The online business dealing in essential and daily use stuffs like grocery, fruits and vegetables has had the best time in the last almost a month of nationwide lockdown. If at all, they are unable to service the volume of orders they are able to secure from their customers primarily due to shortage of workforce as well as disruption in the supply chain. Grofers, one of the first startups to enter the online grocery business, is now keen to grab the opportunity thrown its way with both hands and is investing $15 million in its private labels, as per a report in the LiveMint.
For the record, the company claims its business will have 60% private labels across various categories and this proportion will keep increasing. The company had stated in 2018 itself that it would want to deal in 100% private labels by the year 2021. They seem to be racing towards this goal.
Private labels give them a slightly higher margin than in stocking known outside brands. At times like the present lockdown, the dependence on supplies from third party sources can prove to be disastrous if it fails. Grocery business is by nature a thin margin business when compared to the efforts to be put in to secure the business and make deliveries. Every rupee counts. Beyond this $15 million, another $50 million will be spent over the next two years by Grofers for the same purpose, strengthening private labels and supply chain. Some of the private labels you will find on the Grofers site include G-Brand Mother’s Choice, G-Fresh, G-Happy Day for premium products as well as HappyHome and SaveMore for the budget categories.
In a typical online to offline model, Grofers’ privatle label products are sold through kirana stores. The number of such stores stocking their products is now only 350. This is being taken to 2,000 in the near future, says the company. To facilitate this and to effect last mile deliveries, the company plans to open smaller warehouses close to delivery points.
In cities like Bengaluru, Grofers has started making bulk deliveries to the apartment blocks, collecting weekly orders instead of having to make multiple trips to the same apartment complex. They say over 1,000 such apartments have been covered so far.
Coming back to the hiring of personnel, Grofers says it has already hired around 2,500 people and hopes to get 5,000 more in the coming days. It is providing them with the required training and quickly deploying them to the various tasks. These are workers displaced from other industries due to the lockdown.
Grofers has a model where it works with local kirana stores to make the last mile deliveries and this is also being expanded.