Amazon knows that when delivering groceries, time is of essence in the Indian market

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Amazon knows that when delivering groceries, time is of essence in the Indian market
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After gadgets, fashion and home appliances, it’s time to buy groceries online as Amazon is planning to redefine on-demand delivery. While requirement of all other products can be managed if delivery is delayed, grocery, being an essential daily-need product category, its delivery always needs to be on-time. And to ensure this, Amazon’s new ‘Kirana Now’ programme will deliver orders from small neighbourhood stores to your door step in two to four hours.

Instead of building warehouses, delivery-based models are asset-light by default, making it easier to scale up in an industry that traditionally has high financial entry barriers, according to the Economic Times. Amazon may start deliveries from kirana stores in select areas of Bengaluru for customers who submit orders on their mobile phones.

Just like Amazon, yet another online grocery store in Bengaluru, ZopNow has also shifted its focus from owning warehouses to delivering for HyperCity stores. ZopNow has spent over a million dollars to set up each warehouse, while $15,000 to $20,000 are required to start delivery operations in a city. Market watchers are of the opinion that the time is ripe enough to invest in delivery based services. "From a company perspective, this is much more capital efficient," Mukesh Singh, co-founder of ZopNow has told the ET.

LocalBanya, an online store operative in Pune, Mumbai and Hyderabad, too does over 1,000 orders a day and plans to launch delivery services in 12 cities this year. "Over the last 15 years, modern trade and other unorganised players have pumped in 90% of their investment into first-mile supply chain and inventory-based warehouses, whereas nobody had really been able to crack the last-mile distribution and delivery to the customer. Instead of competing, we'd rather partner with them and focus on innovating in the areas that need attention in the industry," said Karan Mehrotra, co-founder and CEO of LocalBanya told ET.

While the inventory based models take years to get established, this market place model however just takes around 3 months. On demand delivery startup, Gofers, which had raised Rs 63 crores from Tiger Global last month, had already grown well in Delhi NCR, Mumbai and Bengaluru.
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(Image : Reuters)