Business Model: Online Grocery Shopping


Online grocery has been one sector which has done very well in the last few years. It basically involves selling all grocery products online. It offers customers a wider variety of products to choose from along with the convenience of getting them delivered at your doorstep. With new hyper-local entrants entering this space, the delivery times have also reduced drastically.

Online grocery as a segment is very attractive owing to the following reasons.

Big Market Size: Everyone buys groceries.

Repeat Purchase: Groceries are bought regularly after a certain period of time.

Unaffected Growth: Groceries are and will continue to be bought with slight variations in value even during times of low economic growth in a country.

Having said all this, the vastness of this sector brings with it certain challenges.

Very Competitive: We tend to see a lot of players in this sector such as the big eommerce players, hyper-local ecommerce as well as offline players like the big modern trade stores, the local kirana stores  etc.

Low Margins: Margins are very limited and hence profitability tends to be a big concern for startups operating in this space.

New players looking at entering this space need to assess the above factors and analyse how they will compete with the existing players. Maybe not on the product front, there is a lot of scope for innovation in services around the supply chain such as delivery, order booking, customer experience, returns and so on.

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