E-grocers have more buyers, but each order remains small

Purvita Chatterjee Mumbai | Updated on January 16, 2018 Published on December 29, 2016

While there was extended reach, new customers were not willing to shell out more to buy groceries compared with the previous set of consumers   -

Post 40% rise in sales, reach; but the average order per customer remains flat

Demonetisation may have led to falling sales at neighbourhood kirana shops, but sales and reach of e-grocery players grew 40 per cent from September to November, according to data from market research consultancy Kantar IMRB.

However, the average ticket size remained at ₹550 with 2.5 orders per customer, as cash-on-delivery CoD orders took a hit during this period.

Data from Kantar IMRB’s 30,000-strong e-commerce panel had some answers as to whether the demonetisation actually was a blessing for e-grocery players at a time when most have been struggling with their business models, and some like Local Banya, Greencart and Pepper Tap, had shut shop.

Akhil Almeida, Head, Digital Practice, Kantar IMRB, said: “With cash in short supply, we wondered if consumers would switch from their friendly neighbourhood kirana stores to coming-of-age e-grocery providers. What we found is that while reach and sales went up 40 per cent from September to November, the per-ticket size remained the same as new customers were not exactly spending more on e-groceries. Besides, availability of some of the items was also impacted due to supply chain and vendor issues.”

Taking into account the top 12 e-grocery sites — such as Big Basket (the only national player), Amazon, Reliance Fresh and Godrej Nature’s Basket — the IMRB Kantar data showed that while there was extended reach, new customers were not willing to shell out more to buy groceries compared with the previous set of consumers, in September, before the festival and demonetisation season.

Using September as the base month, e-grocery players, especially speciality stores, showed the largest gains, with 70 per cent growth in October, but lost momentum thereafter.

“November sales were down 17 per cent from October, but up almost 40 per cent from September. E-grocery players have benefited over the past few months as festive shopping and demonetisation have contributed to growth in revenues by bringing an influx of new consumers.

“Hyper locals have been the biggest beneficiaries, having taken advantage of shorter delivery time and availability of stocked goods with local outlets,” added Almeida.

Regional e-grocers such as Go4Fresh have also seen its orders rise 30 per cent during the past few months. Anjaney Bhutada, Founder, Go4Fresh, said: “The ticket size of the purchases did not go up since those who made CoD purchases moved to cards.”

Published on December 29, 2016
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