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Grofers: Re-Energizing Kirana Stores through M-Commerce

In 2014, the food and grocery industry in India experienced a surge in the online grocery market. Before that time, existing e-business players had largely avoided the online grocery market because of its complex logistics requirements and issues related to last-mile delivery, or reaching customers in remote areas. The rise of online grocery businesses raised concerns for brick-and-mortar stores, especially local kirana stores (corner stores), about becoming redundant in the future. With limited or no technology adoption, these kirana stores had no way of going online. Grofers came to the rescue of these local stores with a mobile commerce (m-commerce) model for groceries that promised on-demand delivery within 90 minutes. However, with very low margins in the grocery business compared to lifestyle products, in addition to last-mile delivery and returns complexities, it remained to be seen whether Grofers would be able to carve out a niche in the grocery industry with its innovative model. Considering the low entry barriers and the easily replicable business model, how viable and sustainable was an m-commerce business like Grofers?

Collection: Ivey Business School (Canada)
Ref: IVEY-9B16M120-E
Format: PDF
Number of pages: 9
Publication Date: Jul 8, 2016
Language: English
Review date: Jul 8, 2016

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Description

In 2014, the food and grocery industry in India experienced a surge in the online grocery market. Before that time, existing e-business players had largely avoided the online grocery market because of its complex logistics requirements and issues related to last-mile delivery, or reaching customers in remote areas. The rise of online grocery businesses raised concerns for brick-and-mortar stores, especially local kirana stores (corner stores), about becoming redundant in the future. With limited or no technology adoption, these kirana stores had no way of going online. Grofers came to the rescue of these local stores with a mobile commerce (m-commerce) model for groceries that promised on-demand delivery within 90 minutes. However, with very low margins in the grocery business compared to lifestyle products, in addition to last-mile delivery and returns complexities, it remained to be seen whether Grofers would be able to carve out a niche in the grocery industry with its innovative model. Considering the low entry barriers and the easily replicable business model, how viable and sustainable was an m-commerce business like Grofers?
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Year: 2015
Geographic Setting: India
Industry Setting: Retail Trade;

Learning Objective

This case is primarily intended for MBA-level courses in e-commerce. The case is also suitable for courses in operations, strategy, and information systems, especially in online business programs. After completion of this case, students should be able to understand the following: ·The online grocery market and its various models in India ·The complexities of an on-demand mobile commerce business model ·The various challenges and opportunities faced by an m-commerce business start-up and the available solutions

Grofers: Re-Energizing Kirana Stores through M-Commerce

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"Grofers: Re-Energizing Kirana Stores through M-Commerce"