“Don’t forget to get me a 2-kilo pack of Baba Ramdev’s detergent powder,” said the voice on the other end of the phone to Bal Krishn Birla.
Birla, as he is known to most people in Bangalore’s closely-knit startup ecosystem, is a jovial 40-year-old who defies classification by virtue of being an IIT graduate, former CTO at online classifieds company Asklaila, one-time restaurant owner, brainchild behind a 20,000-member-strong global community of old Hindi music aficionados and the source of an unending supply of “PJs” of dubious antecedents.
The person Birla was talking to was a former colleague and friend who he was going to meet. The detergent wasn’t to be picked up at Patanjali Yogpeeth in Haridwar, where Ramdev’s business empire is headquartered, but from a 2,500-sq ft warehouse in Kudlu, Bangalore.
The warehouse belongs to Zopnow.com, a two-year-old Bangalore startup operating in that infernal hell of ecommerce: Groceries.
Birla is co-founder and CEO. “We stock over 100 SKUs [stock-keeping units] of Baba Ramdev’s products and he is one our fastest-selling brands,” he says. From soaps to spices to flour to cosmetics, these products are apparently giving competitors from the likes of Hindustan Unilever, Nestle or ITC a run for their money.
Ironically, and somewhat serendipitously, Zopnow ended up unearthing a huge market for products sold under a yoga guru’s name in what is arguably India’s most modern retail market.
“Because they are not available everywhere, Baba Ramdev’s [products] are what I would call ‘low-distribution’ products. So the store loyalty you can get by satisfying a fan of Baba Ramdev’s Amla Candy, you’ll never get by selling someone Maggi,” says Damodar Mall, the head of customer strategy for Reliance Retail’s value business.
No Country for Slow Men
The grocery space has long held a mythical status among ecommerce entrepreneurs because of its sheer size and repeatability. Every household needs groceries. And very few derive enjoyment from buying them.
It’s a category that is ideal to be “disrupted” by the internet.
Except that doing so is damn near impossible. Very few companies have managed to crack the economics of this low-margin space anywhere in the world. Everyone knows of Webvan, one of the ‘stars’ of the dotcom implosion, by virtue of going belly up after spending and raising over a billion dollars by 2001. Even Amazon, a company possessed of almost boundless ambition and capital, spent nearly five years delivering groceries in just a few Seattle neighbourhoods before expanding into a couple of more US cities earlier this year.
In India, the last three years have seen a mushrooming of grocery ecommerce sites in many metros (see chart). Everyone is blinded by the size of the overall market: $35-40 billion worth of FMCGs across the country, of which modern retail accounts for around 5 percent. “In cities like Mumbai, almost 40 percent of grocery orders already happen over phone, so the customer is ready for non-store offerings, including the internet,” says Mall.
Though none of the players gives out revenue numbers, research indicates that the largest player in the space is BigBasket with an estimated revenue of $4 million, followed by Zopnow, which is around $2 million in revenue, and MyGrahak.
By and large, the majority of players restrict themselves to pre-packaged food and consumer goods, staying clear of easily perishable produce like vegetables, fruits or meats. Those that do deliver fresh vegetables, like BigBasket or Town Essentials, have a much more complex supply chain.
Yet, selling groceries online is quite unlike most other forms of ecommerce. For one, you cannot create economies of scale across the country. Grocery retailing makes sense only at a “hyperlocal” level, because products need to be stored and shipped at as minimal a distance from the customer as possible. Even the assortment of products is specific to local tastes and preferences: What sells in Bangalore may not in Gurgaon or Pune.
“In grocery retail, there is little advantage gained from a national presence because the supply chain and assortment in each city needs to be localised. So each city ends up being largely like an independent business,” says Mall.
The three-hour Delivery
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(This story appears in the 23 August, 2013 issue of Forbes India. To visit our Archives, click here.)
