Now, you can buy Onions at Rs 40 per kg at the most unlikely market place

After missing out the all-time favorite noodles Maggi in our menu, it’s the king of the kitchen, onion, which makes us cry now. With soaring prices of onion, sellers are now finding newer ways to woo the customers. And the best they can think of is to sell this key ingredient to prepare Indian meals at a lesser price.

As per an Economic Times report, online grocery stores like Localbanya, MeraGrocer, Freshfalsabzi.com and GrocerMax are offering onions at Rs 40-69 per kilogram against Rs 80 or more per kg in the retail market.

If experts are to be believed, these online platforms are able to sell onions at such a low price because they’ve cut-out the middlemen.

Localbanya CEO Karan Mehrotra cleared the air by saying that they could make it because of a mix marketing strategy and procurement. He said, "We do take a hit on margins at times for the benefit of customers.”

The eCommerce platform, which is partly inventory-led, also uses just-in-time procurement, thus gets very good deals at times and it passes on the benefits to the customers. Localbanya started a grocery subscription plan this week.

Another Delhi-based online fruits and vegetable retailer FreshFalSabzi too is selling onions at Rs 40 per kg. "We are selling onions at a loss but have reduced marketing spends, including spends on local ads and sponsorships," said Rajesh Gupta, chairman of the RSND Group-promoted FreshFalSabzi, which has hired TV actress Sakshi Tanwar to promote the site. The e-tailer gets vegetables directly from farms and is selling them on a no-profit-no-loss model at least for now, said Gupta.

The price rise is not just limited to onions. After unseasonal rains hit the country this year, prices of other essential fruits and vegetables like potato, brinjal, radish and carrot are also going up in the markets. On the other hand, the online prices are said to be at least 10% cheaper.

In a similar move, Gurgaon-based online store MeraGrocer ran a 30% discount promotion from Wednesday to Sunday and it offered onions for Rs 42 per kg. The company has extended the campaign to this week as well, but this time only for vegetables.

"The whole campaign was around the concept of cheaper than wholesale price. Cheaper than Azadpur mandi," said Saurabh Chadha, co-founder of MeraGrocer. The company has also decided to offer daily discount deals, he added.

The online grocers, as per the industry insiders, aren’t making money and are running short of money as most of them have already spent a lot on marketing and promotions. A recent report by researcher Kantar Worldpanel, eCommerce for fast-moving consumer goods (FMCG) will increase 47% to $53 billion by 2016, up from $36 billion in 2014.

As per K Radhakrishnan, co-founder Grocermax.com, "We have driven the selling price down to Rs 69.50 per kg for 45-55 mm diameter onions, whereas similar quality is selling at Rs 80 to 85 (in the open market). Customers are sometimes unaware that traders mix small-sized onions which they end up buying."

Fresh FalSabzi.com's Gupta said, the minimum order value is Rs 249 and it doesn't sell more than 2 kg of onions to a customer on a given day to prevent hoarding. "For other vegetables, we ensure at least 10% discount compared to the retail price elsewhere," he said. Some sites engage in cross-subsidies. The founder of one online grocery said prices of lemon, beetroot and lettuce have been raised to keep onion rates down.

Image source