GROFERS
Grofers is an on-demand delivery service connecting local shops with consumers. It was one of the first companies in India to create a hyperlocal marketplace for goods, starting with groceries. It has raised a lot of funding and has shown good growth in the Indian market.
Why I find this interesting?
- Essentially a delivery service; Fulfilling orders by procuring from local vendors; Scalable
- No capital required for buying inventory
- Shortest delivery time since goods are purchased from vendors closest to the customer's location
- Strong competitive advantage since big e-commerce players like Amazon & Flipkart will find it difficult to establish last mile logistics
- Lower delivery costs since delivery is done locally and does not involve large distance/intra-city logistics
My Concerns
- Margins are limited since goods procured from through retailers primarily
- Limited products for customers since only products which are available locally are shown
- Profitability is more difficult to achieve
Grofers and other startups operating with this model have seen a lot of interest from investors in the past. Profitability will be a key concern going forward. I feel the model has a lot of value and is here to stay in the long run.
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