With the grocery segment becoming a standard feature on established e-commerce platforms such as Amazon and Snapdeal, the sale of fresh fruits and vegetables (F&V) is a logical extension. Freshfalsabzi, PepperTap, Localbanya and Big Basket have jumped onto the bandwagon although their operations are restricted to a few cities.

But F&V has its own challenges in meeting consumer demand. While newer ventures are still cautious and leveraging expertise in the grocery space to keep business flowing, older ones such as Mumbai-based Localbanya have found their footing.

‘Localbanya’, which has been in the business since 2012, is planning to expand to 12 cities by the end of 2015. “Consumers are getting comfortable shopping online for groceries. The space has huge potential and I believe it will see consolidation in the next five-six years,” said Rashi Choudhary, COO and Co-Founder, Localbanya.

Experts say the F&V slice of the e-commerce pie is difficult to crack because low margins, hygiene, freshness and transportation at the right temperature are big challenges.

Going local In a country where the dearth of cold storages is often blamed for wastage of fresh produce, start-ups entering the space appear to have bypassed storage of goods for prolonged periods and are instead sourcing locally to cater to needs in specific areas of cities.

‘Freshfalsabzi’, a part of the diversified RSND Group, accepts orders online or through calls at any time of the day for delivery on the following day in three time slots. It will also launch an app shortly.

“We launched in a limited manner to figure out the correct model. We went from 20 regular customers to over 250 in just a month only through word of mouth,” said Rajesh Gupta, Chairman, RSND Group.

Noting that smaller outfits have an edge over the bigger ones as they are more local, Navneet Singh, Co-Founder of the Sequoia Capital-backed ‘PepperTap’, says: “We are already getting 300 orders per day and we are expanding to Noida, west Delhi and Dwarka (a suburb of Delhi) next.” The company has plans to enter Mumbai, Pune and Hyderabad in the next three months.

How it works The produce is procured from wholesale markets in the early hours and shipped to delivery centres, where it is packed and then sent out. Logistics are handled internally and stocks are not held for more than five hours. “Since companies need to tie up with local vendors, it remains to be seen how scaleable the current models will be for these start-ups to become successful pan-India players,” said Rajat Wahi, Partner-Retail at KPMG India.

Akshaya Home Farms is among the few businesses that has sustained itself for the last three years. The firm, which has a five-acre plot to grow vegetables near Hyderabad, offers weekly baskets for its online customers.

It delivers a basket of vegetables (22 varieties) every week, with monthly packages ranging from ₹1,400 to ₹1,600. “While we grow some vegetables, we procure others from farmers. We have 300 active customers,” says Suresh Iyer, founder-director of Akshaya Home Farms. Currently available in Hyderabad and Mysuru, the agri start-up plans to expand to Bangalore, Mumbai and Pune in the next phase.

With inputs from KV Kurmanath in Hyderabad

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