An epidemic brought growth to the track that the giants were already watching, and it also attracted new giants.

Welcome to follow the overseas WeChat account (ID: wow36krchuhai) to get the latest information in time and understand the new global trends. At the end of the article, scan the code to follow and join the overseas community, and meet global business partners.

Key points:

  • In China, fresh groceries e-commerce companies focus on “fresh food”, but some Indian players have selectively abandoned this category.

  • Besides the integrated fresh and grocery e-commerce platform, players focusing on more subdivided categories have emerged. Milk and meat are among the popular categories.

  • During the epidemic, Indian fresh grocery e-commerce ushered in an increase in orders, and at the same time ushered in JioMart backed by a strong backing. These old players seem to have begun accelerating integration.

“They said, never waste a crisis.”

On May 23, Reliance Retail CEO Damodar Mall said on Twitter. On this day, Reliance Industries, a subsidiary of Asia’s richest man, launched the e-commerce platform JioMart and began selling food and groceries.

The crisis described by Damodar Mall is undoubtedly the new crown epidemic. In 2020, the new crown pneumonia sweeps across China. In the two months when people’s homes were at home in the country, industries such as catering and offline consumption have taken a huge hit, while fresh grocery e-commerce platforms have ushered in double growth in traffic and users.

With the outbreak of the overseas epidemic, the same growth is also “replicating” overseas, including India, which has been “closing the city” for two months. According to Indian media reports, during the “closure” period, many grocery e-commerce platforms ushered in an increase in orders. Players who saw the opportunity poured in during this period, such as “Indian version of Meituan” Zomato, fintech company BharatPe, and social e-commerce platform Meesho. And the e-commerce products of the Reliance Group mentioned above JioMart was also officially launched during this period and has covered 200 towns.

What kind of market is India’s fresh grocery grocery market? Did the epidemic bring about short-term growth or long-term transformation? Is it time for Indian fresh groceries to go from offline to online?

Similarities and Differences of Fresh and Groceries E-commerce

During the epidemic, online squatting and grabbing food were once a part of people’s daily lives. Whether it is daily premium or Hema Xiansheng, “fresh” is a key part of these new Chinese fresh grocery e-commerce.

In India, the situation is different.

In the Indian grocery e-commerce track, the “highest presence” are Bigbasket, Grofers, Amazon (including Amazon Fresh and Amazon Pantry), Flipkart (under Flipkart Supermart) and new player JioMart. Among them, Bigbasket and Grofers are one or two in this vertical field.

In terms of categories, unlike the Chinese players’ focus on fresh food, these comprehensive grocery e-commerce platforms still focus on cereals, oils and rice noodles, processed foods, daily necessities and other categories, only Bigbasket covers more SKU of fruit, vegetable and meat. Grofers directly discarded fruits, vegetables and meat. Flipkart Supermart and new player JioMart both discarded meat. Amazon Fresh also has very few meat SKUs.

It’s reasonable for Indian players to give up on fresh produce such as fruits, vegetables and meat. From fruits to vegetables and meat, the cold chain is the basis for the distribution of fresh food, but the cold chain in India is clearly not yet in place.

Ram is the sales director of Intello Labs, an agricultural technology company in India. The company’s main business is the development of software and hardware to monitor the quality of fruits and vegetables. He told the sea that India’s cold chain is very broken, and many times there is no cold chain. “For example, in India, we will harvest apples from different places, and then transport them to the foot of the cold mountain for storage, and then sell them out after a while.” And the entire transportation process is usually not temperature controlled.

Indian consumers areAmazon Fresh complained about buying a broken onion

The broken cold chain caused high cargo damage. Ram revealed that the loss rate of fruits and vegetables in India is around 40%. The same data also appeared in a report by Forbes India. While China’s cold chain loss rate is about 15%, the United States is only 5%.

Among several Indian grocery e-commerce star players, Bigbasket and Grofers accounted for 80% of the Indian grocery e-commerce market share, while Flipkart and Amazon only received 5%. The remaining 15% is divided by some small players, including some subdivision track players.

In the “2019 China Fresh Food E-commerce Industry Research Report”, iResearch divided the business model of Chinese fresh e-commerce into a traditional fresh e-commerce model and a new type of fresh e-commerce, the latter including the home model , To store + to home mode and community team formation mode.

