In this article, we are going to explain each and everything which will help you understand how to start an online grocery store in India. Online grocery eCommerce business is expected to grow by 25-30% in the year 2017 in the majority of the towns and cities in India and is predicted to cross $25 billion dollar business by the end of the year 2020.
The growth is so fast that major eCommerce giants, which include Ola, Flipkart and Paytm are already investing in this business segment. With era turning into on hand and simpler, it is now quite common that major retail chains like Godrej’s Nature Basket or Reliance Fresh are already setup online grocery store.
Business Opportunity: Start Online Grocery Store in India
The majority, of the online grocery store in India, operates on the multi-vendor eCommerce business model. Some of the leading grocery store in India including AaramShop, BigBasket & ZopNow are running on the multi-vendor business model only, where vendors from multiple cities list their product.
Also, existing online retailers offer their service in metros and major cities only. Daily expenses on grocery are the biggest and most steady share in the budget of any Indian’s family. In this fast-moving lifestyle, online grocery chains have the tremendous potential of growth, and peoples are looking to concentrate on the daily works instead of spending hours on shopping from local grocery shopping store. Online grocery help’s consumers to buy grocery anywhere and anytime using useful mobile applications. With increasing internet penetration and mobile devices, online grocery will continue growing rapidly.
As a business view, the best thing about online grocery business is that you need not integrate payment gateway or accept payment online, you can use COD (Cash on Delivery) as primary payment method on your website, and not even you require a shipping tie-up as your delivery guys will deliver orders to customers doorstep. Furthermore, major giants in Indian e-commerce sector such as Flipkart or Snapdeal is not in the competition still.
Steps to start online grocery business in India
1) Identify/decide delivery region
A major step in starting a grocery e-commerce business is identifying the delivery region or areas you will be serving. As fresh groceries or vegetables can be delivered to a limited radius of the delivery area, you need to plan accordingly to set up your office, warehouse or tie-up with local grocery shops to fulfill order smoothly. You also need to consider analyzing your identified regions geographical, cultural and eating habits including no. of households, the population of young, urban, educated, suburban families, older singles, etc.
2) Register your business
It’s time to go ahead and register your firm/company (if you are an individual you better start with sole proprietorship firm or if you have partners continue with LLP registration) also, get VAT, Service Tax, Sales tax submission. Any registered tax consultant or chartered accountant will help you complete these formalities. Also Read: Complete guide to registering an e-commerce business in India: Sole Proprietorship
3) Arrangement of inventory / List grocers in the area and talk partnership opportunities
There are two ways to maintain inventory or stock, either you can keep your stock ready in your warehouse or you can tie-up with local grocery stores initially. The best way to start is by preparing a list of products (with their margins) you want to keep in the warehouse and accordingly, a tie-up with grocers who would be interested in this multi-vendor business model.
4) Develop local delivery system / Finalize delivery modules
As grocery business relies on home delivery, sometimes it becomes the matter of concern. Many times same day delivery option may not be possible due to unavailability of vehicles which makes customer frustrated. Confirming the order and then not delivering the same will be the worst scenario. Presently, most of the established online grocery business are still using their funding capital to cover-up the delivery charges.
On an average, the delivery cost to the company is around Rs. 40 – 50 per delivery. The best way to delivery, grocery is to use delivery boys with two-wheelers, similarly how pizza guys delivery orders in guaranteed 30 minutes of time. First of all, you need to decide the range of your delivery area. For example 5km, 10 km radius or the entire city. Then hire few delivery boys with bikes, for a start.
5) Development of Website and App
This step is the backbone of the complete process of starting your grocery eCommerce store. Invest some time and thought into your goals and expectations for your agency. After the launch of your new site, a good company will maintain a healthy relationship with you. Depending on how involved you are with the maintenance and publishing of content, a good company will assist you in your analytic reporting and ensure that your website is helping you reach your goals.
Get your grocery eCommerce website and app developed by an experienced eCommerce design and development company, who has involvement in this field like ClueCommerce.
6) Payment Methods
As all orders will be delivered to customer doorstep, you can use COD (Cash on Delivery) as a primary mode of accepting payments. Taking money would be easy as your delivery boys will be delivering the goods to the customers and so you will receive the same payday, unlike online payments where you need to wait for remittance from payment gateway ends.
Also, you will be saving almost 3% of TDR which you would be paying to payment gateway company if you accept online payment via credit/debit card, net banking or other payment options.
7) Marketing / Customer Acquisition
You can easily market your online grocery store in a local newspaper, pamphlets, Bulk SMS, hoardings, door-to-door visits, society meetings and local SEO is also preferable.
Few Suggestions on How to Start Online Grocery Store in India
- Make sure to launch Mobile apps for both Android and IOs platforms as due to a high number of 4G devices most of the housewives and working peoples are now already connected to the internet and they can be your potential client.
- Make sure you integrated Google Translate or essential multi-lingual feature with your website and mobile apps, Google’s free service instantly translates words, phrases, and web pages between English and over 100 other languages for those who don’t know the English names of many grocery items.
- Make sure you display contact number suitable position so your customers can place orders on the phone as well.