Grofers to shop for more cos before IPO
2 min read 15 Jan 2021, 06:15 AM ISTThe company is evaluating e-commerce-specific technology products as it builds more efficient supply chains, chief executive Albinder Dhindsa said
PremiumGrofers is looking at acquisitions possibly in the technology products space, chief executive Albinder Dhindsa said, as the online grocer prepares for a public listing later this year following a home shopping boom.
The company is evaluating e-commerce-specific technology products as it builds more efficient supply chains, Dhindsa said in an interview.
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“We are evaluating businesses we could acquire that help enhance the intangible benefits customers are looking for, that is relevant product offerings, convenience and, of course, peace of mind," said Dhindsa.
Grofers had 12,000 store partners at the end of 2020 compared with 7,000 before the covid outbreak. Local store partners help Grofers in delivering goods. It also added 10,000 sq. ft of warehousing space during the year. The ramp-up in warehousing has helped Grofers make express deliveries in two hours, Dhindsa said. “We opened 23 new facilities during lockdown last year and made a significant amount of investment to meet the higher demand for essentials. We also looked at acquiring more local space in towns and cities and ramped up our partnership with local store partners," Dhindsa said.
Grofers, which had earlier targeted overall profitability by 2020, now plans to achieve the target this year. Its sales volume grew 80% in 2020, and it is now present in 38 cities.
The company will focus on daily fresh-use categories such as milk, bread and vegetables, and expand verticals such as fresh meat. “Our fresh categories are operational in most cities. Under fresh, meat is something we are still figuring out as to how to grow that category," Dhindsa added.
Grofers is still riding on the trend of household and kitchen essentials and plans to launch private labels in hygiene, personal care, home equipment, crockery and kitchenware. Private labels currently form almost 42% of its revenue, and it plans to invest $15 million in this category. Grofers expects private labels to fetch almost 60% of revenues by FY23.
Grofers partners nearly 800 micro, small and medium enterprises (MSMEs) for its private labels and plans to add 200 more this year for new categories and regions.
“Our focus will remain on our customers. In 2021, we will work towards making products more affordable for customers and look at making their shopping experience better," said Dhindsa.
A recent report from consulting firm Redseer and online grocer BigBasket said the total size of the e-grocery market in India was expected to grow from $1.9 billion in 2019 to $3 billion by 2020. Flipkart, Reliance JioMart, Amazon India and Swiggy are jostling for space in this market, leading to a spurt in volumes. At a compound annual growth rate of 57%, online grocery may reach $18.2 billion by 2024.
