StarQuik, the online grocery shopping venture of Tata Group-owned Trent Hypermarket, which runs Star Bazaar, expects to cover 20 outlets this year as it expands its operations to cities like Bengaluru, Pune and Hyderabad.
Last year the Group had bought out the management team and technology of Gurgaon-based GrocerMax to enter the online grocery segment. The Tata Group had given the onus to the erstwhile promoters of the start-up to devise an omni channel strategy for Trent Hypermarket.
“We had to change the name from GrocerMax to StarQuik since it now belongs to the Tatas and for FDI regulations since it has a joint venture with Tesco. Currently, we have our operations across 5 stores in Mumbai. By the end of the year, it should be up by 20 stores in new markets as it is a top-up service that we are giving to our existing stores,’’ said K Radhakrishnan, Director, StarQuik and erstwhile founder of GrocerMax, who continues to have a minority stake in the company.
Star Bazaar has 37 stores and expects its e-commerce operations to become profitable at the store level before venturing into new markets. “In the last four months, we have ensured that we get profitable in each of the five stores where we have started our e-commerce operations, which is basically in the city of Mumbai,’’ said Radhakrishnan.
Differentiating itself from the rest of the online grocery players like Big Basket and Amazon, StarQuik would be resorting to its own stores to source food and grocery. “ We are not a hyperlocal player, which has a catchment area but an omni channel company, which is a separate entity under StarQuik within the group,’’ he said.
Meanwhile, offline retailers have been struggling to make money due to high rentals in the metro markets. Radhakrishnan, who is an industry veteran, having worked for big retailers like Future Group and Reliance Retail blames it on the MRP-based non-food items, which does not allow retailers to raise prices in sync with increasing costs and rentals. “The offline stores have not done well since it is not possible to raise the MRP rates when the costs go up for the retailer,’’ he said. Besides, he also felt there were not enough aggregators to fuel demand and that there was a need for more offline stores and better sourcing methods directly from the farmers.