Businessmodel of Grofers

Customer Segments

Grofers provides an online grocery shopping service to members of the general consumer population. It serves a range of consumer demographics, targeting particular customers who value convenience and efficiency.

This is attractive to young professionals and working families whose spare time is at a premium, enabling them to cut down the time and effort consumed by grocery shopping. Grofers also includes merchants, notably pharmacies and grocery stores, among its customers. The Company serves its commercial partners by extending their marketing and sales reach, taking a commission on its orders.

Grofers principally serves a customer base in its native India, targeting the country’s largest cities. The Company serves customers across Delhi, Gurgaon, Mumbai, Bangalore, Kolkata, Noida, Pune, Ahmedabad, Chennai, Hyderabad, Jaipur, Lucknow, Surat, Chandigarh, Kanpur, Agra, Indore, Nagpur, Ludhiana and Vadodara.

Value Propositions

Grofers provides value to its customers in the following ways:

• Its convenience and efficiency, with the Company offering a service that enables customers to reduce the effort and time involved in grocery shopping, ensuring that customers receive their orders within a specified timeframe;
• Its accessibility and ease of use, with the Company operating an online and mobile ordering platform that can be used across multiple devices, and can be utilised quickly and easily by customers;
• Its extensive domestic reach, with the Company providing grocery delivery services to customers in communities across all of India’s major cities, including in Delhi, Mumbai, Gurgaon, Pune, Bangalore, Kolkata, and Chennai; and
• Its large network of participating merchants, with the Company partnering and providing delivery services to a large network of pharmacies, grocery stores, electronics sellers, and other merchants, offering a wide range of branded items. ### Channels

Grofers operates a website at www.grofers.com, through which it provides information on its products, brands, and operating markets. The Company’s website also doubles as its online ordering platform, which allows customers to browse products and brands, manage their account and location, place orders, and make payments.

The Company offers the same functionality through its mobile app, which is available on iOS and Android devices. This online sales channel is supported by a physical team of support personnel who operate out of call centres and offices.

Grofers provides its delivery services through a combination of in-house delivery drivers and third party logistics providers. The Company has recently brought on Mumbai-based Grab a Grub Services and Opinio to assist in the Company’s delivery operations, in a bid to cut costs.

Customer Relationships

Grofers provides its services to customers primarily on a self-service basis. Both the Company’s online sales platform and its mobile app allow customers to browse products and brands, manage and alter account details, place and track orders, and make payments without interacting directly with members of the Company’s sales and support personnel.

Grofers provides ongoing support to its customers, with its customer care staff offering personalised assistance over the phone or via an online contact form. The Company also offers various online resources regarding the delivery and ordering processes, notably in the form of FAQs.

The Company also maintains contact with its customers, keeping them updated with company and industry developments, through its blog, which hosted on its website. Additionally, Grofers operates social media accounts with Facebook, Twitter, LinkedIn, and Instagram, through which it is able to interact with its customers directly.

Key Activities

Grofers operates as an online delivery service provider and ecommerce company. It develops and operates an online grocery delivery platform, through which consumers can place orders for delivery of groceries, fruits, vegetables, cosmetics, electronics, and other daily items.

The Company’s product catalogue also includes fresh produce, pet care products, bakery products, meats, flowers, sports products, household products, baby care products, and others.

The Company makes deliveries through both an in-house fleet of delivery vehicles and through a certain third party logistics companies. Grofers serves customers across India’s largest metropolitan communities, including in Delhi, Mumbai, Kolkata, Chennai, Pune, and Hyderabad.

Key Partners

Grofers works closely with a broad range of partner companies and organisations in order to provide its customers with an efficient and reliable service. These partners can be organised broadly into the following categories:

• Merchant Partners, comprising the Company’s network of physical retail partners which provide products and merchandise for the Company’s product catalogue, and to which the company provides delivery services;
• Supplier and Vendor Partners, comprising suppliers of services, technologies, equipment, and tools that are used across the Company’s enterprise to ensure the efficiency and stability of its operations;
• Technology Partners, comprising software and hardware providers and integrations companies that help to ensure the functionality of the Company’s online ordering platform;
• Logistics and Delivery Partners, comprising various delivery service providers and logistics companies which assist the Company in fulfilling delivery orders placed by customers across India; and
• Strategic and alliance Partners, comprising market leading companies across various industries with which the Company collaborates on marketing, branding, and other joint projects. Grofers has a number of key partnerships in place. This includes the Company’s partnerships with delivery service providers Opinio and Grab a Grub Services, as well as a strategic partnership with expense management startup Happay, and a cash on delivery partnership with Yes Bank.

Key Resources

Grofers’s key resources are its intellectual properties and technologies, its online sales and delivery platform, its IT and communications infrastructure, its delivery channels – including its third party logistics providers and proprietary fleet, its network of participating merchants, and its personnel.

Cost Structure

Grofers incurs costs in relation to the procurement of merchandise and services, the management of its vendor and merchant partnerships, the development of its online platform and website, the maintenance of its IT and communications infrastructure, the management of its partnerships, the implementation of marketing and advertising campaigns, and the retention of its personnel.

Revenue Streams

Grofers generates revenue through the provision of grocery delivery services to customers in India. The Company operates under a commission-based revenue model, taking a commission from merchants for all orders placed through its platform. Reports suggest that this commission is around 8% for orders under INR 700 and 12% to 15% for order between INR 700 and INR 1,000.  Customers are charged only if their order is below INR 250, in which case the company takes a fee of INR 49 from the customer.

Grofers remains privately owned, and as such is not obliged to publish its financial performance figures online. Reports suggest, however, that in the year 2014 to 2015 the Company generated annual revenue of INR 8.6 million (approximately $127,000).