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<keyword id="2085190" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-stores">Online grocery stores</keyword> are gaining popularity in India due to sheer convenience, ease of shopping and a fast-growing market. Globally, <keyword id="2085193" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-retail">online grocery retail</keyword> is growing nearly 7 times faster than on-ground formats and the <keyword id="47445" type="UNKNOWN" weightage="100" keywordseo="Indian-market">Indian market</keyword> may soon catch up. For one, the <keyword id="156795" type="UNKNOWN" weightage="100" keywordseo="indian-retail-industry">Indian retail industry</keyword> is estimated to be worth over $500 billion (one of the world’s top 5 markets) and 30-40% of the businesses will be in the online retail space over the next 7 years., This presents a great opportunity for any form of e-tailing, especially the <keyword id="2085203" type="UNKNOWN" weightage="100" keywordseo="E-grocery-space">e-grocery space</keyword>. 
 As of now, <keyword id="2085207" type="UNKNOWN" weightage="100" keywordseo="Grocery-e-tailing-in-India">grocery e-tailing in India</keyword> is a largely unorganised space and poses a big challenge in terms of stiff <keyword id="2085206" type="UNKNOWN" weightage="100" keywordseo="Entry-barriers">entry barriers</keyword>. The traditional methods of inventory and <keyword id="2085212" type="UNKNOWN" weightage="100" keywordseo="Logistics-management">logistics management</keyword> call for intense cash-burning – a business condition most of the bootstrapped Indian start-ups fail to meet. Moreover, a <keyword id="2085209" type="UNKNOWN" weightage="100" keywordseo="Series-A-funding-crunch">Series A funding crunch</keyword> also compelled companies like Mumbai-based <keyword id="2048780" type="UNKNOWN" weightage="100" keywordseo="ShopVeg">ShopVeg</keyword> to shut down operations. Therefore, when another Mumbai-based start-up decided to start grocery e-tailing in the same year, things were not looking too exciting for the newcomer. But 22 months later, <keyword id="2009014" type="UNKNOWN" weightage="100" keywordseo="LocalBanya-com">LocalBanya.com</keyword> has managed to set up Mumbai’s first online supermarket and also raised <keyword id="6793689" type="UNKNOWN" weightage="100" keywordseo="Series-A-funding">Series A funding</keyword> for the next level of expansion. 
 Although there were predecessors that attempted various models of grocery retail in the digital space and failed, <keyword id="2047523" type="UNKNOWN" weightage="100" keywordseo="LocalBanya">LocalBanya</keyword> has adapted a <keyword id="2085214" type="UNKNOWN" weightage="100" keywordseo="Lean-business-model">lean business model</keyword> that relies on a convenient mix of <keyword id="96173" type="PERSON" weightage="100" keywordseo="warehousing">warehousing</keyword> and <keyword id="512818" type="UNKNOWN" weightage="100" keywordseo="cash-and-carry">cash-and-carry</keyword>. This has reduced the start-up’s dependence on capital-intensive operations and enabled it to put in place a thoroughly efficient <keyword id="118965" type="PERSON" weightage="100" keywordseo="Supply-chain">supply chain</keyword>. In addition, the company has adopted some unique measures to take <keyword id="2085217" type="UNKNOWN" weightage="100" keywordseo="Customer-convenience">customer convenience</keyword> to the next level. Want to know more about LocalBanya and how it works? Here is a snapshot that captures the start-up’s vision and viability. 
 
