Is India Ready to Buy Vegetables Online?
Shopping has a new destination -from jewelleries to books, today everything is just a click away. Even our everyday groceries have joined the bandwagon as urban middle class Indians explore their newly found approach to consumerism.
According to a report published by Research and Markets, the e-commerce industry in India is expected to grow at a CAGR of 40%, from US $ 5.9 billion in 2010 to US $ 34.2 billion in 2015. Many e-commerce start-ups are tapping into this window of opportunity. They are procuring vegetables directly from the farmers and delivering them right to your doorsteps.
However, so far there has been almost negligible funding in this space as investors are wary about scalability and execution issues. “One of the biggest challenges in this area is to ensure timeliness of delivery, especially in case of any immediate requirements,” said Anil Joshi of Mumbai Angels. “For these companies to execute properly they need to set up a supply chain that requires a lot of money,” added Anil.
Moreover, vegetables and grocery shopping are not just some monthly requirement but is often perceived as a family activity that many Indians enjoy doing over the weekends. However Joshi believes if the companies can work around on their timeliness and execution, there could be some interesting business prospect for the sector in the future. YourStory spoke to three online vegetables suppliers from Chennai, Mumbai and Bangalore as they make their foray into e-commerce and found out more on how consumers are adapting to this new trend.
Fresh n Daily
Mumbai based online groceries portal Fresh n Daily went live on February last year and have 2000 registered customers for their online and offline services.
“Initially what we saw was that more people ordered over the phone compared to internet. However, over the last one year there has been a gradual shift on this front and now almost 75% of our orders are placed online,” said Fresh n Daily, co-founder, Vikas Chauhan.
On an average, Fresh n Daily receives about 40-50 orders worth Rs 400 per day and are planning to extend their services across Mumbai by the end of this financial year. By next year March, the team wants to extend their footprint to at least one other metro. Vikas said, “Apart from staple food such as tomato, onions and potatoes, there is a lot of interest for exotic vegetables and seasonal fruits.” “An unusual challenge in this space however is to meet customized requests, such as potatoes could be small ones or large ones and it is difficult to communicate on exactly what a consumer wants,” added Vikas.
Fresh n Daily purchases goods directly from farmers or brand owners to ensure there are no intermediaries and subsequently offers discounts to customers. “In the beginning people are always wary about the freshness of the product, thus ensuring the best quality is what helps us retain our customers. And another interesting trend I have noticed is that it’s not only young tech savvy couples who are ordering online, but also many elderly people and housewives are opting for online requests,” said Vikas.
Started in 2009, Chennai –based Veggibazaar.com is one of India’s first online vegetables and fruit store. The startup is valued at about Rs 2 crores and has over 14,500 registered customers. Veggibazaar’s founder RK Venkatesan said the startup is now gearing up for the launch of its Coimbatore operation, scheduled in March, and is looking to start business in Bangalore, Gurgaon and Pune by April.
Veggibazaar sources most of their products from various farms in and around Chennai and uses packaging materials imported from US.
“Unlike other goods which are sold online, vegetable and fruits are ‘touch-n-feel’ products and as one of the earliest player in the sector, we have understood that to grow in the sector, it is very important to be at parity with your customers,” Venkatesan told YourStory. “If you look at the market today, new players are entering the sector every day. But many of them have also disappeared from the game because of the same,” added Venkatesan.
Veggiebazaar has monthly sales of about Rs20-25 lakhs and their cut vegetables are a rage with customers.
Started by Mitera Agrotech, Vegwala.com went live in December 2010. Coming from an agricultural background, its founder Santosh Patil said they procure most of their vegetables directly from farmers and depend on the market for items such as onion, tomato and gourds that are sold at a bulk. Based in Bangalore, the startup caters mostly to the IT crowd in areas such as Marathalli, Brookfield and is planning for a pan-Bangalore service in the coming months.
Vegwals’s monthly turnover is around Rs 5-8 lakhs and the most popular items sold are onion, potato, beans, lady’s finger, cauliflower and dairy products , which they have recently introduced to their offerings.
“We have over 4500 registered customers and we sold about 10,000 vouchers in a period of two weeks when we partnered with snap deal for a special offer,” Santosh said. The items, which are not sold within 24 hours, Santosh and his team at Vegwala donate or distribute them before they lose their freshness.