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Grofers joins express delivery rush amid online grocery boom


Mumbai | Bengaluru: Grofers has launched a 15-minute online grocery delivery service in Gurugram, cofounder Albinder Dhindsa wrote in a blog post on Tuesday. He claimed the company delivered groceries in over 7,000 households within 15 minutes on Monday.

The latest development marks the comeback of express deliveries—typically within an hour—among consumer-focused ecommerce platforms.

ET first reported this month that BigBasket, now owned by the Tata Group,
is set to launch its express delivery service soon with aggressive plans. In fact, we also reported in June that Tata-owned online pharmacy startup 1mg
is also planning to make a foray into express deliveries for medicines.

For Grofers, this is yet another attempt at express delivery, which is seen as a costly proposition since the average ticket size of these orders is smaller than planned grocery purchases. However, customers find value in quick deliveries and can be rewarding for platforms in the long-term, industry executives working on the vertical have told ET.

“Our work over the last five years allowed us the tools and the privilege of enabling an ecosystem that could promise to deliver groceries to every household in Gurgaon within 15 minutes,” Dhindsa said in the blog post.

Grofers is revisiting express deliveries at a time when
it is raising $120 million from Zomato and Tiger Global and the competition in the online grocery space has only intensified over the last one year.

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ET first reported about Zomato investing $100 million in Grofers as the now publicly traded food delivery company is looking to amp up grocery delivery with the help of this investment.

Read more on why Zomato invested in Grofers in ETtech Morning Dispatch.

Zomato’s management told us that for now its investment in Grofers is a financial one and that it will re-enter the space on its own soon by launching a grocery marketplace service.

Stiffer Competition

Food delivery firm Swiggy’s founder and chief executive Sriharsha Majety
told ET in a chat that it will use a significant chunk of its new $1.25 billion funding to expand hyperlocal grocery delivery through Instamart.

Detailing its express delivery launch, Dhindsa said that the first wave spurred the company to add more local partners to its network to serve its customers and bring in products closer to the end users.

“Over the last year, we transformed our network of partners in Gurgaon to start sourcing directly from brands and also set up infrastructure that would enable them to serve end customers faster and with fewer touch points,” Dhindsa wrote in the blog post.

Grofers wants to launch the expres model in other cities in the near future and for it has set up an express partner programme, which promises benefits such as higher earnings and data and analytics support, according to the programme’s website.

According to a report by RedSeer, quick commerce—deliveries in less than 45 minutes—is estimated to be a $0.3-billion market in 2021 and is expected to grow 10-15X in the next five years—that is, $5 billion by 2025.

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