Chennai-based online grocery store Ibuyfresh, which was shut down in June, will resume operations in select areas of the city in September.

The e-commerce platform, launched by fruits & vegetables and grocery chain Kovai Pazhamudir Nilayam in November 2014, stopped operations owing to high overhead delivery costs. These were mostly incurred while delivering products from the company’s warehouses located in the suburbs.

Ibuyfresh CEO Senthil Natarajan told BusinessLine each delivery caused a loss of about ₹100. The company catered to about 600 customers a day in Chennai. Since it is a logistics-based business, it thrives on optimal delivery to customers, he added.

To overcome the logistics issue, the company has decided to deliver from its own retail outlets rather than the warehouses. One warehouse, at Perungudi, has been shut down but the other one, at Nerkundrum, will continue to act as a centralised distribution centre, Natarajan said.

With this new model, deliveries are expected to be made in 90 minutes, compared to the minimum of four hours it used to take earlier. Though the initial investment was around ₹5 crore, Natarajan said the new delivery model did not require a lot of further investment, as the infrastructure and technology are already in place.

“The Ibuyfresh website will be active from September 1 for delivery in OMR, Velachery, Anna Nagar, T Nagar and Mylapore, where the demand has been the greatest,” he added. The service will be expanded to other areas in a week’s time.

Expansion plan Ibuyfresh has around 50,000 registered customers, and expects the daily delivery to go up 10 per cent post re-launch. There are currently 24 brick-and-mortar stores in Chennai, which will operate as hydrid outlets.

Natarajan said the company plans to launch the service later in Coimbatore, Puducherry and Tirupur.

Related Topics
comment COMMENT NOW