Grocery delivery startups are hardly even profitable. So let's understand why this market is as hard to crack as a coconut shell.🤕
You may have heard of Amazon and Flipkart, the two e-commerce giants battling for grocery domination, yet neither has the perfect recipe for success🙁. A few brave startups, like BigBasket, Grofers, and JioMart, have also dipped their toes in this fiery market, but the journey isn't all butter chicken and naan.
First, let's take a byte of the big picture. India's online grocery market was $7B in 2022 and is growing at a CAGR of ~30%. The good part? It's projected to reach $37B by 2028. It's a veritable Everest to climb, and the path is as slippery as ghee-coated stairs.😅
The kirana stores in every street corner create a neighborhood grocery ecosystem that's as resilient as a coriander root. These stores offer personalized service and credit facilities, making them tough to dethrone. Plus, they deliver. 🤷🏻♀️
Logistics is another bitter pill to swallow. The traffic congestion can turn a 30-minute delivery window into an eternity. Plus, the complex address system doesn't help either, making it hard for delivery executives to locate customers without a GPS. Ah! the 10 min delivery. I'm still trying to understand why it's even around. 🙄
The discounts and promotions required to lure customers away from their trusted kirana stores and onto online platforms eat into already thin margins🥲. And we can't forget that with small basket size, return on single order is kinda negative. In 2022 Big Basket made Rs 7,098 crore in revenue and recorded a loss of Rs 812 crore. 🙀
So, while the likes of BigBasket and Grofers are trying to crack the online grocery code, they must navigate the chaotic Indian market, where the only certainty is the uncertainty. 🤷🏻♀️