Episode 4: Grofers

    In the modern day world, where technology resides in everyone’s pocket, no one has the time and energy to go all the way to the grocery store, find a parking spot, search for the products or wait in queues to make payments. You can now easily order everything you need from the comfort of your home, make cashless payments and receive your grocery without any physical hassle. E-commerce is convenient, time saving and practical and one such emerging platform is the Gurgaon based start-up Grofers, which not only connects customers with nearby retail stores, but also promises delivery within mere 90 minutes. Founded in December 2013, Grofers is now delivering groceries in 27+ cities and has partnered with over 5000 stores to deliver more than 25 million products to the customers every month.

    Pre-Lockdown Phase:

    Grofers, before the lockdown, was a secondary player in the market, with Big Basket being the biggest player. Talking in numbers, the company fulfilled around 90000 orders in a day distributed through its channels set up across the country. There were talks about a merger with Zomato which would result in a whopping increase in the customer base as well as better delivery efficiency.

    During the Lockdown and Ahead:

    With a strict lockdown in effect, people turned to online delivery services like Grofers to a large extent. After the lockdown was put in place, the numbers for Grofers doubled to almost 2 lakh orders fulfilled per day. The e-grocery platform witnessed a 100% growth in Gross Merchandise Volume (GMV) compared to a month before the lockdown. As per an ET report, Grofers noted a 5% to 7% hike during weekdays, and an 80% increase in demands during the weekend immediately after lockdown.

    Right after the lockdown was imposed, the company operated at a lower capacity due to the shortage of workers and supply constraints. Grofers operated at 10% of its pre-existing capacity which led the team to take profitably harmful measures like limiting cart value, reducing discounts and cancelling orders all together. However, when the lockdown was further extended, customers began to shop for groceries from home, Grofers witnessed a sudden spike in the number of orders placed and delivered.

    The increase in the number of users on one hand was an opportunity for the company but the lack of staff was equally alarming. Grofers, only having a workforce of 60% operating staff, resorted to hiring 2000 temporary warehouse workers and delivery staff. It has now collaborated with other platforms to get their staff and delivery team on board and worked with more manufacturing partners to scale the supply basis demand.

    The online food delivery app Zomato, which recently acquired UberEats, is in talks to acquire the grocery retailer in an all stock level. This possible merger comes close on the heels of a recent partnership that Grofers and Zomato struck for the purpose of grocery delivery. The tie up involved Zomato Market, Zomato’s newly launched grocery offering, fulfilling customer orders from offline stores that have existing arrangements with Grofers. Sequoia Capital, the common investor in both the company, clocked high numbers in its recent pilot run across Delhi-NCR, further strengthening the ongoing negotiations.

    With everything going their way, the company is hiring more people than ever, commissioning additional transportation, and increasing their supply chain capabilities to cater to the growing demand. The company is all set to benefit from its partnership and become a major player in the market as the COVID threat seems to last for quite some time.

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