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ZopNow to enter high growth phase in 2017; targets US $100 million GMV


ZopNow, the technology platform for online groceries which has over 25,000 products in its catalogue, including fresh fruits and vegetables and high quality staples with a 7:00 am delivery promise is targeting US $100 million GMV in 2017.

ZopNow to enter high growth phase in 2017; targets US 0 million GMV
Given the prime location of stores and asset-light model, its already optimized last-mile delivery costs have been on a downward trend, while sales has been progressing upwards without burning too much on expensive channels

While many other players have put brakes on expansion in 2016, ZopNow has quietly launched its services in 10 major Indian cities and continues to grow at a fast pace, hopeful of entering into a high growth phase in 2017.

CEO, ZopNow, Raj Pandey says, “E-grocery is a massively under-penetrated opportunity but there is potential to burn a lot of money either on supply side or logistics side, if product is not well thought out. Over the last three years we have created an ecosystem of sophisticated suppliers and best-in-class technology to provide max range to consumers at lowest logistics cost.”

He further adds, “While the market opportunity is US $25 billion plus in next four years and US $100 million GMV is easily attainable, a healthy and sustainable ecosystem is what we have worked on. We now have battle tested technology and the desired footprint of partner warehouses to turbo-charge our growth in 2017.”

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The brand plans to grow deeper in its current markets by expanding its partnerships. Given the prime location of stores and asset-light model, its already optimized last-mile delivery costs have been on a downward trend, while sales has been progressing upwards without burning too much on expensive channels. The brand plans to achieve its growth target by leveraging these advantages and getting its customers to be its brand ambassadors.

Business Model

The brand whose average ticket size is Rs 1,200 – Rs 1,500 has put up an automated workflow for replicating the offers that one sees on the shop floor of its retail partners. With this, it hopes to provide its users with the latest and the most popular offers or promotions that are available at any store. This coupled with large range and loyalty program embedded in technology helps it drive up the ticket size.

Its app contributes approximately 60 per cent to total business while the website contributes the remaining 40 per cent.

Highlighting their business model, Pandey says, “We operate by tying up with major retail partners like HyperCity, More, Metro and Star Bazaar and using their inventory and large range to cater to our customers. Our technology platform allows us to sign up any new partner with a go-live period of barely 7-10 days. Once the partnership commences, we take care of the rest and the store becomes active as one of our fulfillment centers.

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He further says, “Given the close proximity of these large fulfillment centers to customers, we are able to offer delivery slots spread across the entire day starting at 7:00 am and ending at 10:00 pm. Prime location of our fulfillment centers coupled with our intellectual property helps us drive lowest logistics cost in industry. This model also helps us in providing maximum range, maximum convenience and maximum savings to our customers.”

Growth Strategy

ZopNow to enter high growth phase in 2017; targets US $100 million GMV

ZopNow is also offering e-grocery as a Service (SaaS) solution to large brick-and -mortar retailers that want to go online with a proven technology platform. It launched online retail stores for More and HyperCity along with their branded apps. The entire technology and operations – though powered by ZopNow – provides a seamless Omnichannel shopping experience to customers of these retailers. ZopNow is taking the SaaS model global with Middle East and South East Asia as immediate markets.

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Founder, ZopNow, Mukesh Singh says, “E-groceries have idiosyncrasies that require a highly specialized platform compared to other e-commerce verticals. Our SaaS customers value the fact that our best-in-class technology is actually a solution that has worked with multiple grocery chains, unlike other generic out-of-box solutions. This provides us an additional avenue to monetize the IP we have built.”

Impact of Demonetization

In the recent demonetization policy by Government, as market witnessed a swift decline in hard cash and with people opting for plastic money, card and e-wallet transactions on ZopNow platform have grown more than 50 per cent along with 35 per cent increase in growth of new customers compared to the period when Rs 500 and Rs 1,000 noted were a legal tender.

“Online grocery industry seems to be unintended beneficiary of the move as the customer cannot postpone essential purchases for her home,” Pandey reveals.

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Success Story

Founded in September 2011, it was among the early starters in India’s online grocery business and continued to grow from strength to strength. Although it started off as an inventory-keeping online retailer, it shifted the focus later to building a smart and efficient technology platform for powering online retail.

It signed up HyperCity as its first partner for this strategy and re-launched operations in Bangalore. Within a year of its launch in Bangalore, Mumbai, Pune and Hyderabad it was successful in sealing another partnership with ‘More’ chain of hypermarkets and supermarkets.

Until 2014, ZopNow was running on a completely owned-inventory model which required enormous resources and in direct competition with both online and offline retailers. But the e-grocer restructured its operation to a 100 per cent inventory free model and today it’s not only bringing value to end consumer but along the way has forged long-term partnerships with players like Aditya Birla Group, HyperCity, Metro and StarBazaar among others.

At present, ZopNow is operational in 11 cities including Delhi, Ghaziabad, Faridabad, Noida, Gurgaon Mumbai, Pune, Hyderabad, Bengaluru, Chennai and Mysuru.

Future Plans

ZopNow plans to go deeper in cities it serves currently and promote its loyalty plan which gets its customers gifts and benefits worth up to Rs 1,500 every month. The loyalty plan has proven quite successful in increasing the average basket size of its orders. With higher repeats and better basket size, the brand is now turbo-charging optimal customer acquisition channels. It is also focused on increasing general merchandise category.

“At the moment we are focused on our business and strategic partnerships in India and abroad. We will raise funds at the opportune time. We will be utilizing the funds to increase our brand awareness and scale up our presence in cities that meet our criteria,” concludes Pandey.