Many emerging start-ups like BigBasket and PepperTap have started to acquire the market with their services of providing food and groceries right to your doorstep. Providing over more than 14,000 products all over from pulses to dairy and eggs and all that too online is no small thing. These startups have slammed the accelerators and are working hard and consistently to grow over into the deepest of valleys and every street in their working region.
The major challenges
Where a grocery store could be managed by hiring a “chotu” for approximate Rs. 9000-10000 it is the delivery person that have become a hot commodity. There has been an approximate increase in 1.5% times the salary of a common feet-on-the-street delivery man.
Risk capital-rich hyperlocal ventures, which see themselves as the next big thing in India’s bustling e-commerce industry, are dependent on these delivery persons and the time that is taken to deliver the items. His usual target is to achieve a delivery of 25-28 in a day but practically only 15-20 could be carried out due to lame traffics.
The other problem is that these riders don’t come cheap. Delivering the product at all times in rain and sun is no easy task and hence the high pay check requirement.
The growth expectancy
Despite of all those drag-downs, there is no reduction in the zeros of dollars invested by the investors. They have fuelled millions of dollars into these start-ups and are looking forward for more. According to one estimate from Tracxn, a provider of data on the start-up space, some $130 million was invested in 28 rounds in the past six months in this space.
Investors too are hedging their bets on this industry. “The primary concern is the ability of these entrepreneurs to build and run large scale a blue businesses,” says Mayank Khanduja, an executive director at SAIF Partners, an early-stage investor.
Besides the goal of providing the best quality product these start-ups need to cover the market with millions of customer on their platform generally comprising of apps nowadays. As of August 2015, BigBasket raised $100 million in fundraising rounds led by Zodius Capital and Helion Ventures. The company is currently valued at a billion dollars.
Taking the example of Hari Menon, he has built and made BigBasket India’s largest online grocery store within a time span of just four years delivering about 7-8000 deliveries all across the eight major cities of India. Even as he charts a bold plan to expand to 50 cities by March 2016, he’s rethinking the way BigBasket will do business.
In June 2015, the company acquired Delyver as the wellfuelled grocer made a move to address the emergency and quickly perishable products such as bread and eggs. “We want to have 60 such locations to enable this delivery.” While these emergency purchases account for 33-35 percent of online grocery purchases, BigBasket wants to try to control the entire monthly purchase cycle of its consumers.
Even though BigBasket is busy providing the groceries at home, another e-commerce biggie ZOMATO is busy in establishing its market by online FOOD Delivery, by making investments in Grab and Pickingo.
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