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E-Grocery Opportunities 2014

Wit real-estate cost/rental on the rise, e-retail is a popular avenue for entrepreneurs seeking the retail segment. And selling grocery, vegetables and fresh food online is catching up in the tier-I cities closely followed by tier-II cities. Our services and proven expertise can go miles in paving your way to that entrepreneurial dream of starting an e-grocery store.

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E-Grocery Opportunities 2014

  1. 1. E- GROCERY MARKET IN INDIA 1 D’Essence Consulting chandni@dessenceconsulting.com 022-2834 7425 303, Aar Pee Center , 11th Road, MIDC , Andheri (E), Mumbai-
  2. 2. Unorgan ized 92% Organiz ed 8% Distribution Food & Grocery 60% Other 40% Market Segmentation 1.6 8.8 0 5 10 FY12 FY16 Expected Sales Growth (USD Bn) •Globally, e-grocery market is growing nearly 7 times faster than on-ground format •India is the sixth largest grocery market in the world •Indian e-grocery market growing at a rate of 19% YoY •30-40% of the business will be in the online retail Source: Technopak, Deloitte report, D’Essence a INTRODUCTION E-COMMERCE 2 Indian Retail Market, $500 Bn
  3. 3. 69% 31% Buyers , April 2012 Male Female Source: SOGS , April 2012 63% 37% Buyers, Sep 2011 Male Source: SOGS , Sep 2011 24% 45% 30% 1%0% 10% 20% 30% 40% 50% 18-24 years 25-36 years 36 years & above Below 18 years Buyer Age Profile Source: SOGS , April 201 •24 years and above age group constitute over 75% of actual online grocery buyers •Online grocery buying not a youth activity •Restricted to working professionals and mature family environments WHO IS BUYING? Male Vs Female Buyer Age Profile 3
  4. 4. 580 522 551 480 500 520 540 560 580 600 Men Women Average Value of Shopping bag (INR) • Interesting fact, age group 18 to 24 emerge as the largest shoppers segment • The average spend for them Men – Rs 602 Female – Rs 614 5.5 5.1 7.9 5.5 8.3 6.8 9 5 0 2 4 6 8 10 18-24 years 25-35 years 36 years & above Below 18 years Number of products in shopping bag Male Female • Women have outshone men in terms of branded products bagged across all significant age groups Source: SOGS , April 2012 WHO IS BUYING? 4
  5. 5. 19 30 4 25 22 0 10 20 30 40 12 PM - 4 PM 6 AM - 12 PM 12 AM - 6 AM 8 PM - 12 PM 4 PM - 8 PM Order timing for shopping Percentage of online… • More than 90 % orders are for same day delivery 16.77% 13.55% 13.55% 12.50% 12% 14.99% 16.57% 0.00% 5.00% 10.00% 15.00% 20.00% Monday Tuesday Wednesday Thursday Friday Saturday Sunday Order Density Percentage of Orders over the week • Interesting aspect the buying behavior as well spread across the week Source: SOGS , April 2012 WHEN DO CUSTOMERS SHOP? 5
  6. 6. Sr N o Brand 1 Aashirvaad (6.25%) 2 Saffola (4.36%) 3 Pampers (4.29%) 4 Amul (4.29%) 5 Everyday (3.28%) 6 Dettol 7 Sundrop 8 Nescafe 9 Fortune 10 Haldiram Top 20 Brands by Value Source: SOGS , April 20 • Top 20 brands make 50.21% of the total value of the products sold online WHAT IS BEING BOUGHT? Sr N o Brand 11 Surf Excel 12 Britannia 13 Frooti 14 Shakti Bhog 15 DIvss 16 Ariel 17 Brook Bond Red Label 18 Wintex 19 Natur Fresh 20 Ahaar Sr No Brand 1 Amul (4.24 %) 2 Aashirvaad (2.79%) 3 Maggi (2.75%) 4 Treat (2.47 %) 5 Haldiram (2.47 %) 6 Good day (2.42 %) 7 Big Babol 8 Nutri Choice 9 Mother Dairy Milk 10 Wintex Sr No Brand 11 Britannia Cakes 12 Aliva 13 Fortune 14 Nescafe 15 ACT 2 16 Dettol 17 Shakti Bhog 18 Lays 19 Ahaar 20 Sunfeast Top 20 Brands by Volume • Top 20 brands make 37.56% of the total volume of the products sold online 6
  7. 7. WHAT IS GOING INTO SHOPPER’S BAG 16.81% 13.70% 9.69% 5.89% 5.46%5.19% 4.66% 4.64% 4.43% 4.02% 25.53% Shopper’s Bag by value Rice, Atta, Lentils & Dal Edible Oils Coffee , Tea & Cocoa Milk & Dairy Products Baby & Child Care Biscuits & Cookies Laundry Supplies Household & Cleaning Cereals & Breakfast Snacks • The top 5 categories make up 51.53% of the total value of products ordered online by value • The top 5 categories make up 50.64% of the total products ordered online by volume 17% 10% 9% 8% 7% 49% Shopper's Bag by Volume Biscuits & Cookies Rice, Atta, Lentils & Dals Snacks Milk & Dairy Products Chocolates & Sweets Others Source : SOGS,2012 7
  8. 8. E-grocery Players in Indian Retail Market 8
