If industry veterans are to be believed, then, online grocery market is the new barbeque that everyone wants to roast upon. India presently ranks sixth amongst the largest grocery market in the world. The retail market in India is expected to hit $725 Bn (about INR 43 lakh Cr.) by 2017. Retail consultancy Technopak estimates online grocery business to grow at a rate of 25-30 per cent in major cities of India.
Entering the league, this time is Alibaba backed, One97′s flagship brand, Paytm. The Mcommerce platform, Paytm is set to enter the online grocery market under a new vertical which will be headquartered in Bangalore. The company is floating a new app called Zip to connect users to both local offline as well as online grocers.
The online mobile payment platform is said to be raising $575 Mn funding from Chinese ecommerce player, Alibaba through its affiliate Ant Financial Services.
Paytm plans to use a part of the fresh funding in its new grocery etailing, business. It expects that online grocery will help boost its transaction rates and customer acquisition, which are an important benchmarks for investors at the time of valuing a company for fresh funding.
With the arrival of online grocery in online payment platform’s kitty, Paytm will stand face-to-face in competition to other horizontal and vertical players.
Interestingly, the new grocery business will operate as a separate entity handled by Paytm. Primarily, the company is focused to start the operations with a small team of 20 people handling about 10,000 transactions in the first few months. While, the average ticket size for transactions in this segment is INR 400-800.