The co. never oblige what has been committed: 1. Delivery will not be on time. 2. U will not be able to contact customer care. A long music and then phone cut off..... 3. The product supply is not of good quality. 4. The discount and cash back are being refused after applying and accepting coupons during shopping. Pros: 1. U will get e-mail reply where it will be mentioned SORRY, We will take ur feedback for further order.on Sep 16, 2015
Very bad. delivered my items after 2 days which had vegetables and fruits. All was rotten as 2 days they were packed in plastic bag and wandering bangalore. Will not place order again.on May 30, 2015
Poor service from zopnow bangalore. They sent items on time. The ordered item gets changed without our consent modifying the order at their will depending up on the items they have surplus in their warehouse. They allow us to order Nivea deo showing that as in stock while ordering and they send oldspice deo changing my order themselves. In one order they changed 3 items. Really disappointed.on Feb 1, 2015
Bangaloreans you can Also try the new Start up and has made a big name in terms of quality and delivery of the products. http://qusec.in for all your groceries, vegetables, fruits and meat. Importantly Delivers The Entire Bangalore CITY.on Aug 26, 2014
Zopnow delivery used to be good but now it is becoming average. Orders are delayed, selection of products is now limited to standard HLL, ITC and Nestle kind of brands to enjoy good margins. They cant deliver good quality fresh vegetables, fruits, bread, dairy and eggs. Everytime one of the things delivered is spoiled.on Aug 3, 2014
Zopnow delivery used to be good but now it is becoming average. Orders are delayed, selection of products is now limited to standard HLL, ITC and Nestle kind of brands to have good margins. They cant deliver good quality fresh vegetables, fruits, bread, dairy and eggs. Everytime one of the things delivered is spoiled.on Aug 3, 2014
I am a regular user of BigBasket. Then I considered ZopNow as they delivered quick and decently in a reusable bag. Secondly, ZP has more flexible on quantities (smaller packs unlike BigBasket). Customer service are good on both. Sometimes, I get a bad product from ZopNow. I ordered curry leaves, and it was completely dry leaves, and wasted money. BB gives fresh leaves though.on Mar 18, 2014
Thanks for providing this information. Onway is one of the first online retailers to expand its footprint into the grocery sector one of the largest retail sectors that has remained relatively unchanged by the aggressively growing online market. Online Grocery Store Chandigarh, onwaystore.comon Aug 29, 2013
good article but the journalist seems to have missed it in not contacting others in the space and sensing that a major upheaval and break-up of the two founders was in play. If he had talked to investors or even people in the space , they would have alerted the author and he could have avoided the embarrassment of putting the two founders photos - and discover within two weeks they split- see http://bkbirla.in/2013/08/21/goodbye-from-a-zhopper/on Aug 24, 2013
Smart move... Only the time will tell how Zopnow performs.on Aug 22, 2013
Really great value products from Patanjili as far as quality and rates are concerned.on Aug 22, 2013
your kidding me right, overpriced and some of them are mere eyewash.on Aug 26, 2013
Wonder what challenges they faced with a warehouse structured like a super market!on Aug 21, 2013
It\'s me who wanted this detergent.Feels good. To read this.Keep growing Zopnowon Aug 21, 2013
I am a ZopNow (moved from BigBasket who were disappointing) and Town Essential customer. ZopNow\'s interface and delivery efficiency is far superior to any others I have used. They have their finger on the pulse and react to customer feedback promptly. Great differentiation in a difficult space. Kudos to them.on Aug 21, 2013
But i don\'t think they are giving any sort of discounts ! they just sell at the MRP\'s which we get much less than that outside !!on Nov 5, 2013
As a big basket user, I can vouch for the fact that it makes tremendous economic sense to shop online. The market is there, as long as people have something more worthwhile to do than shop in over crowded malls and stand for hours at check out counters. I was unable to establish the 10,000 SKU at Big Basket. The choices are extremely small in comparison. The whole experience is quite nice.on Aug 21, 2013
I have read that, these guys from Kerala www.kada.in are also doing great.on Aug 20, 2013
I have heard www.drivemart.in in chandigarh is also doing quite good in this regard.on Aug 23, 2013
I think the market place model will work best in the grocery space. Getting mom and pop stores online (for supply).. Allow customers to select either the vendor or only the goods. Then allow the vendor closest to the customer to have the goods delivered. It will save the vendor - the cost of manning a telephone, billing time etc.on Aug 20, 2013