This Diwali, India’s top ecommerce companies will start their market share battle with dal/chawal. Not just BigBasket and Grofers but Amazon and Flipkart, too, will kick off their festive period efforts with big sales events in the grocery space, according to brands and marketplaces ET spoke to. Amazon and Flipkart’s big grocery push is triggered by Reliance JioMart’s entry, market observers said.
These platforms are looking at the last week of September to begin the special festive sales, which will continue all the way till Diwali in the second week of November, brands told ET.
“This year, the festive sale period will be longer, beginning with grocery, and peaking with high-value product (electronics and appliances) offerings during Diwali. Throughout (the sale period), there will be grocery events in multiple phases across marketplaces,” said a top executive at an ecommerce company.
In July, JioMart claimed to be delivering over 4 lakh orders daily, across 200 cities, in less than two months of launch. ET could not verify this claim. BigBasket, founded in 2011 and present in 30 cities, fulfilled 1.6 lakh orders daily during the first phase of the lockdown that saw many restrictions. Grofers’ numbers stood at around 90,000 per day at the time.
The model for JioMart, however, differs since it relies on local kiranas where order fulfilment rate remains unknown, while BigBasket and Grofers operate their full facilities.
“JioMart has clearly accelerated the pace of grocery focus in ecommerce. The battle will be closely watched this year,” said an investor in the technology space.
Ecommerce majors have been ramping up their efforts as well. Flipkart, for instance, has enabled a voice-powered search experience on Supermart and expanded its service to cities such as Mysore, Warangal, Alwar, Aligarh, and Agra. Just last month, the Walmart-owned retailer also launched a 90-minute grocery delivery service in Bengaluru. For context, last year, Flipkart’s grocery service was limited to Bengaluru.
Since last year, Amazon has expanded its presence in “fresh” foods across six cities including Delhi-NCR, Mumbai and Bengaluru. In June this year, the company also expanded its Amazon Pantry, or grocery and household needs service, to about 300 towns. “Amazon Pantry will start its sale in the last week of September followed by its week-long Super Value Day sale,” said a brand directly aware of the preparations.
Stakes are even higher in metros where there are multiple options, including Swiggy and Dunzo. Both hyperlocal players have also opened their virtual stores to cater to metro customers, with Swiggy offering deliveries in less than 40 minutes.
“All online platforms are showing a lot of interest this year…the category contribution has multiplied compared to last year while offline remains consistent…,” RS Sodi, managing director at Amul told ET. Amul expects khoya and kaju sweets, chocolates, and bakery products to do well during the festive season.
The pandemic has forced traditional FMCG retailers as well as modern trade stores to establish an online presence as a priority channel to reach customers as offline went through its set of disruptions during the lockdown. Now, even state governments, for instance in Maharashtra, are encouraging online shopping to curb the spread of the virus. “With the pandemic, when ecommerce became a critical conduit to meet consumer demand for essential goods, our role in enabling reach and demand fulfilment became further critical,” Flipkart said in a statement.
During the festive period, private-label offerings and overall assortment across categories are also going to be a key differentiator for customers making large basket purchases, BigBasket’s Hari Menon said.
Since the lockdown, BigBasket says its new customer acquisition grew threefold in terms of orders, compared to pre-covid, while retention of new customer cohorts has increased by 60%.
However, the hit on the economy and continued job losses across sectors is forcing customers to choose more affordable options, platforms say. “Currently, value-driven products have become more relevant than ever due to shrinking discretionary incomes,” said Albinder Dhindsa, CEO, Grofers, which has acquired 16 lakh new customers since the lockdown while retaining about 70% of them on the platform, as per its estimates.
