Sie sind auf Seite 1von 16

_______________________________________________________

Institute of Management Technology

The Next Revolution: E-Grocery in India Hyper Local Mobile


Commerce

The case was written by Professor V. K. Gupta. It is intended to be used as the basis for class discussion
rather than to illustrate either effective or ineffective handling of a management situation.

2015, IMT, Ghaziabad, India

Institute of Management Technology


Raj Nagar, Ghaziabad,
U.P, India 201001

The Next Revolution: E-Grocery in India Hyper Local Mobile


Commerce

Dr. V.K. Gupta


Professor, IMT Ghaziaiabd
Former CEO India, JMAM, JMA Group, Tokyo, Japan
dr.vkgupta@gmail.com

Singh, the co-founder of PepperTap, a hyperlocal service based out of Gurgaon and launched in
November in 2014, raised a funding of US$10 million on April 15, 2015 from Sequoia Capital and
SAIF Partners to expand by year-end to 10 cities1.
This PepperTap investment was announced almost immediately after a similar US$10 million
funding round received by a competitor hyperlocal grocery delivery service of Bangalore ZopNow.
Dragoneer Investment Group (US-based) was the front-runner in the funding round with
participation from Times Internet, Qualcomm Ventures and Accel Partners.
Singh is trying to figure out how to respond to the challenges posed by other similar and large players
in the market of India.
E-RETAIL IN INDIA

A KPMG study indicates that emerging markets would lead the worlds growth (about 70 percent)
with China and India contributing to about 40 percent. Investors confidence is likely to be attracted to
emerging markets in the near future2. The retail sector of India has close to 15 million outlets making
it highly fragmented. Infact, it is expected to grow in 2018-19 from US$ 530 billion to US $ 950 billion
with a 15 percent CAGR3. The retail sector of India is continuously increasing even after existence of
irregular international economic trends. A global consultancy firm, A.T. Kearney has given India the
ranking four among the most attractive country for retail investment among the worlds 30 emerging
markets. According to a study by Booz & Company (India) Pvt. Ltd., the Indian segment of organized
retail is responsible in 2010 for only 5-6% of the complete retail market. The report of the Business
Monitor International India Retail has given an estimate that sales for total retail in India are to increase
from the sum of US$ 411 billion in 2011 to US$ 804 billion by the year 20154. The unorganized sector
dominates the Indian retail sector ( accounting for more than 95%). It is expected that the organized
retail by 2015 will rise from 5-6% to 14-18 % of the complete retail market, according to a report by
McKinsey & Company. (refer to Exhibit I Indian Retail Sector Size and growth).

https://www.techinasia.com/hyperlocal-grocery-delivery-race-india-peppertap-raises-10m-days-zopnows-10m/ Accessed on
April 23, 2015
2 https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/BBG-Retail.pdf Accessed on April 23, 2015
3

http://www.crisil.com/pdf/research/of-growth-&-missed-opportunity.pdf Accessed on April 23, 2015

http://www.investindia.gov.in/retailing-sector/ Accessed on April 23, 2015

Mergers and Acquisitions

The Indian ecommerce market growth is aided by persistent inflow of Venture capital and ongoing
M&A deals to obtain the capabilities required to compete and sustain the growth momentum. Grofers
earlier this month bought competitor Mygreenbox (based out of Gurgaon). Godrejs, offline gourmet
retailer, Nature Basket recently bought Ekstop.com as its online strategy. (refer to Exhibit II : M & A
in Indian ecommerce market).
GROCERY MARKET IN INDIA

