The grocery delivery platform Grofers aims to garner $2.5 billion (around Rs 17,500 crore) in revenue by 2020 as it scales up its private label offerings in the country and focusses on expanding repeat purchases in its platform.
The company, which has recently completed five years of its operations, has a revenue run rate of $360 million (about Rs 2,500 crore) currently.
Grofers co-founder and CEO Albinder Dhindsa said Grofers has been witnessing over 30% month-on-month growth.
“While we do not sell gourmet products that usually offer higher margins, we have been able to create a set of dedicated customers that usually promote our brand as well… We will continue to ramp up our business and we aim to clock $2.5 billion revenue by 2020,” he said.
Outlining the expansion strategy, Dhindsa said about 40% of the selection on its platform now comprises of private label products.
“There are a number of local manufacturers, who have great products but can’t compete with the FMCG giants and therefore, their products often don’t find shelf space in retail stores…we continue to grow the number of manufacturers that we work with,” he said.
He further explained that putting these private labels on its own platform has helped the company provide aspirational products like muesli, peanut butter at more affordable prices.
These private labelled products are also making their way on retail shelves at Grofers’ over 1,500 partner stores, which the company aims to ramp up to one million in the next two years.
Grocery segment accounts for a significant portion of the unorganised retail segment in the country. With people becoming comfortable buying even milk and bread online, the online grocery segment is projected to witness a strong growth over the next few years in India.
As per the estimates, e-tail is just 0.5% of the total grocery market in India, which is pegged at $400 billion or 70% of all retail.