Home > companies > Spencer’s steps into online retail with meragrocer.com acquisition

Kolkata: Spencer’s Retail Ltd, part of the RP-Sanjiv Goenka Group, on Wednesday announced the acquisition of Omnipresent Retail India Pvt. Ltd, which runs the grocery website meragrocer.com. The company did not disclose the size of the deal.

The online grocery, which currently operates in Gurgaon and some neighbourhoods of Delhi, will be integrated with Spencer’s brick-and-mortar operations before a national rollout. The back-end integration is expected to take around two months, according to Shashwat Goenka, group chairman Sanjiv Goenka’s son, who runs the retail business.

He said he expects the company’s online gross merchandise value to touch 500 crore in five years. For the past few months, Spencer’s has been internally developing an e-commerce platform when the opportunity to acquire meragrocer.com emerged.

Though meragrocer is small with sales worth only 5 crore a year, Spencer’s decided to buy it because of its robust information technology (IT) platform, Shashwat Goenka said. Also, it would have been more expensive to build the online platform ground up and it could have taken up to 18 months to integrate a new site, he added.

Despite its impressive IT platform, meragrocer.com doesn’t seem to have done too well lately, said an independent IT consultant, citing its poor engagement on social networking sites such as Facebook and Twitter. “It’s impossible to run an e-commerce site without digital marketing," he said, asking not to be identified. Its online ratings and reviews, too, aren’t too healthy, this person said, adding that the site did, however, at one point try to build a robust delivery channel.

To build something like meragrocer.com from scratch would have cost 2-2.5 crore for the IT platform alone, the consultant said, adding it appears to have made some investments in building the delivery channels, too.

Shashwat Goenka said he had considered these issues but was far too impressed with meragrocer.com’s IT platform and the price at which it was available to pass up the opportunity. That apart, it was being run by a small and efficient team of around 20 people; so all of them including the founders—Saurav Chaddha, Manoj Kumar and Dinesh Paul—will continue with meragrocer.com. However, the site’s name may be changed.

A wholly-owned subsidiary of RP-Sanjiv Goenka Group’s flagship CESC Ltd, Spencer’s is gearing up for its maiden public offering of shares. Currently, it has 122 stores across 35 cities in India. In 2014-15, it reported a net loss of 151 crore on a revenue of 1,672 crore, according to CESC’s annual report. Loss has since narrowed to around 2 crore a month in the second quarter of the current financial year, according to Shashwat Goenka. In the current year, sales are expected to grow at 10-15%, he added.

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