Online grocery stores in India
This case study Involves three retailers that engaged In alternative approaches to grocer strategy formulation. The primary goals were to assess the relationship between a company’s business model(s) and its performance in the online grocery channel and to determine if there were other company and/or market related factors that could account for company performance. The first company is Basket currently present in Iambi, Hydrated and Bungalow.
The other one is Armholes which Is a website that operates In National Capital Region of India and offers FMC ND CUP goods and the last one Is Salt n Soap, Online Grocery Store In Kola operating out of Kola. First, we seek to achieve Insight into how uptake of Internet- based grocer relates to management orientation and find relationships between the uptake of Internet-based grocer and entrepreneurial orientation, competitive intensity, and IT maturity.
BASKET Overview: Basket. Com is Indian’s largest online food and grocery store.
It has over 10,000 products ranging from fresh Fruits and Vegetables, Staples, Spices and Seasonings to FMC branded products, Beverages, Personal care products, Meats ND much more. The order is delivered right to the customer’s doorstep, anywhere in Bungalow, Iambi ; Hydrated. Within a year, the company is planning to start services in Delhi and Achaean as well.
Subsequently, it also plans to cater to Pun, Metadata and Kola. The customer can schedule their delivery date and time. Payment options include cash on delivery, credit and debit cards or food coupons.
The Company is co-founded by V. S. Southward, Harmon, Pull Parker, Bambina Chuddar and V S Rammers. Basket’s Board of Directors include Mean and Ganges K of Tutor-vista. The average monthly order size stands at RSI 1,500.
Since its inception, the company has seen demand grow 25-30 per cent on a month-on-month basis. Business Model: Once a customer registers on Basket. Com he can browse the wide range of products, select the products he wants and place an order online.
Internally the products are then picked, hygienically packed and levered to the customer in the time slot selected by the customer. Basket has tie-ups with manufacturers, wholesalers and importers and the merchandising teamwork on a combination of post order procurement and in house stocking. The service is unique as it lets customers shop for daily essentials from the comfort of their homes, saving them time, effort and money.
The company provides high quality products at competitive prices along with an on time delivery guarantee.
There are two operating models. It is called just-in-time model. This means that not just perishables but everything they bring against an order. So they consolidate orders for the day, go and buy the products and deliver. When they reach a particular volume, they move from the Just-in-time model to what is called the warehouse stocking model.
I Nat Is winner teeny are as Tar as Bungalow Is concerned. I nee Duty products directly from the supplies, like Milliner and Procter & Gamble, they buy from farmers and mills and stock the products in the warehouse.
They stock a certain number of days of sales, depending on the product and sales. They are able to set initial inventory levels and then decide what the re-ordering levels are. So it is all impolitely automated. Analysis: Basket’s business model relies on on-time delivery of goods, and in order to manage the operations smoothly and efficiently, it uses the hub-and-spoke mode of distribution.
Here wholesalers deliver goods to Basket’s warehouses. Branded delivery vans then deliver these goods to the consumers.
Perishables are only warehoused for a matter of hours, and in some cases it’s 24 hours from farm to fridge. It handles 1,500 plus orders a day in Bungalow and 700 plus orders a day in Iambi and Hydrated. The grocery store banks on technology-driven solutions to rack everything from the time an order is placed to delivery.
Basket uses Sidetracks Restart interface to tightly integrate with the ERP system and handle all movement of trucks and delivery vehicles, notification to customers on estimated delivery times, etc. Streetwalker’s real time location data helps achieve optimal vehicle utilization.
ARMHOLES Overview: Armholes is a hybrid retail platform that enables sales and marketing of FMC/CUP brands to “short on time – high on stress” consumers. It enables grocery shopping by leveraging the strengths of the neighborhood retailers and integrates hem with opportunities provided by the internet. Armholes was founded by Visas Sings, who, as an entrepreneur, has a deep focus and passion for brand marketing. Head-quartered in New Delhi, Armholes is a small team of techies and marketers that have been operational since a little less than a year.
Over 1900 retailers across 26 cities in India use Armholes as their preferred commerce platform. Their tie-ups with retailers are based on mutual strengths. The retailer has a time-tested local presence, which includes an ability to deliver goods to the doorstep of the consumers n his catchments area. They intend to add to this strength with the increased accessibility of the shop on web and mobile devices. This is done at no additional cost to the retailer.
Armholes currently lists over ask SKU. Only branded products are listed in Armholes; commodities and private labels are excluded from their platform.
The core idea of Armholes is to enable independent retailers, who have a physical presence, to have a web-store, which allows them to connect better with modern consumers. Business Model: The business model of Armholes is different from most e- amerce sites, as they do not believe that transaction based revenues is the way to go in the grocery category at the moment. Armholes does not make revenues on taking part of the margins made by the grocers; rather, they have created a number of premium services that are offered to brands.
