Tata group is the new entrant on the online grocery retailing space.
Trent Ltd, the group's retail arm that operates an equal joint venture with UK retail major Tesco called Trent Hypermarket Ltd, is testing the waters with an online grocery retailing pilot. The grocery e-commerce platform www.my247market.com is owned and operated by Fiora Hypermarket Ltd, a subsidiary instituted by Trent in March 2014, which also operates four stores in Gujarat and Tamil Nadu that have barred foreign direct investment (FDI) in supermarkets.
Noel Tata, chairman of Trent and managing director of Tata International, and Jamshed Daboo, CEO, Trent Hypermarket, could not be reached for a comment. Queries emailed to Tata group's media agency remained unanswered.
The Trent management has been tight-lipped about the online grocery retailing foray. “I do know they were planning something on these lines but was not aware that a pilot stage has been reached already. It will be interesting to see how the model gets rolled out in the coming months,” said an executive from one of the existing online grocery retailing platforms.
Though Trent operates supermarkets under the Star Bazaar banner, its association with grocery e-commerce platform is restricted to just being a supply chain partner for www.my247market.com. Fiora Hypermarket said on its website, “Our association with Star Bazaar is limited to sourcing our products from Star Bazaar. We also sell Star Bazaar and Tesco's own label products.”
In fact, customers will also not be able to earn or redeem Star Bazaar Clubcard loyalty programme points nor will be able to use Star Bazaar’s gift card/cash card to pay for purchases made on the e-commerce platform.
Given that fresh food forms a large part of customer order, deliveries will be made using temperature controlled vans to ensure right quality and freshness. The platform is currently only delivering to four pin codes (mainly in areas in and around Andheri) in Mumbai.
Among products being sold on the e-commerce platform include, fruits, vegetables, staples, meat, bakery and dairy products. This apart, there is a wide selection of packaged food, beverages, confectionery, baby care products, personal care products, home need products and pet care products. While there is a threshold for minimum order at Rs 750, if the total value of goods bought exceed Rs 1,500 deliveries will be free-of-charge else there will be Rs 50 (plus taxes) in terms of a delivery charge. In case of returns, the platform has a no questions returns policy whereby customers can return any product not to their satisfaction to the delivery associate at the time of delivery.
The Indian online grocery retailing space has seen significant action in the past few weeks where in India's largest e-marketplace Flipkart was reportedly said to be working on adding new categories particularly the grocery section. This apart, other e-marketplace operators – Amazon and Snapdeal – have taken initiatives to have fresh produce and grocery among various offerings on the platform.
Taking the neighbourhood kirana store online Amazon launched 'Kirana Now', an express delivery platform in partnership with mom-and-pop stores, while Snapdeal has got on board Godrej Group's food retail arm Godrej Nature's Basket that features 700-odd products particularly gourmet food to cater to food and grocery requirements. In fact, Godrej Nature's Basket on Monday said it has also partnered Amazon to sell its products through the e-commerce giant's platform in India.
Another major player is Mukesh Ambani promoted Reliance Retail that is already testing the online grocery retailing space with www.reliancefreshdirect.com across different pockets in Mumbai. Among other players operating as a pure-play e-commerce platform include BigBasket.com, Localbanya.in, go4fresh.in, ZopNow.com and Grocermax.com.
Commenting on the overall scenario in the online grocery retailing space and its possible impact on the offline / brick-and-mortar retailers, Arvind Singhal, chairman, Technopak – a domestic retail consulting firm, said that within the grocery segment, share of the organised players is the least. “In fact, share of modern retail in the grocery retailing space is the least as the unorganised segment continues to be the biggest.
"Given this scenario, I don't think online grocery retailing will have any impact on the business of offline players because the business hasn't even taken-off well in the organised category. The economy is growing and so is consumption so people will need to access these products offline or online. Besides, the pie-itself is so large that we have a huge room for everyone to grow in the coming years,” said Singhal.
He said that the total number of supermarkets in the country is between 1,000 and 1,500 while the total turnover is Rs 15,000 crore as against an overall food and grocery market size of Rs 20 lakh crore. “If the economy continues to grow at say 6% to 8% every year we will be adding $20 to $30 billion in growth primarily through food and grocery consumption. Online alone will never be able to address this growth in overall consumption in the country right now hence I don't think there will any impact on the food and grocery retailing sector going forward,” he said adding that this will drive other players like Bharti, Spencer's Retail and Aditya Birla Retail going forward.
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