Among them, the definition of the traditional fresh e-commerce model is that fresh products are directly distributed to consumers through self-built logistics or third-party logistics through the Internet. This mode is characterized by a large delivery radius (above 10 kilometers) and a long delivery time (1-2 days). Bigbasket and Grofers have similar business models, but they are not exactly the same.

Bigbasket and Grofers are similar in that, in terms of brands, both Bigbasket and Grofers have adopted a combination of self-operated and third-party models. According to a 2018 report from Forbes India, self-owned brands account for about 30% of sales on both platforms. The scope of business development of the two is also roughly the same, both of which have opened more than 20 cities, mainly in first- and second-tier cities. At the same time, Bigbasket and Grofers have also launched membership subscription services, members can enjoy exclusive products, reduced shipping and priority delivery and other services.

The difference is that Grofers seems to be taking a low-cost route. According to Grofers CEO, its self-owned brands have more price advantages. At the same time, on its official website, the words of high price refund can also be seen under the non-self-operated brand. However, these non-self-branded products on the Grofers platform will not be much cheaper than competitors (BigBasket, Amazon Fresh and other platforms).

Grofers official website can see the word low price refund

Grofers CEO Albinder Dhindsa said in an interview with Indian media YourStory that Bigbasket serves head users who usually buy fresh products such as fruits and vegetables in online and offline supermarkets, while Grofers’ target users are kirana (India) who usually lives around their homes. Ordinary couple who buy fresh products). These users are more sensitive to price, but have no particularly high requirements for timeliness. Therefore, Grofers does not provide intraday service. At the same time, these users will not buy fresh fruit and vegetable products online, which is why Grofers gave up such products. In terms of delivery method, Grofers cooperates with local merchants including Kirana, gym, beauty salon, etc. These merchants will be responsible for the last mile delivery, and consumers can also choose to pick up.

Bigbasket, which is richer and thicker, is trying more ways to play, such as working hard on vegetables and fruits and meat on other comprehensive grocery e-commerce platforms. According to reports, 80% of Bigbasket’s fruits and vegetables come directly from farmers. At the same time, it also serves B-end users such as schools and restaurants. In metropolises such as Delhi, Mumbai, and Bangalore, Bigbasket has also partnered with offline franchise stores to launch a 90-minute delivery service (similar to JD Daojia). In addition, it is also exploring BB instant, an unmanned vending container, and BBDaily, a micro delivery service.

It is worth mentioning that micro-delivery is one of the more popular concepts of grocery e-commerce in India. On large platforms such as Bigbasket and Grofers, consumers need to purchase a certain amount to start shipping or free shipping. However, there is no such requirement for micro-delivery. Consumers can only buy a small amount of goods at a time without paying delivery fees.

Most small-volume players started with milk distribution, and later expanded into more categories, such as bread, eggs, butter, and juice. Indians have a huge demand for milk, and many families have the habit of ordering milk. According to Statista data, in 2019, India is the country with the largest milk consumption in the world. The milk consumed by Indians in a year is equivalent to the sum of the EU, the United States, China and Brazil (consumption 2-5).

Another segment that has attracted many players is meat e-commerce. Although allAs we all know, India has a large number of vegetarians, but non-vegetarians still account for about 70% of India’s 1.3 billion people.

India’s meat sales are highly fragmented. Most supermarkets will give up meat. Only some hypermarkets will have dedicated meat sales areas. Roadside butchers are the choice for most consumers to buy meat. However, due to the broken supply chain, in order to make the meat look fresh, many meat stores are injected with chemicals.

So in order to solve the pain point of “eat fresh meat”, some meat e-commerce appeared. They will build their own cold chain, and the supply chain end is directly linked to farmers or fishermen. Starting from meat or seafood, these platforms have also begun to cover more categories, such as vegetables.

The track where giants gather together

As a vertical track in the e-commerce field, Indian grocery e-commerce has attracted too many giants. In addition to e-commerce head players Amazon and Flipkart, Bigbasket and Grofers have also received funding from Alibaba and Softbank, respectively. The former is already in the Unicorn Club, and the latter is also valued at $700 million.

