Apple by apple, grocery apps find space in middle class shopping baskets

Grofers, which was launched last December, says it has seen phenomenal growth in the 10 months as app downloads have reached a million. “We have a 60 per cent customer retention rate, higher than any other service in the sector,” claims Sharad Harjai, AVP, Marketing for Grofers. Grofers says it has tied up with 4000 merchants in 26 cities and have achieved a delivery fulfillment rate of 90 per cent.

The app gets most of its orders from Delhi, where it was launched, followed by Bangalore and Mumbai. The brand has also tied up with Body Shop, Himalaya and Reliance Digital to deliver pretty much everything a customer might need.

[related-post]

Navneet Singh, CEO of PepperTap, says the growth in this sector will be fairly strong and claims they are seeing close to 100 per cent growth month on month. “However, there are two-three big players in the game and while the space is big enough for everyone, some will dominate,” he says commenting on the the competitive nature of the space.

And competition in the segment is growing. Recently, even Flipkart launched its own app for grocery services in Bangalore called Flipkart Nearby.

PepperTap app says Delhi is their biggest market.

PepperTap says it has linked with 230 stores and Delhi is their biggest market followed by Pune and Hyderabad. And if PepperTap’s CEO is to be believed, even two-tier towns are catching up with the online grocery shopping fad.

“We’ve also seen great response in cities like Vishakapatnam, Mysore and Jaipur. In Jaipur, the response we got was overwhelming and unexpected with over a thousand orders,” adds Singh.

While the idea of buying groceries on an app sounds appealing, it does come with its own drawbacks. Very often items listed on the app are not available in the store, even if it lets you go through with the order process. You might click on a particular brand of pasta, only to find the store sends you a different one. Or that the shampoo bottle you asked for comes in a different size.

Singh has an explanation for this. “We are linked to the POS. However, the data quality in most stores is not very good and there’s no real-time syncing. We do take a stock of the inventory and follow up with a physical audit of the store. But this is a behavioural issue that can be only solved over time. The vendor/shopkeeper who has just started with us, might not want to invest so much initially to keep an accurate data check.” Singh is confident this is a flaw that companies can fix over time by helping vendors keep a better tab of their stock and inventory.

Grofers this year even offered to do midnight deliveries for iPhone 6s devices.

Customers, it seems, are quite happy to use more than one service to get their daily groceries. Delhi-resident Gursartaj Singh Nijjar, who has also lived in Mumbai and Bangalore, has used BigBasket, Zopnow and Grofers. “BigBasket was in Mumbai. In Bangalore, I preferred Zopnow, as it was faster and also the BigBasket delivery-timeslots were a bit inconvenient,” he says. “When I was on campus in IIM-Bangalore, I used to order a lot of fruits from these apps, apples mostly. The quality is good,” he says.

But not everyone is convinced about the quality of fruits and vegetables. Menaka Rao, a Mumbai resident, who says she uses BigBasket.com about once a month, says, “While the service is not bad, it’s very dicey when it comes to vegetables. Sometimes you don’t get the best veggies, especially the leafy ones. You have to know which ones are safe to get.” Rao feels it is also easier to order heavier things like a big bag of washing powder, or other items which one might buy in bulk usually.

Raghav Tankha, a Delhi law-student who uses PepperTap and LocalBanya, has not been disappointed in the vegetable quality so far. But fruits is where the apps fall short, according to him. “Look these online things always have some issue. I don’t think it’s great for fruits. However, delivery isn’t an issue and the order always turns up,” he says.

Tankha orders groceries online almost five times a month, but he feels the variety is often limited, especially for the more exotic stuff. While he’s okay with ordering things online, when he can’t find what he needs, he’s also not averse to just going to local market to buy his vegetable..

Harjai says Grofers has been working on quality control. “You have to train the delivery boys as well on how to choose and pick. Plus, the idea of quality when it comes to vegetables, fruits can be subjective,” he says. They do keep a tab on feedback for a particular vendor and if there are too many issues and complaints, they don’t hesitate to delist, he adds.

On the vegetable issue, he adds that one needs to keep in mind the nature of the market as well. “By the second half of the day in some markets, quality products might be sold out. In some markets, the first half might not get the best stuff. So those issues are there.”

PepperTap’s CEO has a different take on the quality issue. “The issue comes because each vendor has his own supply chain and the quality gets affected. What we want to do eventually is go to wholesalers, telling them we are bringing these vendors or stores for tie-ups and put quality checks in place.” This he feels will go a long way in ensuring quality supply for their stores.