The Start up scenario in India is maturing everyday and innovative, new concepts are redefining the ecommerce business on a daily basis. While, ecommerce initially was all about shopping online, without wasting time going to a brick-mortar store, things have evolved pretty quickly since then. Well, for one, consumers aren’t willing to wait over 2-3 days to have their products delivered.
And this has prompted a new kind of startup, which can deliver within a couple of hours of the order being placed. And with the rise of such companies like Grofers and Zopper, the veterans including Flipkart and Snapdeal are feeling uncomfortable , if not threatened.
Grofers, focussed on groceries, is targeting an ambitious climb to 10 lakh orders in August, encouraged by weekend orders that crossed 15,000 a day in July, as per a news report by The Economic Times. "We will go up to 30,000 orders a day by August, definitely crossing 25,000. The challenge for us right now is to resolve operational issues like how to deliver in the rains," Albinder Dhindsa, cofounder and CEO of Grofers, which partners with neighborhood stores for delivery of goods has told ET.
Other on-demand startups, too, are chasing ambitious goals in a country where people increasingly have less time for domestic chores and prefer being served. This, say investors, makes the nascent on-demand economy an ideal fix for the Indian psyche and the segment most likely to throw up the next few billion-dollar valuation startups.
"The on-demand category hit an inflection point in India a few months ago and it will always trump scheduled orders because it is more convenient," Niren Shah, managing partner at Norwest Venture Partners, which has invested in food delivery startup Swiggy told the financial daily.
Increasing use of affordable smartphones - and their ability to show precise locations - has made the ondemand business model more feasible and executable in the past year, say investors.
"To build a large and highly valuable hyper-local business you need super-efficient logistics play that is better than what momand-pop stores have," Alok Goel, managing director at SAIFPartners, which has backed on-demand delivery companies like PepperTap, Swiggy and Spoonjoy told the financial daily. The rapid rise in demand has taken even some founders by surprise.
Online-first restaurant Faasos, which makes and delivers food, handles around 4,500 orders a day through its mobile application and a total of 1.5 lakh a month. The company aims to increase this to 3 lakh monthly orders by September and 10 lakh by March, according to Revant Bhate, entrepreneur-in-residence at Faasos.
Flipkart said it handles about 80 lakh shipments a month, an average of more than 2.6 lakh deliveries a day. The number of venture capital investments in on-demand startups has increased from 22 in all of 2014 to 55 till date this year. The capital deployed has more than doubled to $556 million, according to startup research firm Tracxn.
The proliferation of the on-demand economy is likely to incentivise consumers still reluctant to transact on the internet, and open another channel that marketplaces such as Flipkart and Snapdeal will have to address, experts told the ET.
"This will make etailers stand on their feet and execute at a faster pace, where they will also look to mimic the real offline shop experience where goods are delivered in 4 hours," said Goel, former CEO at mobile recharge and couponing firm Freecharge.
Hyper-local startups such as Zopper are already creating marketplaces in segments like mobile and electronics by tying up with local stores.