Online retailers breathe life into organic product biz

For Adi Naturals, the Bangalore-based aggregator and a vendor of organic food products, the sale of fruit and vegetables has seen an increase of 50 per cent over the last six months. This was after the company tied-up with the online retailer Bigbasket.com.

Even for Bigbasket.com, which claims to have a large organic product range, the sales are increasing month on month. And so is the case with other retailers such as Natural Mantra or Ekstop.com.

The proliferation of online retailing is seen giving a push to the sale of organic products that are grown without using chemicals and pesticides. More health conscious consumers are turning to the net to purchase such products, which are otherwise sold only through select outlets. Consumers are finding it relatively easy to source online.

“The number of people looking at organic goods — be it food, hair care, home care or clothing — has increased significantly in the past four years,” says Anand Agarwal, Chief Executive of Natural Mantra, a Mumbai-based online grocery portal, where over half the orders placed are for organic foods.

“The sales are rising by 40 per cent every month. We expect the company to earn a profit in two years and touch a revenue figure of Rs 50 crore by 2016,” says Agarwal.

Vipul Parekh, chief financial officer Bigbasket.com said response for organic products is very good. “About 20 per cent of our vegetable sales are organic and the share is growing month-on-month,” he added. Bigbasket.com sells about Rs 1 crore per month of organic fruit and vegetables and another Rs 50 lakh worth of organic provisions.

"It is still very small, but online sales are picking up. We are seeing some good traction" said Raj Seelam, Managing Director of Sresta Natural Bioproducts Pvt Ltd, which markets its products under the 24 Mantra brand. Seelam, however, could not give any volume or the value details of the brands sold online.

Vidya Sadanand, co-founder of Adi Naturals, said Bigbasket has helped boost sales of fruit and vegetables by 150-200 kgs every week. Prior to the tie-up with Bigbasket, Adi Naturals– that sources organic products right from Jammu & Kashmir to down South, was selling about 300-400 kgs of fruit and vegetables through its stores.

“We sell about one tonne of vegetables, fruits and staples every week and are looking to expand our tie-up with Bigbasket to widen our reach,” Sadanand said adding that consumer awareness on organic stuff needs to pick up.

The organic product market is estimated at over Rs 1,000 crore and is growing annually at over 20 per cent.

Sumat Chopra, co-founder and CEO, Ekstop.com said, “With growing health awareness, organic products are gaining interest amongst consumers. People are ready to spend a little extra to have organic products as a part of their day-to-day diet. Mumbai as a market has a very high acceptance rate for organic produce. ”

Chopra said that the adapters of these products are from different income groups but are people who are conscious of the hazards of chemicals & pesticides. “While our normal products have a great off take, organic products have been increasing by almost five per cent on a month on month basis. To cater to this growing demand we have increased the range of organic foods available on our portal. The range offers products varying from Grocery & Staples to Spices & Tea, etc."

According to a survey by Morarka Rural Research Foundation the demand for organic food products is also rising from smaller towns and moffusil with consumers willing to pay up to 20 per cent more from pesticide free produce.

Several online retailers, however, said that the lack of scale in organic retail may pose a challenge. However, logistics is a big cost for these online portals. In grocery, the ticket sizes are smaller and the high logistics cost makes nation-wide delivery unviable.

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