How do they earn

The normal retailers were facing heat from the Inventory Based Model startups like Big Basket’s home
delivery service. Hence many retailers also started giving home-delivery service, but without the scale
delivery service of each shop it was very expensive and unsustainable.

Here comes Grofers which decided that they will provide common delivery service and market place on
a mobile application. Users can find a product and order from their favorite shop with convenience of
delivery.

For Local vendors, it is a win win situation as they get their items sold and do not need to carry the cost
of Delivery infrastructure.

Grofers makes revenue via commission from retailers. Grocery gives 7-8% margin while bakery offers
over 20% margin as MRP issue doesn’t exist in that category. The company incurs loss in fruit and
vegetable category given the basket size is small when compared to above two category.

Grofers for now, is not aiming to generate profits but to maintain a good customary relationship.
They're trying hard to make their customers get used to this app through lot of promotions and the '90
minutes guaranteed delivery' of products. There are no delivery charges if you order more than rupees
two fifty. If it is below that they charge rupees forty nine.