In addition, Dunzo, the “India version of flash delivery” that undertakes grocery delivery business, also received Google’s investment last year. Swiggy, one of the “Indian version of the US group” endorsed by Naspers, and Zomato, the “Indian version of the US group” that joined during the epidemic, are also carrying out grocery delivery services.

The epidemic is like a catalyst. In addition to Zomato, e-commerce platforms Snapdeal, Uber, Dominos (selling pizza) and social e-commerce Meesho have all launched grocery delivery services.

Ninjacart, an agricultural technology supply chain company that has been focusing on 2B before, also launched the 2C fresh service like American cuisine during the epidemic. However, Ninjacart’s gameplay is more like community group buying. Ben Mathew, director of business strategy at Ninjacart, said in an interview with Indian media Inc42 that their model is to send a person from the company or select a person from the community. This person is responsible for collecting a list of needs from community members and feeding it back to Ninjacart. In this way, Ninjacart can reach people who have no previous experience in buying groceries online.

As a subset of e-commerce, why is online groceries in India so lively?

On the one hand, similar to China, India’s grocery e-commerce platform also experienced growth during the epidemic. Hari Menon, CEO of Bigbasket, told the Indian media ET that before the outbreak, PingThe number of Taiwanese orders is about 150,000 orders a day, but it increased to 300,000 orders during the epidemic. The CEO of Grosfers also said that the daily order value during the outbreak was 60% higher than before the outbreak. At the same time as the orders grew, the shortage of personnel and supply chains that China’s fresh e-commerce companies had experienced were also staged in India.

Under such circumstances, e-commerce and taxi platforms are shifting to grocery delivery, which can not only relieve themselves of the difficulty of having no one to pick up, but also share the pressure of the skyrocketing orders for original players such as Bigbasket and Grofers. During the outbreak, Bigbasket chose to actively embrace Uber and Rapido to ease the pressure on delivery.

But overall, the epidemic’s role seems to be only fueling the situation. JioMart started a small-scale pilot as early as December last year, and COO Mohit Sardana of Zomato told Inc42 that grocery delivery has always been one of the company’s visions.

The deeper reason may be that, on the one hand, the consumption of fresh groceries is more frequent than the categories of clothing and electronic products. On the other hand, in a country with a per capita GDP of only more than 2,000 US dollars, the money in Indian consumers’ pockets is still mainly spent on food and fast-moving consumer goods.

Rajnikant Sabnavis is the CEO of Future Consumer, a subsidiary of the Indian retail giant Future Group. He has more than 20 years of experience in the Indian retail industry. He told Outsea that about 30% of Indian people’s pockets are used to buy food, which is relatively low among the richest 1% group, between 10%-15%, and ordinary people about 50% -60% of the money is spent on food. The USDA ERS data shows that China’s food consumption expenditures account for about 20% of the total consumption, while the United States, Singapore, the United Kingdom and other countries account for less than 10%.

Another set of data is more intuitive. According to data from Redseer, an Indian management consulting firm, in 2018, India’s entire retail circuit was about $800 billion. In another report, it also mentioned that the Indian grocery market is about more than 500 billion US dollars. According to this calculation, groceries account for about 60% of India’s entire retail market share.

Although the online grocery track became more lively during the epidemic, the overall penetration rate of online grocery in India is still very low. Redseer data shows that of the US$500 billion in the Indian grocery market, online groceries only contributed about US$1 billion, with a penetration rate of only 0.2%.

In fact, despite big players such as Bigbasket, India’s grocery market still has about 90% market share in the hands of Kirana. And these online grocery players are also mostlyDid not run out of first- and second-tier cities.

JioMart’s entry may change this situation. JioMart is a grocery e-commerce platform launched by Reliance Industries, the faithful group of India’s richest man.

For grocery e-commerce platforms, JioMart is undoubtedly a strong opponent. As the youngest player in this market, JioMart has announced its entry into 200 towns, almost 10 times the number of Grofers and BigBasket, and its backing should not be underestimated.

We have previously worked on “Crazy Saving, Strength and Ambition of the Richest Man in Asia” As mentioned in the article, JioMart is jointly launched by Reliance Industries’ Jio Platforms and Reliance Retail.