In India, more than 14 million outlets operate having store space of less than 500 square feet. Such
stores are owned and operated by family lacking scale to grow. Therefore, they offer a huge investment
potential.
It is way more problematic to sell perishable goods online compared to selling non-perishable products;
fresh tomatoes storing and supplying is a completely different ball game from cell phones storing and
distribution.
The sixth largest global grocery market is India and is also one of the fastest growing online groceries
markets. It is estimated that of the total $500 billion-plus retail market in India, the biggest chunk is
attributed to food and groceries having around 70% market share. Out of this, around $12 billion is
contributed by organized food and groceries and is increasing at a 30% compound annual growth rate.
According to IGD (Research firm) the Indian grocery market would overtake Japan to become the third
largest market by 2016. Meanwhile, The online grocery market of India, (estimated to be less than
$100 million currrently), is expected to be worth billions in the near future. We anticipate it to cross
$20 billion by 2020, says Menon5.
Ecommerces next generation is going to be the hyperlocal mobile commerce category for more
repeated use cases such as food and groceries according to the managing director of Sequoia Capital
India, which backs companies like Grofers and PepperTap as well as their counterpart Instacart in
America6. Grocery has high frequency purchase which makes it the largest and the segment with the
highest turnover of the e-commerce market. Perishable goods online sell far more difficult than nonperishables; it is entirely different to store and supply fresh tomatoes compared to storing and supplying
of cellphones. The main competition of the online grocery stores are the local grocers who have been
able to build their loyal customer base on reliability, trust and fast, customised service. This business
of selling groceries is low-margin (margins well below 10 %) even though expensive investments is
required for building high-end IT infrastructure, a supply chain which is efficient, quality warehousing
& facilities for storage, and an proficient system for delivery7.
Out of the products that are being sold on the platform of e-commerce major items include, fruits,
vegetables, bakery, meat, staples and dairy products. Further on, there is a varied selection of
beverages, packaged food, baby care products, confectionery, pet care products , personal care products
and home need products. For returns, most of the companies have a policy of no-questions-returns. So
customers are able to return any item/product which is not to their satisfaction to the associate for
delivery at the delivery time.

http://knowledge.wharton.upenn.edu/article/online-groceries-in-india-will-consumers-bite/ Accessed on June 1, 2015


http://economictimes.indiatimes.com/small-biz/startups/on-demand-delivery-how-startups-are-making-money-as-theychallenge-established-firms/articleshow/47033507.cms Accessed on April 25, 2015
6

http://forbesindia.com/article/real-issue/online-grocery-stores-mushroom-across-india/38677/1 Accessed on April 8. 2015

In India, online grocery stores are becoming popular because of ease of shopping, high convenience
and a rapidly growing market. On a global scale, retail for online grocery is increasing nearly 7 times
quicker than on-ground formats and the market in India may be able to soon catch up to that level. The
retail industry of India is being estimated to have worth of over $500 billion (one of the top 5 markets
across the globe) and 30-40% of the total businesses will be attributed to the online retail space over a
span of next 7 years. Thus this is a great opportunity for e-tailing of any form, especially the e-grocery
space.
Currently, e-tailing in grocery in India is a massively unorganised space and tends to pose a big
challenge with respect to stiff entry barriers. The traditional ways of management of inventory and
logistics require intense cash-burning - a condition of business most of the bootstrapped Indian startups are not able to meet. Also, a crunch of Series A funding also made companies like Mumbai-based
ShopVeg to shut down their operations. Hence, when some other Mumbai-based start-up decided to
begin grocery e-tailing in that year only, the situation were not looking too exciting for the new rival.
But 22 months down the line, LocalBanya.com has not only set up the first online supermarket of
Mumbai but also raised Series A funding for the next level expansion. (Refer to Exhibit III: VC
Funding in Hyper local start-ups in India in April 2015).
Although there were firms before that had tried different grocery retail models in the digital space and
not succeeded, LocalBanya has come up with a lean business model that focuses on a convenient
warehousing and cash-and-carry mix. This has decreased the company's reliance on operations that are
capital-intensive and enabled it to implement a thoroughly efficient supply chain. Added to that, the
company has brought about some unique ways to take convenience of customers to the next level. Here
is a snapshot that tells about the start-up's viability and vision8.
Hyper local e-grocery

In todays world, the disruptors of brick-and-mortar retail are becoming rapidly vulnerable to the threat
of a new breed of hyper-local ventures that are smartphone app-based and which bring on board local
retailers servicing consumers in a fast time. They are able to deliver everything be it groceries or mobile
phones or medicines in a matter of a few hours and sourced directly from the supermarket right next
to your house9.
The group's retail arm, Trent Ltd operates an equal joint venture with retail major Tesco from UK
called Trent Hypermarket Ltd and is running an online grocery retailing pilot10. Another important
player is Reliance Retail promoted by Mukesh Ambani that is already in testing phase for the online
grocery retailing space with www.reliancefreshdirect.com and is present across different pockets in the
city of Mumbai. ( refer to Exhibit IV: Hyper Local e-commence )

http://www.businessinsider.in/This-E-grocery-Start-up-Uses-A-Lean-Model-For-Its-Online-Supermarket-In-Talks-To-Raise-

Series-BFunding/articleshow/31184822.cms

Accessed on April 28, 2015

http://articles.economictimes.indiatimes.com/2015-05-22/news/62504263_1_instacart-e-commerce-online-retail Accessed on
June 1, 2015

