 1

• Register on AaramShop as Preferred shop in the locality

• Registration is free for retailers at Aaramshop

Step 4

• Retailer get an email of the customer’s order

• Prepare an order and verify customer credentials

Step 2

• Customers choose grocery products at Aaramshop

• Add it to shopping basket

Step 3

• Choose a AaramshopKiranas from their neighborhood

• Indicate preferred time of delivery

Step 5

• Deliver order to customer

• Take cash on delivery

Customers Local Grocery

Store


11

AaramShopR

evenue

Genera

tion • Aaramshop neither charges to

consumer nor grocers

• Generate revenue from ads , special offers

• Aaramshop generate lots of data in which FMCG companies are interested

• Sharing the intelligence with FMCG companies is a revenue source for Aaramshop

Ad

va

nta

ge

of

this

B

usin

ess M

od

el

• Highly Scalable

• Leverage technology

• No worries about inventory, stock-out

• No need to manage logistics

• Present across 35 cities in India via a network of 3260 Aaramshops


12

INTEGRATED SUPPLY CHAIN MODEL

Custom

erOrder

gets

processed

at

Warehous

e

Online

Portal

Call

Center

Whole

Seller

Manufactur

er

Procureme

nt

Deliver it

to

Customer


13

KEY CHALLENGESKEY GROWTH DRIVERS

Building

Customer Base

Key

Challenges

•Increasing number of working population

•Rapid urbanization and growing trends

towards

nuclear families along with growing

population of

working women

•Increasing disposable income

•Rise in internet penetration, growing 3G

subscriber

base and growth of internet enabled

devices

•Increasing use of social media

•Increase in penetration of debit cards ,

credit cards

•Increasing reliability on online payment

services


14

15

INVESTORS PICK

• BigBasket raised $ 3 million from a Singapore based

private investor

and ready to launch its operation in Delhi NCR ,

Chennai and Pune.

BigBasket is looking for next round of investment of

about $40- $50

million

• Greencart.in, Mumbai based fresh fruits and vegetable

shop has

raised $1.5 million in Angel funding from Techno group

• In July 2013, LocalBanya raised funds from BCCL’s

springboard fund

and in January 2014, LocalBanya had secured

undisclosed funding

from Karmvir Avant Group

• Unilazer Ventures bought 25% stake in EkStop in

January 2014

• ZopNow has investors like Times Internet , Accel

Source: vccircle.com , business-standard.com

16

D’Essence Consulting is a Management Consulting, Business Strategy and M&A Advisory firm

Build GrowRemain

CompetitiveM&A

Advisory

303, Aar Pee Center, 11th Road, MIDC, Andheri (E), Mumbai- 400093

www.dessenceconsulting.com

+91 22 28347425

[email protected]

Services

• Market Entry & Growth Strategy

• Business Plans & Financial Projections

• Start-up Acceleration Services

• Market Assessment

• B2B Market/Consumer Insights

• Solutions to transform Food and Retail Sector

• Access to Capital through our Investor Network

D’Essence Consulting Services

http://www.dessenceconsulting.com/

mailto:[email protected]