Who runs LocalBanya (www.localbanya.com): A team of three co-founders – <keyword id="2085179" type="UNKNOWN" weightage="100" keywordseo="Karan-Mehrotra">Karan Mehrotra</keyword> (<keyword id="5645" type="POSITION" weightage="100" keywordseo="CEO">CEO</keyword>), <keyword id="2085180" type="UNKNOWN" weightage="100" keywordseo="Rashi-Choudhary">Rashi Choudhary</keyword> (COO) and <keyword id="1251820" type="PERSON" weightage="100" keywordseo="Amit-Naik">Amit Naik</keyword> (<keyword id="238078" type="POSITION" weightage="100" keywordseo="CTO">CTO</keyword>). Karan is the brain behind LocalBanya and set up the entire infrastructure with just 14 employees. He is a <keyword id="163598" type="POSITION" weightage="60" keywordseo="computer-engineer">computer engineer</keyword> and prior to starting up, worked for his family business as a distributor for <keyword id="123278" type="UNKNOWN" weightage="100" keywordseo="FMCG-firms">FMCG firms</keyword>. He has 11 years of work experience in varied fields – from turning around a chain of restaurants to setting up metal fabrication plants to building a food distribution network. 
 Amit holds an MBA from IIM-Lucknow and he is also a Six Sigma Black Belt from the American Society for Quality. He had six years of top tier experience in ad-tech and earlier worked for <keyword id="1076906" type="ORGANIZATION" weightage="80" keywordseo="Directi">Directi</keyword> and <keyword id="45475" type="CITY" weightage="80" keywordseo="Larsen-Toubro">Larsen &amp; Toubro</keyword>. Rashi holds a Global MBA from <keyword id="1433263" type="UNKNOWN" weightage="60" keywordseo="SP-Jain-School-of-Global-Management">SP Jain School of Global Management</keyword> and brings four years of experience in <keyword id="6553136" type="UNKNOWN" weightage="100" keywordseo="retailing">retailing</keyword>, consulting and <keyword id="169305" type="ORGANIZATION" weightage="100" keywordseo="customer-service">customer service</keyword>. Prior to joining LocalBanya, she worked with the <keyword id="244481" type="COMPANY" weightage="60" keywordseo="Raymond-Group">Raymond Group</keyword>. 
 The trio had been working on the concept for some time and the site went live in May 2012. LocalBanya is now in beta and the e-grocer has over 130 employees operating across Mumbai, Thane and <keyword id="57321" type="PERSON" weightage="100" keywordseo="Navi-Mumbai">Navi Mumbai</keyword>. 
 
What inspired the venture: The desire to go one step ahead of your <keyword id="2085220" type="UNKNOWN" weightage="100" keywordseo="Local-grocer">local grocer</keyword> who accepts orders on phone. “Apparently, it was convenient but there was something lacking. You can’t browse the inventory when ordering on phone; the choices are not many (after all, a kirana or <keyword id="2085221" type="UNKNOWN" weightage="100" keywordseo="Mom-and-pop-store">mom-and-pop store</keyword> won’t keep exotic or imported items as those are a bit expensive) and finally, there’s no organised system (accountable, responsible and prompt),” says Karan. So up came LocalBanya, an online supermarket selling around 12,000 products across 17 categories and adding more every day. 
 
What’s the pitch: LocalBanya.com is an <keyword id="2085223" type="UNKNOWN" weightage="100" keywordseo="Online-convenience-store">online convenience store</keyword> dedicated to YOU (customers). The e-grocer offers high quality products and hassle-free delivery that save time, energy and money. “If you are <keyword id="62452" type="UNKNOWN" weightage="100" keywordseo="grocery-shopping">grocery shopping</keyword> 4-5 times a month or looking for something special, imagine the kind of supermarket trips you have to make and how you have to run from shop to shop,” points out Karan. “But having the entire bulk procured for you and delivered to your place, at the time you want it, would make things extremely convenient and lure the customers,” he adds. Karan, however, feels that the industry is huge enough to allow kirana stores, large-format retailers and e-retailers to survive and grow in the same marketplace. 
 
