With incomes rising and Internet connections spreading across India’s urban centers, an online food retail channel is developing with a mix of brick-and-mortar retailers (setting up e-commerce sites with offering home delivery) and with pure-play online grocers emerging. The latter category includes Bangalore-based BigBasket and Mumbai-based retailers LocalBanya and EkStop. All three have been part of the early development of the online grocery channel in India.
Brick and mortar grocers Reliance Fresh and Godrej’s Nature’s Basket have been offering free delivery of groceries and fresh vegetables and fruits to homes and offices within a limited radius of the location of their stores. Amazon India has started delivering foods and beverages too.
However, debates continue on the subject of the efficacy of e-commerce for food items with some analysts asserting that promotions and deals are a common tactic by manufacturers looking to build an online presence in India — a tactic which should only be used occasionally. Amnish Aggarwal, senior VP for research at stockbroker Prabhudas Lilladher, feels “If your premium consumers are going in for your online retailing where you are offering discounts, then it is detrimental for your brand value.”
Road infrastructure is considered in delivery schedules, and many companies have bicyclists delivering orders. LocalBanya allows customers to enter three delivery addresses; while EkStop offers six, two-hour delivery time slots. BigBasket’s delivery routes are managed by GPS technology.
Himanshu Bajaj, principal at A.T. Kearney‘s consumer industries and retail practice in India, believes “major investments” can be expected over the next few years.
