Amazon.in wants to take customers grocery shopping

E-commerce behemoth Amazon is on the war path to build customer stickiness and loyalty with its ‘Now’ ‘Pantry’ offerings of groceries and daily household essentials.

Having outdone market leader Flipkart on some crucial parameters such as seller count, product range and traffic as of December 2016, Amazon is looking to hook a new set of customers into buying their daily supply of fruits, vegetables and household essentials on its platform, with express/scheduled doorstep deliveries with zero delivery fee for Amazon Prime customers.

“With the promise of best price, daily deals on groceries and household essentials, along with the added convenience of express deliveries, Amazon’s strategy is to inculcate a habit among consumers to shop online every other day,” said Rajeev Banduni, CEO, GrowthEnabler Global, a data intelligence and consulting firm for start-ups and corporations. “Once the habit is formed, it is easy for Amazon to target those customers to shop across categories.”.

Pointing out that 55 million Indians shopped online in 2015, he said: “Compare this with the US, Amazon’s home market, where 69 per cent of online adults shopped online once a month, and 33 per cent shopped online every week in 2015. These are the kind of online shopper numbers that Amazon is looking to net in India.”

Launched in Bengaluru in February 2016, the Amazon Now app offers 16 categories. It was rolled out in Delhi and Mumbai before Diwali 2106, and in Hyderabad last month.

“We plan to cater to over 80 per cent of the pin codes in every city that we foray into, with sellers in each pincode offering 700 deals at any point in time,” Saurabh Srivastava, Director - Category Management, Consumables and FMCG, Amazon.in, told BusinessLine . He said, fruits and vegetables, which was launched in Amazon in August 2016, has become its biggest sub-category. In less than a year, Amazon services 67, 97, 86 and 79 pin codes in Hyderabad, Mumbai, Delhi/NCR and Bengaluru, respectively.

Amazon Pantry, a global programme, was launched in Hyderabad in July 2016. It is now available to customers in Delhi, Gurgaon, Faridabad, Mumbai, Pune, Chennai, Bengaluru and Mysuru. “Pantry is for once-a-month stock-up shopping with delivery within 24 hours, whereas Amazon Now is for top-up purchases in two 2 hours,” he said.

Amazon has another ace up its sleeve — Amazon Dash Button, a Wi-Fi connected device that re-orders your favourite product with a press of a button, which costs $4.99 in the US. While Srivastava declined to comment on when the Dash Button will be launched in India, Jason Feldman, Director Global Innovations, Amazon, in an interaction last month, told BusinessLine : “It has just been launched in Europe, the second market for the Dash Button, and will be launched in Japan next. It will definitely be launched in India soon, but I don’t know when.”

Of the $700-billion retail market in India, grocery is the biggest spend in the offline category, constituting a $500-billion market. “Grocery will be one of the top-performing categories in e-commerce in 2017 with Big Basket, which has a presence in 25 cities, leading the way; Amazon expanding aggressively in the segment; and more value options for customers with private labels push,” observed Anil Kumar, founder CEO of RedSeer Consulting.

Flipkart, which has no play in the segment at present, had experimented with grocery sales through ‘Nearby’, its hyperlocal delivery app, which it shut down early last year.

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