Many online grocery start-ups like Grofers, Peppertap and Askmegrocery have already tried their hand at capturing a large share of the $660 billion grocery retail market but due to various reasons – the main being a limited understanding of the business – either had to shut shop or curtail operations.
One big reason for the breakdown of the e-grocery segment was the threat posed by kirana shops, which have been ruling the roost since time immemorial.
The kirana structure has existed in India for years, an inseparable part of lives of people in rural and urban areas. Kiranawalas know their market as well as the demand of the community and it is there no surprise that they have an extremely loyal consumer base.
An e-grocery store, realizing the important role that kirana shops play in the Indian community, decided to leverage their expertise. Thus came into being AllSupermart, a start-up that leverages kirana expertise in understanding the community’s food and grocery shopping habits and couples it with an expertise in technology, offering the end consumer the best of both worlds.
Lessons Learnt
A late entrant in the online grocery space, AllSupermart was incorporated on October 27, 2015 in a bid to create an organized ecosystem for local shop vendors to sell their products and services online.
“Being a late entrant has its own benefits players who have already shut shop or scaled down operations have left behind lessons that act as lessons of wisdom. The most important lesson is to not repeat the same mistakes committed by players who have come before us,” says Founder & CEO AllSupermart, Amit Singh.
“We observed one issue that was prevalent in a lot of online grocery stores – unrest among vendors over processes and functionality. Our effort at AllSupermart is to create an ecosystem that benefits all vendors, customers as well as start-ups – a win-win situation for all,” he adds.
READ: Why e-grocery firms are walking the path of doom
Operating Strategy
Hyperlocal grocery format has proven to be a low-margin business for existing e-grocers mostly because of the high cash burn rates right from the beginning and low profit margins. This leads to lesser probabilities of breaking even with cut throat competition.
But AllSupermart has adopted a different strategy in the grocery and utilities shopping market.
“AllSupermart has adopted the Tortoise Strategy in every aspect right from marketing and advertising to expansion. Burning cash for higher customer acquisition through discount and sales is not effective in a business with low margins. Before launching operations in a new city, we always conduct a pilot to understand the consumer behavior backed by R&D done beforehand,” says Singh.
READ: 7 categories driving growth of grocery retail market
Business Model
Headquartered in Mumbai, the company aims to develop an easier approach to utility and grocery shopping for consumers. Its motive is to provide consumers with better shopping experience through local vendors on a virtual platform.
“AllSupermart works on a commission model of operations and we have partnered with Roadrunnr and Grab for delivery requirements. We also let local vendors cater to the delivery aspect. We charge a certain percentage of commission on the total billing to merchants. We let merchants decide the best price/ deal on products and ensure fair pricing of products available on our platform. The biggest difference is that AllSupermart works on an inventory-less model,” says Singh.
AllSupermart is a bootstrapped company and plans to raise funds as it scale-up operations. “The current product specific commission model and lower cash burn rates will help in monetizing over a longer period. We look forward to target revenue of Rs 10 crore by March 2017,” says Singh.
READ: How brands will win in grocery’s e-commerce boom
Expansion Plans
The hyperlocal marketplace for utilities and grocery shopping – which connects community to local vendors – currently has 20,000 products on display but going down the line plans to rack this up to 1 lakh products. The products range from grocery, electronics, farm-fresh, meat to kitchen ware, hygiene and health care products and more.
It is currently operational across 40 pincodes. Currently, present in western regions of Pune, it has plans to further expand in cities like Mumbai, Bangalore, Hyderabad and Chennai in second phase followed by Gurugram, Noida, Delhi and Chandigarh in the third phase.
Must Read
