Warc, 24 September 2014
NEW DELHI: India has seen a sharp rise in the number of
online grocery sites as internet usage grows and time-poor urban consumers
explore new shopping options.
A report from the US Department of Agriculture, reported by
the Indian Express, said that the number of such outlets had tripled in the
past year, from 14 to 44, and would continue to grow alongside the increase in
internet users and the changing shopping preferences of a younger, professional
demographic.
Most currently operate in individual cities and are
effectively in competition with kirana stores – local independent outlets, many
of which already provide a near-equivalent service, with quick home delivery
and credit extended to trusted consumers.
Compared to these stores, online retailers will need to
overcome delivery challenges, the report said, but a mixture of keen pricing
and convenience – both in terms of payment options and time saved – means that
more consumers are prepared to overcome a reluctance to buy products unseen and
to trust the safety of online transactions.
While the range of products offered by these sites is
largely domestic, there is a clear trend towards introducing more international
brands. One such site, LocalBanya, now offers a variety of cheeses for example.
It reports that around 10% of its revenue comes from its international
portfolio and this is growing at 25% a month.
According to Pragya Singh of Technopak consultants, the fact
that grocery is largely a standardised category is helping attract people
online. "This also presents an opportunity to tap niche or imported
products," she told the Business Standard, "since consumers do not
have easy access to such products and, hence, there is a higher propensity to
buy online."
Hari Menon, founder of the BigBasket site noted another
factor. "We see high demand for packaged imported foods and cheeses among
the expatriate community in cities like Bangalore, where a lot of foreign
information technology executives live," he said.
His business is expanding rapidly, and expects to be present
in ten cities within the next year , with as much as 20% of the products it
carries being imported.
Data sourced from Indian Express, Business Standard;
additional content by Warc staff
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