Nitin Sawhney, Founder, iOrderFresh, an online grocery start-up focusing on fresh food, speaks to Progressive Grocer about the way he sees online grocery evolving in India and how his platform is geared to encourage consumers to use technology for grocery shopping
How was iOrderFresh conceived and what is unique about it?
The genesis of this business idea was simply the glaring supply chain gaps in the fresh food categories (especially fruits and vegetables). We knew that retail prices of fresh products have a 100 per cent markup on wholesale cost and probably 150-200 per cent markup on production cost. Still it is not a case of supernormal profits for either the wholesaler or the retailer. A major portion of this margin is eroded within the supply chain due to the perishable nature of the products. Hence, we saw an opportunity to plug the gaps in the supply chain by getting products from farm to kitchen in 12 hours, avoiding wastage and pilferage, which would allow us to make decent margins while offering a fair price to the end consumer. What makes iOrderFresh unique and a safe option is that we do not believe in night inventories and have only two delivery slots a day to ensure the freshest produce is being sent to consumers day after day.
What is the overall market size of the online grocery industry in India and what is its rate of growth?
It is one of the biggest consumer segments in the country currently valued at US$ 330 billion with expected market size of US$ 1 trillion by 2020.
In India, the online grocery market is evolving. What scope does it offer to you?
We feel that a revolution is in the making as far as shopping for fresh food and grocery online is concerned. It is a delicate supply chain and an extremely localised business. We believe that there will be multiple winners in this space and speciality retailers will find a ready audience for their offerings.
Tell us about iOrderFresh’s current range of operations.
We offer over 12 categories and deliver across the length and breadth of Delhi-NCR. Our focus is fresh food and hard-to-find premium groceries and exclusive partnerships with iconic brands like Natural ice cream. We have added fresh cut flowers to our range of products and will be introducing fresh chakki flour soon (another first in the e-grocery space).
How many orders are you getting currently?
We serviced over 1,000 orders a day in September 2015 and are looking at a quarterly growth of 20- 25 per cent for the next 12 months.
What product assortments do you bring to the table?
In the fresh food category, our assortment includes fruits, vegetables, cow milk, meats, seafood, flowers, dairy items, bakery items, handmade chocolates, Natural ice cream. In the packaged catgeory, we sell grocery items, bakery, frozen foods, dry fruits, and beverages. We have a special assortment for organic products comprising grocery, milk and dairy products. We will be soon adding vegetables and fruits.
Tell us about your marketing and promotional strategies.
It’s primarily through social media and online mediums. We also undertake direct consumer interaction programmes in residential societies and office complexes. Our mainstream media campaign will be ready in the next quarter.
Technology is integral to modern retail, more so for e-commerce. How are you leveraging technology at iOrderFresh?
We are primarily a technology platform allowing consumers to find what they are
looking for with minimum effort. Technology has been the core of our organisation from the start and we have many industry-first features in our Mobile App i.e. user referral programme, providing credit limits to customers (like your neighbourhood kirana store), auto-ship orders for regular items like fresh milk, re-order using earlier shopping lists, etc.
Who are your competitors in the industry and what is your strategy to compete with them?
We see no other player trying to solve the problem of fresh food for our customers. So our main competition is ‘inertia’ on part of the customer to use technology to do grocery shopping. E-retail giants like Flipkart, Amazon, Snapdeal also offer grocery.
As a startup what are your key concerns with regard to a situation where almost everybody in the online space is now looking at the grocery market pie?
We have defined our market very clearly and are not trying to solve too many problems at once. We see our business model to be self-sustaining and one that promises positive unit economics.