10

http://www.dnaindia.com/money/report-tata-group-forays-online-grocery-retailing-2077282 Accessed on April 17, 2015

Some of the Hyper local e grocery players in India

The aim of BigBasket is gross merchandise volume (GMV) of INR 8500 million gross merchandise
volume (GMV) in FY16, (three fold growth) from the runrate of INR 2750 million which has already
been achieved on an annualised basis. The other online store, LocalBanya is targeting INR 1500
million GMV by the end of this year, a growth of almost four fold from the Rs 40 crore which it is
expected to reach by March 201611. Currently BigBasket has a kitty of more than 10,000 products
across 1,000 brands and more than 450,000 active customers across five cities. It is expected to close
FY14-15 with INR 2500 million (US$40 million) as revenue. The company plans to expand its
presence to around five more cities by December this year. And over the span of next two years, it is
expected to rise to INR 1,8000 million (US$288 million)12.
Operating in Bengaluru, Hyderabad and Mumbai already, Bigbasket.com launched in Pune last month,
and will reach Delhi in March and Chennai by February end.
Mehrotra feels that LocalBanya.com will span across 12 cities by this year end. It is currently operating
in Pune and Mumbai and will be in Delhi by mid-March, Hyderabad by June and Chennai or Kolkata
by next year.
These online grocery stores will face competition not only from new entrants Flipkart and Amazon but
also from existing massive grocery chains going online. Nature's Basket, Spencer's, Reliance are all
becoming online too.
So the two hyperlocal grocery delivery services are in mode of expansion, one in the north from
Gurgaon near Delhi, and the other in the south from Bangalore.
Six months ago, ZopNow pivoted to the hyperlocal model. Before, it had a model based on inventory
such as the older Indian online grocers, like BigBasket. Then it changed to pick up grocery from
retailers and deliver the same to local customers, using two-wheelers as riders. This was a more
scalable and less capital-intensive than the inventory-based one (requiring warehousing and
preservation of perishable food).
The hyperlocal model similarly of PepperTap enables fast delivery and differentiates it from the more
centralized online grocer BigBasket, which has scaled up slowly, raised US$32 million for expansion
last September after nearly three years its previous funding round of US$10 million. PepperTap which
was launched in November 2014 offers a varied groceries range and daily-need products through apps.
PepperTap right now offers more than 15,000 SKUs across a number of categories including Staples,
fresh fruits & vegetables, household items , food & dairy products, , etc. The focus of the company is
building experience of buying the the best grocery and fresh product for their customers. They are able
to delight the customers, increase sales for partner stores while creating a concrete and sustainable
business for shareholders through their unique business model. Quality funds like SAIF Partners and
Sequoia Capital participate in their Series A funding establishing the fact that there is focus to create a
niche place in the market. This investment will help them iron out any chinks in thier armor, and build
on strengths to take the business from a single-city operation to across cities. Consumers are able to
place their orders through a mobile app and deliveries are made in two hours, making it ampng the
quickest services of its kind13. PepperTap right no accepts only Cash on Delivery payment option but
in the near future it plans to launch plastic card based payment options.
The model of Localbanya is an asset-light model, wherein about 2,000 products are sold from its
warehouses in Pune and Mumbai and the balance 12,000 products are got from various distribution
11

http://www.firstpost.com/business/delhi-is-next-battleground-for-online-grocery-majors-bigbasket-localbanya-2105233.html
Accessed on June 18, 2015
12 http://knowledge.wharton.upenn.edu/article/online-groceries-in-india-will-consumers-bite/ Accessed on June 1, 2015
13 http://yourstory.com/2015/04/peppertap-funding/ Accessed on June 18, 2015

channels on a need-to-procure basis. In Mumbai, the e-commerce grocery operations of the company
today have over a lakh customer base and does around 900 deliveries daily14. ( refer to Exhibit V : Ten
of the fast-rising hyperlocal startups in India15).
Paytm joins hyper-local game, enters grocery segment

For Paytm, grocery segment will drive more value-based transactions which majorly resorts to small
ticket size. While the average transaction size for grocery segment is about Rs 500 to Rs 800, recharge
has less average transaction size (INR 100- 300) 16 . The plan of the company is to reach 10,000
transactions in the grocery space in the first few months.
Zopper teams up with Citrus Pay Solutions

