Indian online grocery market can exceed US$ 3 billion sales in 2020: Sanjiv Goenka

The Indian online grocery market is estimated to exceed sales of about Rs 22,500 crore (US$ 3.19 billion) in 2020, a significant 76 per cent jump over the previous year, according to Spencer's Retail Chairman Mr Sanjiv Goenka. The online delivery has gained attention following the COVID-19 outbreak, he added.

In July 2019, Spencer's Retail, part of the RP-Sanjiv Goenka (RPSG) Group, acquired online supermarket and grocery store Nature's Basket.

Due to the outbreak of COVID-19, consumers shifted on online delivery from homes to buy essentials and other products than they had done in the past, he said.

"The result is that India's online grocery market could exceed US$ 3 billion in sales in 2020, a substantial 76 per cent increase over the previous year following a demand spike for the home delivery of fresh produce," Goenka said in his address to shareholders in the company's Annual Report for 2019-20.

This was supported by an increased access to smartphones and low data costs, where consumers are opting for an omni-channel shopping experience, he added.

Spencers Retail is attractively positioned to capitalise on the omni-channel opportunity, he said.

"The company did not just respond to this sectoral inflexion point with a relevant mobile application and home delivery; it invested in enhancing proximity to consumers through phone call-based delivery, Chatbots and WhatsApp-driven product delivery using its stores as hubs," Mr Goenka said.

The company strengthened its approach by collaborating with Uber and other delivery partners for product supply.

According to Spencer's Retail CEO Mr Devendra Chawla, the online business of the company reached a milestone in FY20 where it not only regularly scaled the number of monthly active users but also positively turned around its unit-level economics.

"Our unit-level economics grew 45 per cent with a substantial increase of 125 per cent in our registered customer base. On the overall, the number of orders grew 175 per cent, which helped us significantly moderate delivery costs," he said.

Around 90 per cent of the company’s stores were operational across the county during the COVID-19 pandemic.

"We will accelerate our transformation and deepen our relevance," said Mr Goenka. "We believe that our competitiveness will be derived from omni-channel consumer access, judicious store rollout, distinctive positioning in the minds of our consumers, a balance of lifestyle and essential products, a shift towards non-food and apparel in the product mix."

Spencer's Retail is headquartered in Kolkata and operates 191 stores (including Nature's Basket) of various formats in 42 cities. Its revenue in FY20 stood at Rs 2,373.29 crore (US$ 336.68 billion).

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.