  9. 9. Key Players in Indian E-grocery Market Key Players Location Business Model Delivery Slots Minimum Order for Free Delivery Funded Aaramshop.com All India Aggregator 24*7 Rs.500 Yes Farm2Kitchen.com All India Integrated Supply chain Processed within 1-3 days Rs. 500 No MyGrahak.com Delhi –NCR Integrated Supply Chain 24 Hr Delivery & 24*7 Support Rs 1000 No Callandorder.com Mumbai Integrated Supply chain Next Day Rs 500 No EkStop Mumbai Integrated supply chain 9 am to Midnight Rs 400 Yes TopTomato Bangalore Integrated supply chain 7am to 11 pm Rs 1000 No Atmydoorsteps.com Bangalore Integrated supply chain Same & Next Day Rs 500 No BigBasket.com Bangalore Integrated supply chain Same & Next Day Rs.1000 Yes ZopNow Bangalore Integrated supply chain 7am to 10 pm Rs 500 Yes VeggiBazaar.com Chennai Integrated supply chain 3pm-9pm, Next Business day Rs. 150 No LocalBanya Mumbai Integrated supply chain 7 am to 9 pm Rs. 500 Yes Freshetarian Jaipur Integrated supply chain Same Day Rs. 500 No Source: D’Essence analysis 9
  10. 10. Product Portfolio Of Key e-Grocery Players In India Key Players Grocer y Fruit& Vegetable Confecti onary Dairy product s, Eggs Organic food Non-Veg Beverages & snacks Pet food Home care Personal Care Toiletries Aaramshop √ √ √ √ NA NA √ NA √ √ √ Farm2kitchen NA NA NA NA √ NA NA NA NA NA NA MyGrahak √ √ √ √ √ NA √ √ √ √ √ Callandorder √ √ √ √ NA NA √ √ √ √ Ekstop √ √ √ √ √ √ √ NA √ √ √ TopTomato √ NA √ √ √ NA √ √ √ √ √ Atmydoorsteps √ √ √ √ √ √ √ √ √ NA NA BigBaskets √ √ √ √ NA √ √ NA √ NA NA Zopnow √ √ √ √ √ NA √ NA √ √ NA Veggibazaar √ √ √ √ √ NA √ NA NA NA NA Freshetarian √ √ √ √ NA NA √ NA √ √ √ Zopnow √ √ √ √ √ √ √ √ √ √ √ LocalBanya √ √ √ √ √ √ √ √ √ √ √ Source: D’Essence analy 10
  11. 11. AaramShop - Business Model Step 1 • Register on AaramShop as Preferred shop in the locality • Registration is free for retailers at Aaramshop Step 4 • Retailer get an email of the customer’s order • Prepare an order and verify customer credentials Step 2 • Customers choose grocery products at Aaramshop • Add it to shopping basket Step 3 • Choose a Aaramshop Kiranas from their neighborhood • Indicate preferred time of delivery Step 5 • Deliver order to customer • Take cash on delivery Customers Local Grocery Store Source: D’Essence analys 11
  12. 12. AaramShop Revenue Generation • Aaramshop neither charges to consumer nor grocers • Generate revenue from ads , special offers • Aaramshop generate lots of data in which FMCG companies are interested • Sharing the intelligence with FMCG companies is a revenue source for Aaramshop Advantageofthis BusinessModel • Highly Scalable • Leverage technology • No worries about inventory, stock-out • No need to manage logistics • Present across 35 cities in India via a network of 3260 Aaramshops Source: D’Essence analys 12
  13. 13. INTEGRATED SUPPLY CHAIN MODEL Custom er Order gets processed at Warehous e Online Portal Call Center Whole Seller Manufactur er Procureme nt Deliver it to Customer Source: D’Essence analys 13
  14. 14. KEY CHALLENGESKEY GROWTH DRIVERS Building Customer Base Key Challenges •Increasing number of working population •Rapid urbanization and growing trends towards nuclear families along with growing population of working women •Increasing disposable income •Rise in internet penetration, growing 3G subscriber base and growth of internet enabled devices •Increasing use of social media •Increase in penetration of debit cards , credit cards •Increasing reliability on online payment Source: D’Essence analys 14
  15. 15. 15 INVESTORS PICK • BigBasket raised $ 3 million from a Singapore based private investor and ready to launch its operation in Delhi NCR , Chennai and Pune. BigBasket is looking for next round of investment of about $40- $50 million • Greencart.in, Mumbai based fresh fruits and vegetable shop has raised $1.5 million in Angel funding from Techno group • In July 2013, LocalBanya raised funds from BCCL’s springboard fund and in January 2014, LocalBanya had secured undisclosed funding from Karmvir Avant Group • Unilazer Ventures bought 25% stake in EkStop in January 2014 Source: vccircle.com , business-standard.
  16. 16. 16 D’Essence Consulting is a Management Consulting, Business Strategy and M&A Advisory firm Build Grow Remain Competitive M&A Advisory 303, Aar Pee Center, 11th Road, MIDC, Andheri (E), Mumbai- 400093 www.dessenceconsulting.com +91 22 28347425 chandni@dessenceconsulting.com Services • Market Entry & Growth Strategy • Business Plans & Financial Projections • Start-up Acceleration Services • Market Assessment • B2B Market/Consumer Insights • Solutions to transform Food and Retail Sector • Access to Capital through our Investor Network D’Essence Consulting Services

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