These services are in various genres like, advertising options, on and off the platform, analytical led marketing and marketing at the retail point. The idea behind this unconventional and unique business model is that Armholes does not disrupt the existing business practices Ana tenured ensures no escalation AT costs SE Armaments NAS partnered with retailers so that customers can shop at these local retailers online. Once logged in to the site, users can choose a local retailer and shop for groceries. Armholes then sends the order to the retailer in real time.
The groceries are delivered to the customer’s doorstep and the customers pay for the goods upon delivery. They don’t keep any inventory and their partner retailers maintain their own inventories.
There is no cost for the retailer to Join Armholes, they are basing their ability to get revenues by offering premium opt-in services offered to the brands. Analysis: The model does look scalable and rather interesting as compared to regular commerce shopping. There is no logistics cost that the startup incurs and it brings in the comfort of your local store as well.
The only issue is predictability of order delivery as live inventory is not available online. The current format is more like providing one more interface to your regular grocery store, with the same issues and comforts. A more of Ajax functionality would make the shopping process faster and avoid showing shopping bag page after every item is added.
Unlike other online rockery delivery stores that become a threat to the small local businesses, Armholes puts the ball back into the court of local businesses that had begun to feel underprivileged in this age of Internet.
Armholes has overcome three major hurdles of business. It has convinced Cornwallis about the business model by putting them in touch with customers and being paid directly. Secondly, it has convinced customers by eliminating the need for online payments. Furthermore, since customers can choose their own Kirkland, they can be assured of quality. Thirdly, it has cut its own operational costs by eliminating the need to set up an inventory to stock goods or hire delivery boys.
Armholes is a great example of how you can optimize on the available resources to maximize your gains.
Armholes makes most of its money through ads of the numerous grocery brands it stocks on its portal. With a model like Armholes, everybody is a winner – the suppliers, the consumers and the business itself! SALT N SOAP Overview: Salt n Soap, a Bluebells initiative, intends to provide its consumers a convenient, social, enjoyable and rewarding experience of shopping their daily rockery needs online from the comfort of their homes and offices. Started in November 2012, Salt n Soap is owned and operated by Bluebells Solutions ALP. Though the services of booking daily grocery needs online and receiving timely delivery at the convenience of home or office are the basic foundations of Salt n Soap, Salt n Soap is more than Just another online version of a hyper mart, supermarket or a local Koran store. Salt n Soap intends to provide today’s busy urban consumers online tools for making their shopping experience social, enjoyable and rewarding.
Salt n Soap enables this through the various social features of the website, engaging and interesting games and contests.
Salt n Soap comes up with, and, last but not the least, the goldmine of information and analytics that facilitate a smarter buying decision. Apart from tottering want conventional online grocery sleets nave to offer, they have come up with quite a few innovative and engaging products and services that will catch attention of discerning customers. First, they are positioning online grocery services to “cash reach, time or” segment of population, typically SEC AY and AY class of people, working couple with busy work schedule and very little time to do daily shopping chore.
Hence, Salt n Soap position is more on “value” a customer derives by saving time rather than being just a “discount” shop. Business Model: Salt n Soap is a Kola-based outfit that has apparently pioneered the concept of “open analytics” in this space where customers can instantly summon a variety of data on a product like its market share, purchasing trends, and a comparison with what people in the same socio-economic class are buying.
The site also lets you know when it thinks a particular product has run out, thanks to some nifty code, and pings you so you’re reminded to buy more of it.
Consumers have access to a variety of data like market share of a product, purchase trend of a product, comparison of purchase trend with average pattern of people in the same SEC. Consumers can maintain their budget for purchase and track their consumption compared to the budget. Salt n Soap also seem to have developed an algorithm that predicts the umber of days of provision that a user has and thus prompting him/her when he should buy the same product again.
Salt n Soap has integrated their product with social media to provide a social experience to their consumers. Consumers are also rewarded with redeemable points for sharing their shopping experience with their friends in social media.
The website has been designed to enable users to shop through a “list” where he/she can select multiple products from one screen instead of having to navigate to multiple screens. Analysis: They seem to operate efficiently with very low capital investment.
Plus they provide a lot of innovative value added features to consumers which are typically not available in a brick and mortar store. Some such features are a unique web front that allows customers to shop multiple products without having to navigate to many pages, providing personal shopping assistance, helping customers to plan and monitor their grocery budget and inventory, analytics on market share and sale trend of products, etc.
Salt n Soap mimed to have understood that online shopping and especially grocery shopping is not about Just providing a web front to the consumer allowing them to book an order and then delivering the goods to the consumer’s doorstep.
They have introduced the concept of “Personal Shopping Assistance” where they promise to provide personalized assistance to consumers in buying through qualified professionals. Salt n Soap is constantly innovating on the features to ensure a more enriching and meaningful experience for its users. Grocery is a pretty complex business from the back-end and supply chain perspective.