How Grofers, Dunzo, and BigBasket are fighting the onion battle as rising prices reduce consumers to tears

As prices of onions soar close to Rs 200, Indians are literally and figuratively in tears to get this essential ingredients in their day-to-day meals. And like everything else, the startups seem to have a few solutions.

Online grocers and hyperlocal delivery startups are working hard to bring smiles on the tear-stained faces of their customers.

BigBasket, Grofers, and Dunzo are selling onions priced between the range of Rs 87 and Rs 140. For the past few weeks, onion prices have been a cause for concern and the butt of internet jokes. The price of the vegetable had shot up due to 26 percent decline in production during the kharif season of 2019 to 2020, caused by prolonged and untimely rains.

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In a true sense of internet entrepreneurship and push, hyperlocal delivery startups have turned the increasing demand to their advantage. This reduced pricing for onions works in favour of both the consumer and the startups. Not only do consumers get the opportunity to buy onions, startups have also increased footfalls and orders.

This strategy also works as a great promotional tool, where the customer can build a basket around a currently scarce product. Hari Menon, Co-founder and CEO of BigBasket, says,

"The pricing works because there is an element of buying and storage that we do. We earlier had procured the onions from Nashik and have been able to stock them. And meet the need of the consumer."

As far as the government is concerned, it has given its approval to import over 36,090 metric tonnes of onions from Egypt and Turkey. India had last imported close to 1,987 tonnes of onion in 2016. This is the only time in the last five years that India has had to import onions.

India’s online grocery space is worth $1.2 billion, says a RedSeer report. The research firm expects the online market to grow at 50 percent for the next few years.

Selling onions at discounted rates is also an easy way to ensure consumers buy more groceries and vegetables online, which even today is considered to be a largely offline market.

(Edited by Dipti Nair)

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