Shri Vile Parle Kelavani Mandal’s

Narsee Monjee College of Commerce & Economics

(Autonomous)

Bachelor of Management Studies (BMS) Programme

2020-21

TY BMS Semester VI Division A

Course Name: Retail Management

Project Title: Grofers Retail Strategy

Submitted by:

Student’s Name SAP ID Roll No

Yasha Vora 45401180090 A055
AIM
The aim of this study is to critically analyse the retail strategy of Grofers

GROFERS COMPANY OVERVIEW –

Grofers is an m-commerce marketplace for your daily shopping. It allows you to shop from your favourite
store in your neighbourhood and get delivery within 90 minutes. You can shop for Grocery, Fruits &
Vegetables, Bakery items, Flowers, Meats, Pet Care, Baby Care and Cosmetics products with just a few
taps. You can get everything delivered instantly or schedule it for a convenient time later.

GROFERS REVENUE MODEL

Grofers has tied-up with merchants and stores in local areas. Grofers allows these stores or merchants to
have more customers through their app and they charge some commission(8%-15%). Grofers charges 8%
on order below 700 and 12%-15% commission on orders below 1,000.

MERCHANDISE ASSORTMENT OF GROFERS-

Grofers deliver wide range of products some of them are listed below:

 baby care products ,biscuits, snacks & beverages ,sauces & instant foods, breakfastand dairy
products ,home & kitchen appliances ,furnishing and home needs , frozen food ,pet care products
,vegetables & foods ,
 grofers exclusive– grocery & staples • beverages • household needs • breakfast & milk •
namkeen & snacks,personal care • home & kitchen needs

E-TAILING BUSINESS MODEL BEING FOLLOWED -

Grofers is not only being operated as an online delivery service platform, as it looks to expand it’s
business and push its private label of products. Online grocery platform Grofers has worked on
converting about 200 brick-and-mortar stores into its own branded outlets which concludes that it is
conducting its marketing activities both online and offline following a typical Brick and Click Model over
a period of time.

DISTRIBUTION STRATEGY –

Grofers has its operations in 18 cities across India. It currently has operations in New Delhi, Bengaluru,
Pune, Jaipur, Chennai, Hyderabad, Kolkata, Lucknow, Ahmedabad, Gurugram, Noida, Kochi,
Bhubaneshwar, Indore, Bhopal, Kanpur, Madurai, and Ranchi.

PRICING STRATEGY –

Grofers charges a commission from the merchant for listing their product on its online page. It also
charges merchants for putting up their advertisement on Grofer’s webpage. It follows a market leader
pricing in its marketing mix where It offers free delivery to the customer over a certain minimum amount
of orders, else it charges a fixed rate for delivery. Grofers offers periodic sales discount on certain range
of products to gain customer orders in those product segment.

CHALLENGES:

1. Building a new behaviour among users and suppliers - The biggest challenge for Grofers is to
shift the mindset of a normal Indian consumer — whose phsyce is too ingrained in making a trip to the
neighbourhood kirana store or supermarket on a weekly basis/monthly basis to purchase household
grocery items.A lot of factors still push a consumer to make the customary trip to the neighbourhood
Kirana store or Supermarket like touch,feel,taste,packaging etc. especially of new products. What
Grofers aims to to is SHIFT the way consumers purchase house hold grocery items by now closing the
purchase with a few clicks on a mobile app. The biggest challenge still is to bring the offline customer
online.? Another big challenge is to also shift the mindset of local kirana stores to partner with Grofers
as the main supply chain platform Once again making sure local kirana stores,medium
stores,supermarkets etc. are:
- able to share correct details of their inventory,
- availability of ordered stock at the correct time,
- share sufficient product listings etc.
- also for the local kirana stores who have since years been dealing with customers from their
neighbourhood personally, it is a big step to sacrifice that personal touch and moreover give up their
customers to a company (Grofers) ,who leverages technology to complete the process.

Solution :- Constant updation of their mobile application to create a user friendly and smooth
experience for their consumers to shop thru it. Delivering swiftly and as per the promised time span to
retain customers for repeat purchase and make them believe that Grofers is actually making their life
easier through technology and helping them save time , money and energy which will eventually
lead to increase in consumer attraction, Working more closely with kirana stores,medium stores and
supermarkets to offer them solutions for streamlining their inventory & supply chain
management probably with the help of technology in the future and training them or their staff to use
technology to serve the end consumers better. For eg: Vendor Portal login app or website thru which
new inventory can be updated , discounts offered etc.
2. High Cost of Operations & Delivery in a Low Margin Business : What Grofers essentially
does is -brings offline retailers online and users of the app can get anything delivered from their favourite
stores to their doorstep within 90 minutes. The way Grofers achieves this is by having procurement &
fulfillment stations all across the cities they are present in — As on April 2015 , Grofers has six in
Bengaluru, 16 and 12 in Delhi and Bombay, respectively. Whenever an order is placed, it goes to the
merchant as well as to these stations. Somebody from the nearby station picks up the order from merchant
and delivers. They have 300 people on ground for delivery across these cities. ( as on April 2015 ) As the
business grows & Grofers expands within existing citites and begins operations in new cities it is
understood that the the no. of stations which act as a main arm for the company to procure and fulfill
orders in a timely manner is going to go up . With the increase in stations there is also going to be an
increase in the manpower. All of the above leads to an increase in the Cost of Operations & Delivery .

Solution : -ability to make an extra margin to cover the costs of infrastructure and logistics. for eg:
negotiate for higher margins in select products where exponential growth can be seen in the next few years
like Organic Vegetables & Fruits-Integration of backend services is very important to cut down costs.,
offering & promote grocery shopping plans via subscriptions which can help to retain customer,retain
income from the same customer and also streamline operational cost for that one customer or many such
similar customers.

3. Growing Competition & Failing Competition – Hyperlocal eCommerce is one of the most
exciting places to be in the past years . There has been a lot of players that exist in the same business space
as Grofers —
- Big Basket
- Peppertap
- Aaram Shop
- Zopnow
All of the above players have succeeded in gaining market share as well as fundign from various sources in
the last few years. The challenge for Grofers is to sustain growth amidst the growing compeititon .

Solution: rapidly expand and the intent should be to capture space in the wallets of as many consumers
in the top geographies. ,modifications in operational processes. For eg: PepperTap’s catalogue has specific
products according to the region: the catalogue in South India will have ready-to-cook idly-dosa batter.Tie-
ups with local stores help this localization ,Enhance the consumer experience with timely delivery of a
quality product offered at a reasonable cost thru a simple user friendly mobile application & desktop portal.
 REFERENCES –

 https://jungleworks.com/startup-story-13-saurabh-kumar-and-albinder-dhindsa-on-how-
grofers-is-delivering-groceries-and-convenience/

 https://www.livemint.com/companies/start-ups/grofers-targets-to-convert-200-brick-and-
mortar-stores-into-its-branded-outlets-1561919307037.html

 https://www.slideshare.net/RakeshPanghal/grofers-by-rakesh-panghal-
57549040?next_slideshow=1

 https://www.berojgarengineers.com/grofers-case-study-funding-business-model-revenue-
model-investors-competitor/

 https://www.techinasia.com/grofers-taking-india-online-grocery-market

 https://www.mbaskool.com/marketing-mix/services/17270-grofers.html

 https://oyelabs.com/grofers-business-and-revenue-models/

 https://yourspost.com/grofers-business-model-and-strategies/

 https://grofers.com/blog/how-grofers-became-the-destination-for-great-quality-at-great-
prices/