For such hyper-local marketplaces, payment gateways are coming out as a critical element especially
since these marketplaces are looking to compete with the top e-commerce companies of the country
like Amazon, Snapdeal and Flipkart.
The payment technology of Citrus Pay has been integrated by Zopper on to the app, and this will be
highly benefit in easing consumer worries at the time of making payments online17"
Nelson did a recent study according to which, modern trade accounts for seven percent of the total
market size. It lessened in growth rate in 2014 from 32 percent to 5.4 percent. Kiryans controlling 74
percent of the market increased by 7 percent18.
SRSGrocery.com

The launch of SRSgrocery.com has been announced by SRS Group, a one-stop destination for
requirements of grocery. The SRSgrocery website has small delivery slots and a nice user interface,
but the most alluring part of the service is that SRS has set no Minimum Order limits and also the
customers are not charged any delivery charges19.
Amazons Kirana Now

Amazon aims to deliver the goods with Kirana Now, "within 2-4 hours" making use of its own logistics,
the staff of the neighbourhood store, or one of its logistics partners. These stores are going to be listed

14

http://www.dnaindia.com/money/report-reliance-retail-s-online-grocery-plans-doesn-t-deter-localbanya-2067766 Accessed
on April 21, 2015

15

http://timesofindia.indiatimes.com/tech/slideshow/10-hyperlocal-startups-to-watch-out-for-inindia/itslideshowviewall/47293451.cms Accessed on June 15, 2015

16

http://yourstory.com/2015/04/paytm-grocery/ Accessed on April 21, 2015

17

http://articles.economictimes.indiatimes.com/2015-05-13/news/62124593_1_blume-ventures-consumer-electronicspayment-gateway Accessed on June 18, 2015


18

http://economictimes.indiatimes.com/industry/services/retail/why-retailers-like-amazon-reliance-retail-are-wooing-kiranastores/articleshow/47020582.cms Accessed on April 24, 2015

19

http://inc42.com/buzz/srs-group-takes-first-step-ecommerce-grocery-store-jewellery-apparel-follow/ Accessed on June 15,


2015

just like other sellers on Amazon, operating as a pure marketplace in India20. This service has been
introduced by Amazon only on the mobile platform and delivery of orders will be done within twofour hours. "These corner stores, which would be listed as sellers, will upload their catalogues online
on our platform and we would help with the back-end and technology," Agarwal said. The onus of the
deliveries would be taken by Amazon, the kiranas and third-party logistics companies21.
The largest online marketplaces of India (like Flipkart and Amazon) are attracting many many local
merchants in multiple cities and towns, with delivery strategies playing a key role in curbing costs and
winning customers.
Carts were deployed by Amazon in Panchkula, a small town in Haryana offering free tea, cold water
and lemon juice to business owners, retailers, sellers and small and medium enterprises where it began
a pilot of this initiative last week 22.
Snapdeal plans to enter e-grocery

Snapdeal targets delivering products in just two hours from the moment you placing an order. The
company has set up 40 fulfilment centres across 15 cities to aid its over 30,000 sellers. Snapdeal Plus
service was launched by the firm in an endeavour to further enable businesses particularly small and
medium sized businesses to sell products to over 25 million Snapdeal members on the marketplace
platform across 5,000-plus cities and towns in the country. 1,000 sellers are already a part of the
Snapdeal Plus service23 , The company for seller acquisition uses a hyper-local approach. Snapdeal
partnered with Godrej Natures Basket to sell online groceries, and made sure that the products are
delivered same day. Also fresh bakery products, non-veg offering and instant food will be introduced24.
Flipkart plans to enter e-grocey

India's largest electronic marketplace, Flipkart, established training centres in smaller towns to give
help to local merchants to sell online. A huge focus area for the company is creating a network of local
partners who can help sellers and aid their business needs like catalogue creation, packaging ,
manpower and training, and lending.
One97 to enter e-grocery

Another big funded venture entered the e-grocery space, which is currently full of regional or citybased companies. Most of them are operating in a marketplace model and coonect users and grocers .
The company is aiming to touch by June 3 million transactions a day , from the 2 million it claims to

20

http://gadgets.ndtv.com/internet/news/amazon-india-unveils-kirana-now-service-with-same-day-delivery-674805 Accessed

on April 2, 2015
21

http://timesofindia.indiatimes.com/business/india-business/Amazon-to-take-kirana-stores-online/articleshow/46696159.cms

Accessed on April 2, 2015


22

http://articles.economictimes.indiatimes.com/2015-04-21/news/61378627_1_amazon-india-amazon-flipkart-ecom-express
Accessed on June 18, 2015

23

http://timesofindia.indiatimes.com/tech/tech-news/Snapdeal-launches-Snapdeal-Plus-shortens-delivery-time-to-2hours/articleshow/35634679.cms Accessed on March 30, 2015