How it works: As of now, LocalBanya is targeting the <keyword id="6756404" type="UNKNOWN" weightage="100" keywordseo="urban-population">urban population</keyword> and the customer base varies from <keyword id="2085227" type="UNKNOWN" weightage="100" keywordseo="Single-professionals">single professionals</keyword>, <keyword id="632195" type="UNKNOWN" weightage="100" keywordseo="working-couples">working couples</keyword>, <keyword id="168112" type="UNKNOWN" weightage="100" keywordseo="Nuclear-families">nuclear families</keyword> and <keyword id="3216" type="ORGANIZATION" weightage="100" keywordseo="students">students</keyword> fending for themselves to <keyword id="1400200" type="UNKNOWN" weightage="100" keywordseo="new-mothers">new mothers</keyword>, <keyword id="20566" type="UNKNOWN" weightage="100" keywordseo="senior-citizens">senior citizens</keyword> and even <keyword id="2085229" type="UNKNOWN" weightage="100" keywordseo="Large-families">large families</keyword>. 
 “People come to us for a wide selection of goods (otherwise, they will have to visit 2-3 stores to make a purchase), convenience and great pricing. We deliver that convenience with exceptional levels of customer service, <keyword id="2085230" type="UNKNOWN" weightage="100" keywordseo="Preferred-delivery-times">preferred delivery times</keyword>, same-day deliveries, fresh produce and efficient &amp; reliable suppliers. We also take product suggestions from our customers and ensure that the products are online in a fortnight,” details the LocalBanya team. The <keyword id="2085232" type="UNKNOWN" weightage="100" keywordseo="Procurement-model">procurement model</keyword> includes a convenient mix of warehousing and just-in-time (<keyword id="377986" type="ORGANIZATION" weightage="100" keywordseo="JIT">JIT</keyword>) deliveries from a host of suppliers including <keyword id="34523" type="CITY" weightage="80" keywordseo="fmcg">FMCG</keyword> companies, cash-and-carry outlets and other distributors. 
 Shopping for groceries on the LocalBanya platform is also kept simple. You just have to register or connect through Facebook before browsing the categories and the products. Once you make the purchase, the order is processed and ready for delivery within 6 hours. Delivery is done as per your time slot selection. The company offers 6 slots (of 2 hours each), from 7 in the morning until midnight, and one can choose any of those. Customers also enjoy <keyword id="2085234" type="UNKNOWN" weightage="100" keywordseo="Banya-Points-rewards-programme">Banya Points rewards programme</keyword> and these points are redeemed for cash discounts on every purchase. 
 
Claim to fame: <keyword id="900658" type="UNKNOWN" weightage="100" keywordseo="traction">Traction</keyword> and <keyword id="232730" type="POSITION" weightage="100" keywordseo="business-model">business model</keyword>. The start-up claims that it currently reaches over 10,000 homes a month and delivers 500-plus orders a day. Interestingly, nearly one-third of its orders are from <keyword id="1189616" type="UNKNOWN" weightage="100" keywordseo="institutional-clients">institutional clients</keyword> while senior citizens and <keyword id="58225" type="ORGANIZATION" weightage="100" keywordseo="NRIs">NRIs</keyword> constitute over 16% of the customer base. But what matters most is the <keyword id="2085235" type="UNKNOWN" weightage="100" keywordseo="Lean-infrastructure">lean infrastructure</keyword> set-up for reducing asset liabilities. 
 
Show me the money: Since its <keyword id="85080" type="ENTERTAINMENT" weightage="100" keywordseo="Inception">inception</keyword> in May 2012, LocalBanya has done around Rs 15 crore in gross revenues. The start-up is projected to grow 40% month on month over the next 15-18 months and eyes <keyword id="486782" type="UNKNOWN" weightage="100" keywordseo="break-even">break-even</keyword> in the existing markets (Mumbai, Thane and Navi Mumbai) by June this year. 
 LocalBanya was initially bootstrapped, but has already raised two rounds of <keyword id="6357455" type="EVENT" weightage="100" keywordseo="Funding">funding</keyword>. It is now in talks with investors to raise a Series B round by March 2014. In January this year, the start-up secured an undisclosed amount in Series A funding from <keyword id="2009015" type="UNKNOWN" weightage="80" keywordseo="Karmvir-Avant-Group">Karmvir Avant Group</keyword>, a real estate developer in Mumbai. Earlier, it had raised funding from <keyword id="2085241" type="UNKNOWN" weightage="100" keywordseo="Times-Groups-Brand-Capital-Springboard">Times Group’s Brand Capital Springboard</keyword> platform. “The Series A round will last us for a year and help fuel our growth at a faster rate as we scale up operations, hiring and marketing. We are also looking to start operations in a new city within a quarter,” says Karan. 
 
