Online grocers like Amazon’s Kirana Now and LocalBanya turn focus on timely delivery

Amazon’s started ‘Kirana Now’ programme, which promises to deliver orders from small local stores in 2 to 4 hours time, was launched recently as India’s budding online grocery retailers are increasing focus on ontime delivery instead of large building warehouses.

The service offers convenience to end users and increases business for neighborhood stores. It is also lesser cost for entrepreneurs to set up and can be scaled up fast.

The co-founder and CEO of LocalBanya Mr. Karan Mehrotra said that ”3-year-old online store LocalBanya, operating in Hyderabad, Mumbai and Pune, , does over 1,000 orders per day and plans to launch delivery services in 12 other cities in 2015.” “Thislast 15 years, modern trade and other unorganised players have pumped in about 90% of their investment into first-mile supply chain and inventory-based warehouses.”, whereas no one had really been able to solve the issue last-mile distribution and delivery to the end user. Instead of competing, we wouldrather partner with them and focus on innovating in the areas that need focus in the industry.

Amazon said last week it will start deliveries from kirana stores in few areas of Bengaluru for consumers who submit orders from their mobiles. ZopNow has shifted its focus from owning warehouses to delivering for HyperCity stores.

Delivery-based models are with lesser asset base by default, making it easier to scale up in an industry that traditionally has hugefinancial entry barriers.

The co-founder of ZopNow Mr. Mukesh Singh said that “From a company perspective, this is much more capital efficient,” . The company spent over a million dollars to set up each warehouse whereas now, it takes only $15,000 to $20,000 to start delivery operations in a city.,

After transitioning itself into a delivery-based model, ZopNow has been gradually growing at 25-30% month-on-month in overall volume with a 75% customer retention rate. Anand said that “With this model customer will also benefits, according to Abheek Anand, principal at Sequoia Capital, which provided seed funding to Grofers another on-demand delivery startup.” The company is able to offer terrific customer experience with just 90-minute delivery and generate new business for the neighbourhood stores, all thi while scaling quickly across India,.”, Grofers had already grown to Delhi NCR, Bengaluru & Mumbai within just 3 months. “Most inventory-based models take years to do the same.” Grofers recently raised $10 million (about Rs 63 crore) from Tiger Global.

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