Softbank-backed Grofers has advanced its plans to go public by the end of 2021. The move comes after online groceries delivery platforms witnessed a spike during the pandemic.
The company, which had initially planned to go public in 2022, expects to turn profitable this financial year. Grofers’ cofounder and CEO Albinder Dhindsa told PTI that the company has already turned operationally profitable in January 2020, and is on track to become EBITDA and cash positive by the end of this year.
He noted that the company closed the financial year with a revenue of INR 2,500 Cr and its valuation is estimated to be around INR 6K Cr without elaborating on it further. Notably, Grofers’ had clocked in INR 83.62 Cr in revenue, representing an 56.5% year-on-year (YoY) increase, in the FY19. Meanwhile, the company’s expenses had also boomed by 70.5% reaching INR 531.6 Cr from INR 311.7 Cr in FY18. In terms of losses, the spoke was at 73.4% to reach INR 448 Cr.
According to the data shared by the company, Grofers witnessed high demand during the lockdown, and expects its business to stabilise at 30% higher than the pre-Covid levels. Dhindsa added, There has also been a 40% increase in basket size as compared to the pre-Covid era. We are seeing 64% first-time online grocery shoppers and 15% first time online shoppers.”
Overall, Grofers claims to have served 42 lakh households by the end of May, when the Indian government started opening up the economy. In June alone it shipped 4.4 Cr items, with 99.7% accuracy. To meet the spike in demand, Grofers also hired over 3K employees for its supply chain operations and will be hiring another 2K warehouses and delivery staff in the coming months. Currently, Grofers has 10,000 partner stores to run a fast and lean supply chain from manufacturers straight to consumers.
“As an organisation, we have always channeled our efforts towards providing value to our customers. And, we will continue to do so by staying true to our brand promise of low prices through our focus on building an efficient supply chain and technology-driven innovations,” Dhindsa added.
The company, which was founded in 2013 by IIT graduates Albinder Dhindsa and Saurabh Kumar, has also opened up three new facilities and another two are in pipeline (Bhiwadi and Lucknow). But by the end of this year, Grofers aims to add nearly 10-15 more facilities to maintain constant supplies of goods for its customers.
According to US-based market research company Forrester Research, the Indian online grocery delivery will clock $3 Bn in sales by the end of the year. This would represent a 76% hike compared to $1.7 Bn last year. Meanwhile, the ecommerce segment is expected to grow by 6%, amounting to $35.5 Bn this year. However, compared to last year, the firm would also seek a hike of $2 Bn.
Though several reports also suggest that this peak in grocery delivery is temporary, and the market will subside after the pandemic is over. Therefore, it seems a little curious how these grocery delivery platforms will maintain their growth, especially after the market has gotten tougher with new entries like JioMart. Besides this, Amazon and Flipkart have also diverted their attention to groceries delivery during the pandemic.