Grofers, which started out as a hyperlocal grocery delivery player in December 2013, moved to the inventory model over the last two-three years, and recently shifted focused to private labels (Mint file)
Grofers, which started out as a hyperlocal grocery delivery player in December 2013, moved to the inventory model over the last two-three years, and recently shifted focused to private labels (Mint file)

Grofers sees sales worth 403 crore in discount week

  • The 10-18 August sale, called Grand Orange Bag Days (GOBD), saw 48 million units sold, with about 200,000 orders a day.
  • Grofers generally sells goods worth about 240 crore every month

SoftBank Group-backed online grocer Grofers on Monday said its weeklong sale drove purchases worth 403 crore in gross merchandise value (GMV), above a targeted 370 crore, despite weak consumer sentiment and a slowdown in sales.

The 10-18 August sale, called Grand Orange Bag Days (GOBD), saw 48 million units sold, with about 200,000 orders a day.

GMV signifies the value of goods sold in an online marketplace, but does not take into account factors such as product returns and discounts.

Grofers generally sells goods worth about 240 crore every month, indicating improved interest during the sale season.

A number of major fast-moving consumer goods (FMCG) companies posted muted results for April-June, signalling slowing demand.

“It’s really hard to tell in our case because the overall platform has grown. So the slowdown hasn’t really impacted us right now. But what we have seen in a very limited way is that there is a consumption downgrade. People are buying more budget items than higher price alternatives," said Albinder Dhindsa, co-founder and chief executive officer, Grofers, in a telephone interview.

This would also lead consumers to buy more locally manufactured products as well as in-house brands, benefiting Grofers. In the current sale, more than 7,000 small merchants helped Grofers deliver over 2 million orders, Dhindsa said.

This is the second time Grofers has run a large-scale sale on its platform, having piloted a GOBD sale in January. During that sale it recorded 207 crore in GMV, Mint reported in January.

Grofers, which started out as a hyperlocal grocery delivery player in December 2013, has moved to the inventory model over the last two-three years and has recently begun focusing on private labels. However, unlike rival BigBasket, Grofers does not offer fresh produce or same-day delivery.

It performed better this time because it had the experience of conducting a large-scale sale. “(During a sale) the challenge is that our technology infrastructure has to hold up. In a normal month, our peak is when customers check out about 4,000-5,000 items a minute. During sales we hit around 30,000 per minute," Dhindsa said.

“We didn’t expect the huge volume in the January sale so we learnt our lesson this time. So we plan for logistics—the promised time for delivery goes up. Normally we deliver in a day, but this time we made the promised time 3-4 days, also because the rains lead to a longer delivery time," Dhindsa said.

Grofers last raised $220 million in capital led by the SoftBank Vision Fund, along with South Korean investment firm KTB Ventures and existing investors Tiger Global and Sequoia Capital in June.

After the current sale, it is on track to cross 600 crore in GMV for August, compared to the 550 crore it had planned, Grofers said.

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