Grofers to deploy 500 electric vehicles by December

Taking a cue from other e-commerce firms, Grofers is joining the electric vehicle bandwagon. The online grocery startup said on Monday that it is looking to deploy 500 electric vehicles for its last-mile delivery by the end of this year.

This comes at a time when the central government has been pushing towards the use of electric vehicles. While Grofers started piloting with electric vans last year by deploying 50 vehicles in Delhi, it is only now that the firm is taking serious steps in this direction.

“Our experiment was largely successful,” said Saurabh Kumar, co-founder of Grofers. “We were able to reduce the last-mile delivery costs by 50% in places where the EVs were deployed.”

Currently, Grofers has 100 EVs in Delhi and 50 in Jaipur, with plans to launch EVs for last-mile delivery in the 13 cities they are present in by the end of 2019. This, they believe, will half their last-mile delivery costs.

“The main investment we have to make is to ensure that all the distribution centres are equipped with charging infrastructure for the vehicles,” said Kumar.

Grofers is also working with the government to run pilots on four-wheeler EVs--which can be used to transport products from the company’s warehouses to distribution centres in the cities.

Apart from Grofers, there are several other firms that have been experimenting with electric vehicles for delivery. Flipkart announced last month that they will replace 40% of their delivery fleet with electric vehicles.

As for Grofers, the firm which raised $220 million from SoftBank Vision Fund and other investors in May, has been eyeing profitability. The switch to electric vehicles align with its aim of cutting costs along with using an environmentally-friendly alternative.

On the other hand, Grofers has also shifted its focus to private label offerings in a bid to expand margins. The company claims to be profitable in Delhi, where it clocks Rs100 crore monthly revenue, Grofers’ chief executive Albinder Dhindsa told Mint in a previous interaction. Dhindsa expects Grofers to hit profitability by the end of 2021.

As of May, Grofers was clocking around 60,000 daily orders, with an average order value of Rs1,450.