24

http://trak.in/tags/business/2015/04/08/flipkart-online-grocery-entry/ Accessed on May 15, 2015

be logging right now. The company is chasing 50 per cent growth in the next three months. To reach
there, they need to have as many categories accepting payments as possible.
My247market.com

My247market.com has been launched by Trent Hypermarket Ltd, which Fiora Hypermarket Ltd owns
and operates . Fiora Hypermarkets is a subsidiary launched by Trent in March 2014. On the ecommerce
platform, the products being sold include, fruits, staples, meat, vegetables, bakery and dairy
products, alongwith packaged food, baby care products, confectionery, beverages, pet care products,
personal care productsand home need products among others. It is currently delivering products to
a small portion of Mumbai and is expected to increase presence soon25.
E-GROCERY BUSINESS MODELS IN INDIA

Pure-play online grocery retailers are frontrunners of the boom in grocery ecommerce, which on a
year-over-year bases, has over tripled in size by number of players. Large warehouses and distribution
centers are being built by these companies outside of major cities and own fleets of GPS-enabled
vehicles to be able to serve online demand. LocalBanya , BigBasket & Reliance Fresh Direct are the
main players dominating this space.
Hyperlocal Delivery players offer for smaller chains a front-end and logistics management service, as
well as independent grocers for a commission basis or recurring monthly/annual fee. This model has
been applauded due to its lack of inventory investment. AaramShop, Grofers, Peppertap are few
leading players in this space26.
Logistics and Supply Chain Issues

In India, physical grocery retail, seems to be broken and dysfunctional because of problems of high
shrinkage, high rentals, and high inventory costs.
In the e-grocery business today, all models are capital-intensive. However, in the shadows of the giants
of Indian online retail, a number of online grocery stores are mushrooming that are experimenting with
different business models and delivery models: In the past few years, dozens of these have set up shop.
Examples include LocalBanya, BigBasket, EkStop, ZopNow , AaramShop, VeggiBazaar, MyGrahak,
Fresh N Daily and Farm2Kitchen. Many of these are hyper-local, catering to single cities, sometimes
even to only certain neighbourhoods of a city27.
Over all, the business requires near customer touch point, higher investment, and deals in time sensitive
inventory28.
Because of this, the online grocery businesses follow a model unlike an eCommerce model.
Businesses have become city specific.
A lot of these businesses are dependent on local grocery retail shop as delivery end points.

25

http://inc42.com/buzz/tata-group-joins-the-grocery-ecommerce-war-makes-ecommerce-foray-my247market/ Accessed on
June 19, 2015
26 http://inc42.com/buzz/realizing-the-huge-opportunity-in-online-grocery-space/ Accessed on June 15, 2015
27 http://forbesindia.com/article/real-issue/online-grocery-stores-mushroom-across-india/38677/1 Accessed on June 1, 2015
28 http://www.iamwire.com/2014/06/online-grocery-why-it-s-a-great-opportunity-why-it-s-still-nascent/27586 Accessed on June
1, 2015

The deliveries are completed within 3-4 slots in milk-run cycles schedule.
Delivery transportation is in high controlled on-line grocers environment.
Above model renders this business less scalable, requires high level of patience at start, and needs
organic growth for a long time until the player has answered the following questions
How to launch a new distribution hub?
How to setup transportation milk run in new city?
How to launch the business in a new city?
They connect with retailers and grocery stores that are existing. They do not compete with these stores.
They work with them, adding the online channel to the existing vertical. The model these startups run
on is simple: They deliver goods from neighbourhood stores for a fee and do not own any inventory,
making it a big challenge to pioneering Internet grocers. There is need to localize the approach to
online grocery needs more and hence their sellers and processes are required to be aligned to ensure
local fulfilment.
A 10-day inventory is held by BigBasket for all its products, the exceptions being fruits and vegetables
for which it holds an inventory of less than two days.
According to Navneet Singh, inventory-based model is fundamentally inefficient. More upfront capital
expense is required. Also they have higher fixed running costs, needs for higher working capital, have
more chances of wastage losses, and have sub-optimal logistics and limited delivery slots. In the
grocery focused market, hyperlocal , an on-demand, , asset-light model like BigBasket is better placed
to win. Teams at these inventory-led models are already contemplating whether they should start
switching to a different model, he says.
The drop-shipping model, which has riders of two-wheeler picking stuff up from retailers and
delivering them to customers, was started in India by a startup Grofers (Gurgaon-based), which has
just raised US$35 million in funding. But after grocery, Grofers has added other categories of goods
to its menu, whereas PepperTap has narrow-focus on grocery.
Now the challenge is to scale up quickly. For this, retailers would have to be onboarded to the platform
by showing them how it lets them widen their customer base. Initially, there was a bit of reluctance
from the retailers in sharing data and making changes to some of their processes that helped in faster
onboarding. However, as the company is gaining credibility with growth and success stories, the
company has been able to increase its partner stores revenues by as much as 40 percent, according to
Navneet Singh.
Consumers are becoming more at ease and more comfortable ordering grocery from their mobile
phones/smartphones. Early adopters of mobile apps in their everyday lives have been tech hubs like
Gurgaon and Bangalore , but with the fast spread of smartphone usage, the same thing is likely to be
replicated in one city after another.
New startups like PepperTap as well as the biggies of ecommerce like Amazon can observe the
opportunity in this. Amazon has started a service in Bangalore called KiranaNow just last month, to
deliver products from mom-and-pop stores called kirana shops to local residents. Competitor Flipkart
also has plans to get into grocery delivery soon. (Refer to Exhibit VI: Online Grocery Companies and
Coverage Areas).