Jio Platforms is the parent company of Reliance Jio, India’s largest telecommunications operator with nearly 400 million users. Currently, it has obtained star capital and Internet giants from Facebook, KKR, General Atlantic, and UAE’s sovereign wealth fund Mubadala. 15 billion US dollars, Microsoft has also been exposed that it will inject funds into Jio Platforms.

And Reliance Retail is the retail business line of Reliance Group. The business was born in 2006. It includes Reliance Smart and Reliance Fresh, wholesale stores, Reliance Market, electronics chain Reliance Digital, lifestyle retail chain Trends, and jewelry chain Reliance Jewels. It is one of the largest retailers in India. . The official website shows that Reliance Retail operates more than 10,000 stores in more than 6,700 cities.

Reliance Fresh and Reliance Smart, chains of Reliance Retail, currently support JioMart operations, both are JioMart’s off-the-shelf sources. The official website shows that Reliance Fresh and Reliance Smart have a total of more than 600 stores.

Before JioMart was officially launched, Jio Platforms also received a $5.7 billion investment from Facebook, and Facebook acquired a 9.9% stake in the company. This round of investment also marks the beginning of the collaboration between Jio Platforms and Facebook.

The first exploration carried out by the cooperation between the two was the launch of a JioMart business account on WhatsApp. In this way, WhatsApp users only need to send “Hi” to their account, they will receive a link, click on the link will enter a small store, the user can select products in this small store. After users place an order through the link, JioMart will automatically assign them a nearby kirana store. According to TechCrunch’s previous report, 1,200 stores have participated in the project.

However, after JioMart started to roll out in 200 towns, the above business seems to have been suspended. Going to the sea to try to send a message to his account, all he received was a link to JioMart’s official website. According to the Indian media ET quoted Credit Suisse (Credit Suisse) report, JioMart’s work to go to Kirana is still in progress.

It is unclear how much impact JioMart will have on big players like BigBasket and Grofers. However, veteran players have already begun to take action-both Amazon and Flipkart have launched projects in collaboration with Kirana.

More mergers and acquisitions and integration also seem to be happening. In March this year, Bigbasket acquired DailyNinja, a small distribution platform, which seemed to be just the beginning. With the capital environment getting colder and giant players pouring into the track, small players like DailyNinja may find it harder to find new funds and eventually have to embrace large players.

It is reported that besides DailyNinja, Bigbasket is also talking to Milkbasket about acquisitions. It seems that the Milkbasket is not limited to the Bigbasket family. According to the Indian media Entrackr, Paytm Mall also wants to invest in Milkbasket. At the same time, SoftBank seems to be working hard to facilitate Paytm Mall mergers and acquisitionsGrofers, and Grofers were exposed in April for early merger negotiations with Zomato. In addition, Bigbasket, which has just obtained Alibaba’s $50 million in debt financing, was also exposed to seeking new funding.

With the relaxation of India’s “closing the city” order, some players who entered the track during the outbreak may withdraw. According to the Indian media Entrackr, two sources said Zomato is planning to shut down the new business of grocery delivery. Zomato responded by saying that the company will continue to provide customers with essential goods delivery services, but as India’s “closing city” relaxes, Zomato will spend most of its time on the safest and most popular food delivery services.

A new crown pneumonia has brought growth to India’s fresh grocery e-commerce track and has also attracted giants. Now that the “closure” is relaxed, new players seem to have begun to withdraw, and the orders that grew during the epidemic may soon fall back. But the capital was cold in winter, the track was crowded, and the giants were still on the field. In the future, India’s fresh and grocery e-commerce track may usher in a more intense battle.

文｜雅琪@出海

Edit|Zhao Xiaochun@出海

Figure｜Unsplash

On the 23rd of this month, at 14 o’clock in the afternoon, the first phase of the [Globiz-Overseas Southeast Asia] online salon event will be held. At that time, we will invite the Vice President of Microsoft Greater China, Qiming Venture Partners, Alpha JWC Twelve seniors, including partners and President of Bukalapak, brought a truly valuable industry exchange. Scan the code to pay attention to the public account of “Going Out” and “interact” with the private assistant, and win the opportunity to interact with the guests to ask questions. After the meeting, you can get the guest PPT.