Bengaluru: Taxi-hailing service Ola has started a pilot project to deliver groceries called Ola Store, barely two months after it started a food delivery service called Ola Café.

The company, which had built the Ola Café service into its smartphone app, on Saturday emailed some of its customers to try out the new grocery app. Mint has seen a copy of the Ola email.

The development was first reported on Saturday by online news portal Yourstory.

“As a premium Ola customer, we are inviting you for a sneak preview of Ola Store, our brand new service with which you can shop for all your grocery needs," the email read. Customers will also get 50% discount on their first order, the email said.

It is not clear if Ola will invest in warehouses to hold inventory or tie up with grocery stores and hypermarkets.

The company declined to comment.

Orders above 300 will be free while others will attract a delivery fee of 50, Yourstory reported. Mint could not independently verify this. Besides regular categories like vegetables, fruits, dairy products and groceries, Ola Store also has electrical appliances, health supplements and medicines.

Online groceries have stoked ample interest among investors and consumers with businesses such as BigBasket, ZopNow, LocalBanya, Grofers and Peppertap jostling for a bigger share of the market.

Investors have poured more than 750 crore into online grocers and delivery companies over the past 18 months. The food and groceries market in India, which is estimated to touch $480 billion in 2020 by India Brand Equity Foundation, has also drawn the attention of online marketplaces. While Flipkart is planning to start selling groceries, Amazon is running a pilot in Bengaluru with mom-and-pop stores for express delivery. Snapdeal has already tied up with Godrej Nature’s Basket.

Ola expanded into food delivery in March, tracking similar moves by US-based rival Uber in its home market. Currently, the average ticket size for a grocery order is 600-800, more than double the average fare for cab bookings, according to executives at online grocers and cab hailing services.

“It is a very intuitive thing that any business will do to add top line by expanding into related areas where they can draw synergies from," said Anand Ramanathan, director at KPMG Advisory Services. “If a company is already into (cab booking), food product deliveries is one step further. It is about sweating your existing assets better."

Ola, which charges a 20% commission from drivers for every ride, has been spending heavily on driver retention and customer acquisition in the wake of aggressive expansion by Uber in India.

Ola acquired local rival TaxiForSure for $200 million in March to expand its lead over Uber and Meru.

The company has been on a capital-raising spree to fund its expansion.

It has raised more than 3,700 crore since October 2014, including a 2,500 crore round in April from a clutch of investors, including Japan’s SoftBank, Russian venture capital firm DST Global, Singapore’s sovereign wealth fund GIC and Falcon Edge Capital.

Ola is in talks with investors to raise at least 3,000 crore more, Mint reported on 21 May.

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