Here is a list of five grocery startups that have mushroomed in places that are not Tier I cities.
A hard nut to crack, online grocery is a sector which has seen the death of quite a few well-funded startups – Peppertap. Askmegrocery, and LocalBanya among them.
Even Paytm, in 2015, had forayed into the grocery sector with Paytm Zip, only to shut it down in three months. Ecommerce market leader Flipkart also burnt its hands a while ago, and has been trying to rebuild it in the past one year.
Presently, the online grocery sector is ruled by BigBasket, Grofers, and Amazon, with a major chunk of their revenue coming from tier one cities. But in India’s online grocery market worth $1 billion, tier two cities are not much behind in potential for online grocery’s growth. Already, BigBasket and Grofers are expanding outside the metro cities.
With rising internet penetration and increasing number of mobile internet users, startups are mushrooming in state capitals which are not Tier 1 cities. Most of them are bootstrapped, yet reaching out to the masses despite the big-pocketed players establishing themselves. Find out more:
Launched under Shaandhaar E-Commerce Pvt. Ltd. at Hubballi, Karnataka’s second largest city after Bengaluru, Flipfresh serves fresh vegetables, fruits, groceries, and household items to the online shopper. Founded by Amruthashva T, Suresh Nekkanti, and Manjunath Najaladinni, Flipfresh follows inventory model. Based out of the Tier 2 city, Flipfresh buys fruits and vegetables directly from the farmers in and around Hubballi. This benefits farmers, as there are no middlemen, and customers as they get access to fresh products.
Launched in August 2014, ShopitDaily serves in Indore, and Vadodara with more than one lakh orders per month. It recently launched in Bengaluru too. ShopitDaily offers a 90-minute-delivery proposition to customers within 25 kilometres of city limits. The service also caters to canteens at corporate houses and companies along with retail segment. Apart from online, the service can be availed over phone and WhatsApp. Co-founded by Abhishek Bhatt and Saurav Shrivastava, it is targeting Tier II cities like Bhopal, Udaipur, Dewas, Ujjain, Surat, Rajkot, and Jaipur.
Launched in April 2014, PinkCityKirana is an ecommerce, phone-commerce entity specialised in grocery home delivery including kitchen essentials, pet food, and toiletries. Software engineers Sudesh Patodiya and Sandeep Agarwal founded PinkCityKirana along with Sandeep’s brother Rahul Agarwal, a commerce graduate, who was in the wholesale grocery business in Jaipur.
For a minimum order value of Rs 800, it delivers with online payments, cash on delivery, and card on delivery options. PinkCityKirana’s average basket size is Rs 1500.
Online grocery is not a sector where the winner takes all. In the US, InstaCart and Amazon-owned Whole Foods continue to rule the sector. But in India, since the market is in its early stages, the endgame of the tier two startups is yet to be seen.