Online Grocer ZopNow Targets USD 100 Mn This Year
ZopNow, an online groceries retailer, which started in 2011 by Mukesh Singh, and is now under the leadership of CEO Raj Pandey, launched its services in ten major Indian cities and is planning for more expansion. The business started growing in the last five years owing to the ever-growing usage of mobile devices and broadband penetration in the country, and the need to have access to fresh items at affordable pricing.
Increasingly, players in the retail market are introducing e-commerce models which offers immense liberty and comfort to tech-savvy, time-crunched consumers to get goods and services delivered at their doorsteps. According to a TechSci Researchtitled “India Online Grocery Market By Product Type, Consumer Behaviour, Competition Forecast and Opportunities, 2011 – 2021”, the online grocery market in India is projected to grow at a CAGR of 55% during 2016 – 2021.
From its humble beginnings, Zopnow now has over twenty-five thousand products in its catalogue. This including fresh fruits and vegetables and high quality staples, with a 7 AM delivery promise. ZopNow is targeting 100 million USD in 2017. While many other players have put brakes on expansion in 2016, Zopnow has quietly launched its services in ten major Indian cities and continues to grow at a fast pace. Therefore, the company is entering into a high growth phase in 2017.
Pandey said “eGrocery is a massive underpenetrated opportunity but one where 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. While the market opportunity is more than $25Bn in next four years and $100mn (gross merchandise volume) 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”
According to Ken Research, the groceries segment holds a share of 60% out of the total market value of Indian retail market as food is the basic requirement of all the people irrespective of their class or society status. Online groceries market refers to the purchase and sale of groceries over the internet. Although, this process was initially implemented in the west, but this industry has been an emerging industry in India. The first firms that were founded in this segment of total retail were formed in 2011. Since then this industry has expanded at a commendable pace and has attracted huge investments by venture capitalists and angel investors alike.
Untill 2014, Zopnow was running on a completely owned-inventory model which required enormous resources and in direct competition with both online and offline retailers. Since then, Zopnow has restructured its operation to a 100 percent inventory free model and has forged long term partnerships with players like Aditya Birla Group, HyperCity, Metro, StarBazaar among others.
Growth strategy for ZopNow
ZopNow is also offering eGrocery 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 Aditya Birla Group owned More and HyperCity along with their branded apps. The entire technology and operations - though powered by ZopNow - provides a seamless Omni channel shopping experience to customers of these retailers. ZopNow is taking the SaaS model global with Middle East and South East Asia as immediate markets.
Founder Mukesh Singh asserted, “eGroceries has 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”
In the recent demonetization policy by government, as market witnessed a swift decline in hard cash and with people opting for plastic money, cards and e-wallet transactions has grown more than 50% on ZopNow platform, it also saw 35 percent increase in growth of new customers. Pandey opines that online grocery industry seem to be unintended beneficiary of the move as the customer cannot postpone essential purchases for their homes.
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