On-demand delivery: How startups are making money

In India, BigBasket (which began operations in 2011), expects to break even in the next 36 months. It
has already achieved operational profitability in its home market, Bangalore. The labor and logistics
costs are much cheaper in India compared to western markets, so e-grocers here are expected to make
money rapidly.
Big Basket sources and maintains its own inventory. The last challenge to bringing India's retail sector
online is represented by groceries and household staples, a $338 billion industry that account for 69%
of India's retail wallet and which has established supply chains that are robust and difficult to disrupt.
Delivering food and other perishables at large scale difficult and capital intensive. Many brick and
mortar retailers like Spencer's, Trent and Aditya Birla have been expanding in the space, but their
collective losses in fiscal year 2014 crossed Rs 13,000 crore (according to credit rating agency Crisil).
BigBasket, which also sells its own brand of staples online, is maintaining profit margins above 20%
and is moving towards profitability29.
There are several advantages to the users from online grocery in terms of convenience and total cost.
Online grocers also offer a large variety of as much as 10,000 SKUs as against about 1000 SKUs in a
local shop. The on-line grocers of India are still in the build up phase, therefore the industry shows a
major opportunity but is still in its nascent stage.
Hyperlocal strategies are on their way to be central to Indian online marketplaces as they struggle to
keep delivery costs and schedules low. Right now, online retailers take at least 3-4 days delivering a
package, at an average cost of Rs 70 per kg of shipment. The move of expanding in smaller towns too
has become crucial as about 13 million of 53 million digital buyers stay in small cities and towns, the
non metros. About 69 million of India's 232 million active internet users stay in rural India, according
to the Internet and Mobile Association of India30.
Singh has to find a competitive strategy to survive and stay ahead of the mushrooming of online grocery
companies flush with investors funds and deep discounts offered by them to attract and retain
customers. Rolling out the service in tier II and tier III cities would pose much greater challenge for
him as he has to find trusted partners who share his ideas. From less than $1 million GMV run rate at
the start of fiscal year 2015-16, Papertap is on track to end the year with a GMV run-rate of over $250
million31. In October, 2015, it has raised first tranche of $36 million in a fresh round of funding
backed by Snapdeal.

29

http://economictimes.indiatimes.com/small-biz/startups/on-demand-delivery-how-startups-are-making-money-as-theychallenge-established-firms/articleshow/47033507.cms Accessed on April 25, 2015

30 http://economictimes.indiatimes.com/industry/services/retail/how-e-tailers-like-amazon-flipkart-are-roping-in-localmerchants-to-curb-cost-win-more-customers/articleshow/46994903.cms Accessed on April 22, 2015

31

http://economictimes.indiatimes.com/articleshow/49151863.cms?utm_source=contentofinterest&utm_medium=text&utm_ca
mpaign=cppst Accessed on November 5, 2015

10

Exhibit I: Indian Retail Sector Size and growth

Source
https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/BBGRetail.pdf Accessed on April 23, 2015
Exhibit II : M & A in Indian ecommerce market

Company
Freecharge
Myntra
TaxiforSure
Bookpad
Gaadi.com
TastyKhana
Little Eye Labs
BigDecisions.com
Zipdial
Cooltok
Coupondunia
Sourcebits
MeshLabs
Redbus
Jigsee
Novel Infosolution
BuyThePrice.com
Prizm Payments
CricBuzz
Bazee.com
We Read
LetsBuy.com
AdIQuity
Wishpicker.com

