Ola May Book A Ride Into Online Grocery Business With Foodpanda

Ola May Book A Ride Into Online Grocery Business With Foodpanda

SUMMARY

Ola reportedly plans to launch its grocery platform in early 2019

It may leverage 125K Foodpanda delivery execs for grocery order fulfilment

Ola’s rival Uber is planning to launch some pilot projects for grocery delivery in India by next year

Cab-hailing company Ola may leverage the 125K food delivery riders from its food delivery unit, Foodpanda, for grocery fulfilment. The move comes as Ola’s global rival, Uber, looks to launch a few pilot projects for grocery delivery in India by next year.

Foodpanda’s Indian business was acquired by Ola from its Germany-based parent firm Delivery Hero Group in an all-stock deal for $31.7 Mn (INR 202 Cr) in January.

It is being speculated that Ola has been working on a grocery-specific platform for the last five months and aims to launch it in early 2019, a media report said, citing unnamed sources.

The Bengaluru-based company is also in talks with major retail chains and cash-and-carry companies across the country to work on a few partnerships and plans to offer retailers a revenue-sharing model.

An email query sent to Ola didn’t elicit any response till the time of publication.

Interestingly, this is not the first attempt by Ola to foray into the grocery delivery segment. Earlier, in March 2016, the company had shut down its grocery arm, Ola Store. Here are a few facts about Ola Store:

  • Ola started beta testing its app ‘Ola store’ for grocery and daily needs in June 2015
  • The app was operational in Bengaluru, Hyderabad, and Gururgram, with tie-ups with retail chains such as PNP Retail, Top N Town, and Namdhari’s Fresh, among others
  • It started with more than 12,000 products under 13 product categories including fruits and vegetables, breakfast, dairy, bread and eggs, etc
  • Ola Store’s Android app had over 250 grocery stores providing over 16,000 products in 13 categories

Ola, founded in 2011 by Bhavish Aggarwal and Ankit Bhati, has been expanding its presence across the globe — including New Zealand, the UK, and Australia. At the same time, it is working on strengthening its foothold in India.

Recently, Ola announced the integration of food delivery app Foodpanda into its cab-hailing app. Foodpanda claimed to have witnessed a substantial increase in the number of food orders after the introduction of new offerings and upgrading its delivery logistics in India.

Ola’s plans to leverage Foodpanda’s delivery network for its grocery business comes at the time when online grocery sector is expected to almost quadruple over the next three years to touch $1.38 Bn (INR 100 Bn) in terms of revenues.

A Goldman Sachs report forecast that the Indian online grocery market is set to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022.

The sector, which has seen with high-investor attraction from the likes of SoftBank, Tencent, Temasek, etc, has been struggling for growth and to manage high rates of cash burn. Here are a few highlights about the big players in the segment who could challenge Ola:

  • Gurugram-based online grocery startup Grofers may soon raise $140 Mn-$150 Mn (INR 1100 Cr- INR 1200 Cr)in a fresh round of funding led by Japanese conglomerate SoftBank’s Vision Group, with participation from German retail group Metro AG
  • Flipkart Supermart, Walmart-Flipkart’s online grocery arm, is currently operational in all major pin codes of Bengaluru with plans to expand to five to six major cities by the end of 2018
  • Amazon Pantry, Amazon Prime Now, and the Google-backed Dunzo are some of the other big players making their way into the online grocery segment in India
  • Micro-delivery players such as Milkbasket, Daily Ninja, ZopNow, Satvacart, and Godrej Nature’s Basket also hold a significant share of the online grocery market
  • With plans to touch a $1 Bn (INR 7283 Cr) gross sales run rate by the end of FY19, BigBasket is aiming at slashing its cash burn rate

A report by Kalagato suggested that as of March 2017, BigBasket held about 35% of the market share in the online grocery segment, closely followed by Grofers at 31.5%, and Amazon at 31.2%.

With leading ecommerce companies like Flipkart and Amazon already waging a war against established players such as BigBasket and Grofers, Ola’s entry into this segment is sure to intensify the competition further.

[The development was reported by Business Standard.]

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Ola May Book A Ride Into Online Grocery Business With Foodpanda-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Ola May Book A Ride Into Online Grocery Business With Foodpanda-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Ola May Book A Ride Into Online Grocery Business With Foodpanda-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Ola May Book A Ride Into Online Grocery Business With Foodpanda-Inc42 Media
Ola May Book A Ride Into Online Grocery Business With Foodpanda-Inc42 Media
You’re in Good company