INDIA – The Indian online grocery delivery service, Grofers has entered the fast moving consumer goods segment (FMCG) with a target to achieve more than US$364.7 million in revenue in the financial year 2019.
The grocery firm targeting stronger business growth with 50% coming from its private brands after it recorded US$138.6 million sales in the marketing year 2018.
To achieve the profitable agenda, the company has launched seven new brands under the two categories that is, Budget and Popular G-Brands.
In addition to rolling out over 500 SKUs (stock keeping unit), Grofers said it is seeking a presence in food products including tea, fruit jam, muesli, tomato ketchup, corn flakes, rose shahi sharbat and some household categories.
It claims its range of private label is priced approximately 5 to 50% lower than the market price for popular brands in these categories.
“With this, Grofers’ private labels expands to 250 food and non-food products for its consumers.
With this significant business expansion, Grofers aims to drive the next wave of growth for e-commerce sector by bringing the next 100 million customers to its platform,” said the company in a statement.
Disrupting the online retail market space
With the entry of the low-price online supermarket into the FCMG, the Indian ecommerce space is likely to be disrupted despite of a slowdown in the past few years due to regulatory actions.
The online retail market in India is expected to grow at a CAGR of 29.2% to cross US$73 billion in 2022, representing nearly 5.7% of total retail sales, according to US-based Forrester Research.
Grofers’ entry comes at a time when Amazon and Flipkart, which was acquired by Walmart for US$16 billion, are battling it out for retail space.
But according to Grofers Co-Founder and Chief Executive Officer Albinder Dhindsa, the foray into FMCG strategically positions it in the e-grocery business as it looks to expand in India.
“Through many industry-first initiatives, we have been instrumental in bringing new customers to the e-commerce fold with 15% of this customer base being our monthly unique shoppers.
Our focus is to service the families of India who are yet to experience the world of e-commerce and our target is to bring the next 100 million new customers to e-commerce industry through our platform,” said Dhindsa.