Acquired by
Snapdeal
Flipkart
Ola
Yahoo
Girnar Software
Foodpanda
Facebook
News Corp
Twitter
Kirusa
TimesInternet
Globo
Pegasystems
Ibibo
Vuclip
ConcertCare
Tradus
Hitachi
TimesInternet
eBay
Flipkart
Flipkart
Flipkart
Snapdeal

Date
Apr 2015
May 2014
Mar 2015
Sep 2014
Sep 2014
Nov 2014
Jan 2014
Dec 2014
Jan 2015
May 2014
May 2014
June 2014
May 2014
June 2013
Feb 2013
May- 2013
Mar 2013
Nov 2013
Nov 2014
Jun 2004
Dec 2010
Feb 2012
Mar 2015
Dec 2014

11

Esportsbuy
Shopo
Grabbon.com
Exclusively
RupeePower
Doozton
Flat.to
Bakfy
GlobalLogic
Cosmic Circuits
Dineout
InkFruit
Qubecell
3crumbs
JustMigrate
PlusTxt
Fakingnews
MensXP
Get Cloud Ready
Aditi technologies
Dhingana
Gawbl
Preburn
Adepto

Snapdeal
Snapdeal
Snapdeal
Snapdeal
Snapdeal
Snapdeal
CommonFloor
CommonFloor
Apax Partners
Cadence
TimesInternet
Zovi
Boku
(Crowdfire) JustUnfollow
(Crowdfire) JustUnfollow
One97
Firstpost
TimesInternet
Aditi technologies
Symphony Teleca
Rdio
Time City
Freecharge
Kuliza

Apr 2012
May 2013
Jun 2010
Feb 2015
Mar 2015
Apr 2014
Apr 2014
Jan 2015
Nov 2013
Feb 2013
Apr 2014
Feb 2013
Nov 2013
Oct 2013
Oct 2013
Aug 2013
May 2013
Nov 2012
May 2013
Apr 2014
Mar 2014
Aug 2013
Aug 2014
Sep 2013

Source
http://yourstory.com/2015/04/indian-entrepreneurs-merger-acquisitions-startups-growth/
Accessed on April 26, 2015

12

Exhibit III: VC Funding in Hyper local start-ups in India in April 2015


Date

Start Up

Industry

City

Investor

Investment ( in US$)

Swiggy

Online Grocer
Online food
delivery

Bangalore

Dragoneer
Investment, Accel
Partners,
Qualcomm, Times
Internet
Accel Partners,
SAIE Partneres,

LocalOye

Hyperlocal
Online Service

Mumbai

Tiger Global,
Lightspeed Venture

5 Million

Gurgaon

Tiger Global,
Sequoia Capital

35 Million

Gurgaon

SAIF Partners

10 Million

Apr-15

ZopNow

Apr-15

Apr-15

Apr-15

Grofers

Apr-15

PepperTap

Hyperlocal
Online Service
Grocery
Hyper Local
Grocery

Bangalore

10 Million
2 Million

Source http://trak.in/india-startup-funding-investment-2015/ Accessed on June 15, 2015

13

Exhibit IV Hyper Local e-commence

Source
http://articles.economictimes.indiatimes.com/2015-05-22/news/62504263_1_instacart-ecommerce-online-retail Accessed on June 1, 2015

Exhibit V : Ten of the fast-rising hyperlocal startups in India


Some of the recent ventures that have done noticeably well range from grocery to food delivery to
cashless transactions.
Grofers
Founded by Saurabh Kumar & Albinder Dhindsa, Grofers is a hyperlocal delivery platform that allows
users to order via their mobile app and get delivery of everything from grocery to pet food within
hours.Already present in Mumbai, Delhi and Bengaluru, Grofers now plans to expand into Hyderabad
and Pune soon.It recently raised INR 220 crore ($35 Million) at a valuation of close to INR 690 crore
($110 million) in its second round of funding within two months of closing its series A fund-raising from
Tiger Global and Sequoia Capital. The second round too has been entirely done by the two existing
investors.
TinyOwl
Started in 2014 by Harshvardhan Mandad, a IIT-B Alumni, TinyOwl is a location-based food ordering
startup from Mumbai. From confirming the order to informing the customer about the estimated delivery

