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Online grocery retailer Grofers has found a better way to solve the issue of last-mile connectivity — rope in beauty parlours, gyms, hardware shops and restaurants to be the pick-up and distribution points rather than using delivery boys to zip through the streets carrying loads of items in their two-wheelers.
And, being part of Grofers’ network, these 6,500 merchants earn additional income too.
As groceries are heavy, Grofers cannot do milk runs when compared to e-commerce companies such as Flipkart or Amazon. “When we do 25 million shipments per month, the only way we can do is by leveraging the presence of local merchants like the beauty parlours and gyms. Our shipping cost is one-tenth of the competitor,” Albinder Dhindsa, Co-Founder and CEO of Grofers.
“These merchants, called Grofers Service Partners, already have a running business, and being part of our network, can make an additional income of ₹10,000-18,000 a month. Both of us benefit,” he told BusinessLine . In Delhi, beauty parlours help sell Grofers products to its customers and also act as pick-up or delivery points.
Despite many local kirana shops and supermarkets, business for Grofers is growing at 10-12 per cent month-on-month with monthly sales being around $40 million. “Over the last 24 months, we have grown by 8X as a business and the growth pattern is similar even now,” he added.
Grofers’ own label products such as tea, coffee or detergent account for 40 per cent of sales and the price could be 30-50 per cent cheaper than branded products. About 70 per cent of Grofers’ customers are young migrants with monthly family income of less than ₹50,000. Grofers works with nearly 140 manufacturers, Dhindsa said.
Post the recent funding of over $200 million led by SoftBank Vision Fund, the company is now valued at over $800 million. When asked when will the company become an Unicorn, Dhindsa, said: “We would like to take profitability over Unicorn status. Once we are profitable, we can figure out if we want to be Unicorn or Decacorn. Delhi and Kolkata are profitable for us now. However, the overall profitability of the company will depend on the southern cluster consisting of Bengaluru, Hyderabad and Chennai.”
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