Biggest challenge: Competition abounds in online grocery retail space but containing cash-burning is most crucial when it comes to inventory, supply chain and logistics. Streamlining the supply chain and <keyword id="2085210" type="UNKNOWN" weightage="100" keywordseo="Inventory-management">inventory management</keyword> is an uphill task but a lean procurement set-up, use of <keyword id="2085238" type="UNKNOWN" weightage="100" keywordseo="Leased-delivery-vehicles">leased delivery vehicles</keyword>, <keyword id="2085242" type="UNKNOWN" weightage="100" keywordseo="In-house-delivery-personnel">in-house delivery personnel</keyword> (for ease of management) and a well-structured <keyword id="2085243" type="UNKNOWN" weightage="100" keywordseo="Region-mapping">region mapping</keyword> that enables effective coverage of the city have helped the start-up cut down on costs. 
 
Five takeaways: In nearly 2 years of operation, LocalBanya has seen some interesting trends in <keyword id="2085200" type="UNKNOWN" weightage="100" keywordseo="Online-grocery-shopping">online grocery shopping</keyword> behaviour and Karan &amp; his team want to share it with the budding wannapreneurs and all our readers. So here we go: 
 
59% of the transactions on the site are done by women. 
 
Senior citizens are a sizeable 14% of the customer base due to the convenience of online retail. 
 
A sizeable 2.1% of transactions are done by NRIs to have groceries delivered to their relatives in Mumbai. 
 
Institutional clients including restaurants, corporate houses, co-operative societies and any other organisation requiring groceries in bulk have seen the advantage of e-grocery and 29% of the business comes from these channels. 
 
Around 11% of LocalBanya’s deliveries are done during the 10 pm-12 midnight slot. And the last trend brings us back to the convenience factor. How many e-grocers or physical retail stores in India would be doing that in a bid to break out of the pack?

This E-grocery Start-up Uses A Lean Model For Its Online Supermarket; In Talks To Raise Series B
Funding

After missing out the all-time favorite noodles <a href="http://www.businessinsider.in/searchresult.cms?query=Maggi+">Maggi </a>in our menu, it’s the king of the kitchen, <a href="http://www.businessinsider.in/searchresult.cms?query=onion">onion</a>, 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, <a href="http://www.businessinsider.in/searchresult.cms?query=online+grocery">online grocery stores</a> like <a href="http://www.businessinsider.in/searchresult.cms?query=Localbanya">Localbanya</a>, MeraGrocer, <keyword id="3020147" type="UNKNOWN" weightage="20" keywordseo="Freshfalsabzi">Freshfalsabzi</keyword>.com and <keyword id="2817480" type="UNKNOWN" weightage="20" keywordseo="GrocerMax">GrocerMax</keyword> 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. 
 <keyword id="2047523" type="UNKNOWN" weightage="20" keywordseo="LocalBanya">Localbanya</keyword> 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 (<keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword>) 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 <keyword id="1640900" type="UNKNOWN" weightage="20" keywordseo="Online-grocery">online grocery</keyword> said prices of lemon, beetroot and lettuce have been raised to keep onion rates down. 
 