14

time, TinyOwls app does it all. The startup has raised INR100 crore from Sequoia, Matrix Capital &
Nexus Venture partners. It added Gurgaon, Bangalore, Pune and Hyderabad in addition to Mumbai on
May 1. The firm has an ambitious target to operate in 50 cities by the end of this year.
BigBasket
BigBasket is one the early entrants in the online grocery shopping arena. Founded in December, 2011
by Hari Menon, V.S Sudhakar, Vipul Parekh and Abhinay Choudhari the startup has evolved and
carved a niche in this space. They have raised a cumulative funding of INR 278 crores; Ascent Capital
invested $ 10 million in 2012 while Helion Ventures and Zodius Fund II with Avendus invested INR 200
crore in September 2014. Currently operating in Bengaluru, Mumbai and Hyderabad, they plan to enter
Pune and NCR soon
Swiggy
Swiggy, another food delivery startup, founded by Sirharsha Majety, Rahul Jaimini and Nandan Reddy
has taken Bengaluru with a storm. Swiggys popularity can be attributed to no minimum delivery
requirement, availability of local restaurants, eateries and dessert places and much-talked about
service.
The firm plans to expand to Mumbai, New Delhi and Chennai by the end of this year after having raised
Rs 12 crore from Accel Partners and SAIF Partners as seed capital. After a seed round of $ 2 million
(Rs 12 crores) from Accel and SAIF partners, the company has raised $15 million from Norwest
Venture Partners within a span of few months.
LocalOye
Founded by Aditya Rao and Anupam Tulsiyan, LocalOye is a mobile marketplace for hiring local
service professionals, a service that will surely come in handy for anyone new to a city. Currently
available only in Mumbai, LocalOye allows users accessibility to services like tutors, home services,
wellness experts and help with events, using their mobile app. It recently got a Series A funding of Rs
31 crore ($5 million) from New York-based investment firm Tiger Global and venture fund Lightspeed
Venture Partners.
ZopNow
ZopNow, a Bengaluru-based online grocery store, claims to be the largest in the city. Its location-based
service allows users to order grocery through the mobile app and website. Founded by Mukesh Singh
in 2011, the startup operates in Bengaluru, Navi Mumbai, Thane, Pune and Hyderabad.
The company raised $10 million in April 2015 from San Francisco-based Dragoneer Investment group
in the second round.
PepperTap
PepperTap is Delhis solution for online grocery shopping. Once you order groceries using its mobile
app or website, PepperTap claims to deliver it in within two hours. It was founded by Navneet Singh
and Milind Sharma in November 2014. The firm raised $ 2 million in seed funding in February, 2015
from Sequoia Capital and $10 million in April, 2015 from SAIF Partners and Sequoia Capital. It plans
to expand to 10 more cities by the end of this year.
YuMist
YuMist is a new entrant in the food delivery market with an aim to deliver homely meals with a few taps
on your Android phones. Founded by Alok Jain, ex-CMO of Zomato and Abhimanyu Maheshwari,
YuMist raised $ 1 million (Rs 6.2 crore) from Orios Venture Partners. Currently operating in Gurgaon,
it plans to expand to Delhi-NCR by the end of this year.
Momoe
Momoe claims to be a mobile payments experience that allows payments via a mobile app at
restaurants, retail stores, home deliveries and urban markets in Bengaluru. This fast growing startup
founded by Utkarsh Biradar, Karthik Vaidyanathan, Aiman Ashraf, Neelesh Bam and Ganesh
Balakrishnan claims to have 45,000 users having completed transactions worth Rs 1.2 crore. Having

15

raised $1.2 million in seed funding from IDG Ventures, Jungle Ventures and India Quotient, it is aiming
to complete Rs 3,000 crore-worth transactions in the next 18 months
LetsBinge
LetsBinge claims to be an innovative payment application for the F&B industry. Founded by Ajay
Joseph, Santosh Martin, Gaurav Arora, Christopher Lopez, Amit Roy and Shankar Sukrutaraj. The
app, available for iOS and Android, allows users to store up to four card details, gives the ability to split
bills and other payment options. Currently available in 25 restaurants in Bengaluru, it plans to add up
to 1,000 more restaurants and expand to Delhi later this month and Mumbai by the end of the year.
Source http://timesofindia.indiatimes.com/tech/slideshow/10-hyperlocal-startups-to-watch-out-for-inindia/itslideshowviewall/47293451.cms Accessed on June 15, 2015

Exhibit VI: Online Grocery Companies and Coverage Areas

Source http://www.iamwire.com/2014/06/online-grocery-why-it-s-a-great-opportunity-why-it-s-stillnascent/27586 Accessed on June 1, 2015

16