Lucknow-based online grocery firm GharBaithay is trying to crack the $1.5B grocery retail market in Lucknow
Founded in June 2015, GharBaithay is a Lucknow-based on-demand hyperlocal delivery service for grocery and household items. Aishwarya Jaiswal, who is pursuing MBA, started GharBaithay in Lucknow as a part of his summer internship project at Delhi School of Economics to understand the nuances of e-grocery business both on the supply and the demand side. He then conducted a survey, listed pain-points and went door-to-door to ask people whether they would accept such services. Once he got positive responses from consumers, he decided to launch the website with an initial capital of Rs 50,000.
He spent the initial one week uploading the products, designing the website, negotiating with the merchants for margins, hiring delivery boys and more. Getting the first order and gaining the trust of customers to buy online was one of the crucial challenges.
Aishwarya says, “Today GharBaithay is operational in 10 apartments and 20 blocks (khands) in Gomti Nagar, Lucknow. We have already served more than 50 satisfied customers (during our testing phase) generating a revenue of Rs 1,50,000 since we start our journey. We did 400 transactions during the last month. Our average ticket size (order value) is Rs 1000 to 1200. On an average we click 12–15 orders a day.”
How GharBaithay works?
The Lucknow-based startup does not work on an inventory led model but follows Just in Time (JIT) model. Customers may order goods over the phone, website, and WhatsApp. Once the order is received, a confirmation message is sent to the customer and the order list is sent to the delivery boy who procures the order from the partner-kirana store and delivers it to the customer. At present, it has tied up with four departmental stores.
Aishwarya says, “We do offer discounts. In fact, most of the products are sold below MRP. We initiated one campaign, 'Le-Jao', where we offered customers one kilo mangoes free on orders above Rs 699. On Raksha Bandhan, we surprised our first 50 customers by sending chocolates to them. Engagements like these help us to better connect with our customers and work towards their delight.”
GharBhaitya offers over 1000 products across a wide array of categories such as salt, rice, flour, pulses, sugar, personal care products, baby care products, and more. It has a team of eight members, including four delivery boys.
Orders will be delivered on the same day if placed before 2 PM. However, orders which are placed after 2 PM, delivery will be done next day by 1 PM. The delivery boy will inform over the phone before arriving at the address and in case the concerned person is away from his address, he can give the address of his neighbor, the delivery boy will drop the order there and collect the bill.
As per the refund policy of GharBaithay, the prices of the products will be reimbursed to the customer within two working days only if there is any damage or poor quality of the products.
Aishwarya also mentions that they can cancel orders by their own discretion if they find any fraudulent transaction done by any customer or transaction which defies the terms and conditions of using the website.
He says, “We will maintain a negative list of all fraudulent transactions and customers and will deny access to them or cancel any orders placed by them.”
Personalising the shopping experience
GharBaithay claims that it does not disclose personal information about individual customers (such as name, address, e-mail address, and credit card information) to third parties.
Aishwarya says, “When you register with GharBaithay.com, you provide us with your name, billing and delivery addresses, e-mail address, telephone number, etc. You select a username and password allowing you access to the GharBaithay service. Your password should be kept strictly confidential to prevent unauthorised use.”
Road ahead
At present, GharBaithay is running on a ready-to-use website. By the end 2015, it will launch its own website and mobile app. The startup also plans to touch 500 orders per day and it will be focusing on areas such as Allahabad, Varanasi, Gorakhpur, and Kanpur in the next two to three years. In terms of revenue, it is likely to grow to Rs 30 lakhs by the end of this fiscal year.
Market overview
With the convenience of online shopping and the emergence of online grocery companies like Bigbasket, Aaramshop, Zopnow, Local Banya, PepperTap, Grofers and more, the online grocery business in India has seen a significant growth in the past couple of years.
Aishwarya says, “The size of the grocery retail market in India is about $350 billion and is growing at about 10 percent CAGR. Whereas the online grocery market comprises two per cent and is growing at a rate of 25–30 per cent in urban cities.”
The KEN Research report revealed that online stores comprise 10,000 stock keeping units (SKUs), whereas an average traditional storehouse offers product range below 1,000 SKUs. At present, Bigbasket is enjoying the lion’s share in the market followed by ZopNow. As earlier reported by YourStory, Bigbasket is currently operational in seven cities (including six metros) and it plans to expand to two more metros and 50 tier two cities.
Startups like GharBaithay is taking baby steps in this highly competitive industry and has a long way to go. However, according to Aishwarya, the size of the grocery market in Lucknow is USD 1.5 billion and the share of online is almost negligible. So, Lucknow as a market is still untapped and there is a huge opportunity waiting to be explored.