Online Grocery Business In India

By Author: Atanu Ghosh
Total Articles: 1
Comment this article

E-commerce has started a second innings in India since early 2000. Some products seem to be doing good this time.

Online grocery has been a late entrant in e-commerce space in general (probably albeit due to early failure stories like Webvan), and in India, in particular. However, since 2011, quite a number of start-ups have launched online grocery stores all across India. They are generating reasonable amount of traffic and interest as well as good amount of venture capital funding.

One of the sites that especially drew my attention was Salt n Soap (www.saltnsoap.com). Apart from offering what conventional online grocery sites have to offer (i.e. online purchase, home delivery, discounted products, etc.), they have come up with quite a few innovative and engaging products and services that will catch attention to discerning customers.

First, they are positioning online grocery services to "cash reach, time poor" segment of population, typically SEC A1 and A2 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.

Salt n Soap seemed to have understood that online shopping and especially grocery shopping is not about just providng 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 personalised assistance to consumers in buying through qualified professionals.

Another interesting feature in Salt n Soap is the concept of "Open Analytics" that they seem to have pioneered in e-commerce space. 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 (Socio Economic Class). 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 (presumably reasonably accurately) the number 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 front end of Salt n Soap is like that of a conventional e-commerce site. I am not very sure on how the general consumer will accept this. However, I find that they seem to have put a lot of research on the fact that the way people shop grocery online is different from the way people shop for books, apparels or watches. While in the latter case, a consumer is typically expected to shop one time at a time, in case of grocery most consumers will shop for multiple items at a time (think of mother's "grocery list"). 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.

One area that I found Salt n Soap needs to improve upon is the photographs of the products. Many products do not have photographs (probably they are building it up) while many others are not really up to the mark.

It still early days for online grocery, especially in India. The success of online grocery stores like Salt n Soap will depend largely on how effectively they are able to develop the market for online grocery in India and then market their product.

Needless to say, all grocery websites including Salt n Soap must have an impeccable streamlined logistics backend, since people expect grocery delivery within hours, while they may be prepared to wait longer for books, apparels or watches. Delivery cost and low margin are known challenges in this business and it depends a lot on how these websites maneuver these challenges to set up a profitable and growing business.