Exclusive: Strengthening backend operations for great customer experience, Grofers wants to be one-stop app for all your daily needs

What started as a B2B company connecting mandis to stores is now also a B2C company connecting consumers with their local neighborhood merchants such as grocery shops, fruit and vegetable vendors, bakeries or pharmaceuticals via their apps on Android and IOS. Yes, it’s Grofers we are talking about. While organizing the supply chain for local stores, they identified that the store-customer link was highly unorganized. Either the shop owners didn't answer the phone or they ran out of stock. Seeing that there was no player in the market addressing this pain point of customers, Grofers jumped in!

From 200 delivery boys and team of 25 in December last year, the company has come a long way in less than a year’s time with a plush office in Gurgaon, 4,000 delivery boys, over 5,000 merchants and 1000 plus team members. Clearly, it has in the last one year not only set up the link, but has gone aggressive in expansion (in tier 2 cities), building their team and crafting a well-knit merchant network, after raising several rounds of funding from investors including Tiger Global Management and Sequoia Capital among others that totals up to $46.5 million. "We are in talks with Softbank for funding but nothing is finalized yet," Grofers founder Saurabh Kumar told Business Insider.

Even as the company plans to expand operations to a few more cities, their focus remains on introducing new categories for customers (like electronics, cosmetics, stationary etc), fine-tuning back-end operations for ensuring availability of stocks at all stores in their listings, educating merchants on importance of 'dark stores' and enhancing customer experience.

“We observed our supply side wasn’t scaling up the same way as we were,” Saurabh tells us. “Merchants give us inventory, we include it in our listings. Despite having 5,000 merchants, we do not have real time information about the products on their shelves. This leads to problems in fulfilling needs of customers in times of sudden rise in demand say over the weekends,” he says.

The company is in efforts to rectify this problem by sharing data of purchasing pattern and educating merchants on the types and quantity of products they should keep in their shops. In addition, they are also encouraging the store owners to open what are called ‘dark stores’ where the stock Grofers will buy from them to deliver to customers will be stored.

“It’s like a back door for us where no customer would walk in. It would be exclusively for us to keep a track of the products that have been supplied to a merchant and the real time status of their shelves so that it’s easier for us to manage and at no time, there is a crunch situation,” he says, adding that a lot of time, energy and technology is being put into use to realize this model. This will help each and every store listed with Grofers to be prepared with enough stock with them always to meet the demands of customers.

The firm is so focused on building foolproof processes to ensure great customer service, it has no time or interest in investing in marketing the brand. “Look, celebrity faces help spike demand for a few days, that’s it, Ultimately if our services are good, our merchants get demand all the time, our customers are supplied quality products they ordered in 90 minutes, we do not need any marketing. Our services have to speak for us and that’s what we are working on,” says Saurabh. Ever since the company started the B2C business, their merchants and delivery boys have championed their brand on the ground. “Word of mouth has been key for us. As the buzz grew and our delivery boys were seen moving around, people started talking about Grofers,” he says.

He doesn’t see e-commerce players like Flipkart and Amazon entering the fresh produce segment as a threat. In fact a lot of people starting transacting online with Grofers after becoming habitual to the concept of online buying procedures while using e-commerce websites. “We are happy because the more the buzz, the more people feel secure and comfortable in buying things online. They become habitual to it. Then give them a new option and you can see them wanting to explore options that they may have not in the past for example fresh fruits and vegetables,” says Saurabh.

Also increasing competition doesn't seem to be bothering Saurabh and his partner Albinder Dhindsa because Grofers already owns the supply chain for fresh produce, an aim they set out with from the beginning. “It’s difficult to control quality of perishable items because each store would have different standards. We do it for the stores listed with us. Everything right from procurement of fresh produce from mandis to processing, cleaning and packaging is done by us. No human hand touches it after it has left our centers. We bring it to merchants and from their deliver to customers as per orders. We own the entire supply chain in fresh produce and we aim to do that for other categories too in future,” he says.

This well established supply chain has also compelled FMCG companies to approach Grofers at times of launching new products or offers. “A lot of brands are coming onboard and doing product launches around Diwali with us like Cadbury is launching exclusive hampers on our platform. If they go by their distribution model, it would take them lot of time to reach the customers, so seeing our hyper local connectivity, they come to us,” he says, adding that Grofers is trying to find ways of giving these brands better visibility. Aware of the fact that their supply chain model attracts MNCs, they intend on being able to manage the supply chain of these MNCs in the times to come.

“For customers, Grofers wants to make life easy. You want anything from that local store round the corner, our merchants should have it in stock and you should be able to find it easily on our apps at any time. We want that you find it easier to turn to Grofers and order than going all the way to the store or using another platform. That’s requires good technology, established back-end processes, good quality supply of products, timely delivery and trust and we are working very hard on building all of that,” says the founder.