<a href="http://www.chilloutpoint.com/images/2010/05/naughty-mischievous-baby-boys/naughty-mischievous-baby-boys-11.jpg">Image source</a>

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

After gadgets, fashion and home appliances, it’s time to buy groceries online as <keyword id="18635" type="CITY" weightage="60" keywordseo="Amazon">Amazon</keyword> is planning to redefine on-demand delivery. While requirement of all other products can be managed if delivery is delayed, grocery, being an essential daily-need product category, its delivery always needs to be on-time. And to ensure this, Amazon’s new ‘Kirana Now’ programme will deliver orders from small neighbourhood stores to your door step in two to four hours. 
 Instead of building warehouses, delivery-based models are asset-light by default, making it easier to scale up in an industry that traditionally has high financial entry barriers, according to the Economic Times. Amazon may start deliveries from kirana stores in select areas of <keyword id="6354321" type="CITY" weightage="60" keywordseo="Bengaluru">Bengaluru</keyword> for customers who submit orders on their mobile phones. 
 Just like Amazon, yet another <keyword id="1640900" type="UNKNOWN" weightage="60" keywordseo="Online-grocery">online grocery</keyword> store in Bengaluru, <keyword id="2690396" type="UNKNOWN" weightage="60" keywordseo="ZopNow">ZopNow</keyword> has also shifted its focus from owning warehouses to delivering for HyperCity stores. ZopNow has spent over a million dollars to set up each warehouse, while $15,000 to $20,000 are required to start delivery operations in a city. Market watchers are of the opinion that the time is ripe enough to invest in delivery based services. "From a company perspective, this is much more capital efficient," Mukesh Singh, co-founder of ZopNow has told the ET. 
 <keyword id="2047523" type="UNKNOWN" weightage="60" keywordseo="LocalBanya">LocalBanya</keyword>, an <keyword id="2789983" type="UNKNOWN" weightage="60" keywordseo="online-store-operative">online store operative</keyword> in Pune, Mumbai and Hyderabad, too does over 1,000 orders a day and plans to launch delivery services in 12 cities this year. "Over the last 15 years, modern trade and other unorganised players have pumped in 90% of their investment into first-mile supply chain and inventory-based warehouses, whereas nobody had really been able to crack the last-mile distribution and delivery to the customer. Instead of competing, we'd rather partner with them and focus on innovating in the areas that need attention in the industry," said Karan Mehrotra, co-founder and CEO of LocalBanya told ET. 
 While the inventory based models take years to get established, this market place model however just takes around 3 months. On demand delivery startup, <keyword id="2789985" type="UNKNOWN" weightage="60" keywordseo="Gofers">Gofers</keyword>, which had raised Rs 63 crores from Tiger Global last month, had already grown well in Delhi NCR, Mumbai and Bengaluru. 
 
(Image : Reuters)

Amazon knows that when delivering groceries, time is of essence in the Indian market

The recent Reliance AGM saw Mr. Ambani announce that the new Fresh Direct website would be ‘scaled up’, and that the company’s retail sector has seen a whopping 30-50% growth. 
 Reliance Fresh and <keyword id="2900459" type="UNKNOWN" weightage="80" keywordseo="reliance-fresh-direct-website">Reliance Fresh Direct website</keyword> has been plagued with problems like sourcing and storage issues. With it comes the added burden of logistics and freshness issues. That however hasn’t stopped many a brave e-commerce retailer to enter grocery retail. 
 
“Food and grocery is the single biggest opportunity in Indian e-commerce today. It’s just a question of tactical execution”, Arvind Singhal, Chairman at Technopak says. 
 
Should other players like BigBasket and LocalBanya be worried about Reliance’s grand plans? 
 
“There is a $370 billion market out there and a lot of headroom for everybody to grow at this moment”, Singhal says. 
 
With the focus increasingly shifting from brick and mortar to grocery retail, many believe it’s high time for the Birla and Future Group to join the party as well. After all, why should they not get a slice of the pie? 
 
(Image credit: Indiatimes)

You Searched For "LocalBanya" and got 4 results

This E-grocery Start-up Uses A Lean Model For Its Online Supermarket; In Talks To Raise Series B Funding

Sanghamitra Mandal

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

BI India Bureau

Amazon knows that when delivering groceries, time is of essence in the Indian market

BI India Bureau

Does Reliance Fresh Direct spell disaster for other grocery e-tail?

BI India Bureau

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