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Online classified platform Quikr will soon be rolling out on-demand grocery and food delivery service. Quikr plans to make this foray by partnering with neighbourhood stores and restaurants from where customers can order products ranging from grocery to food items.

In food delivery, Quikr will compete with on-demand platforms such as Zomato, Swiggy, and UberEats. While, in grocery delivery, it will compete with players such as Grofers, Bigbasket, ZopNow and Amazon Now, among others.

Unlike rival online grocery platforms like Bigbasket, Grofers and others, which initially did not charge an extra delivery fee, Quikr plans to levy a nominal fee on each doorstep delivery order, from the very beginning. It is to be noted that Bigbasket now charges a fee of $0.5 for express delivery services (i.e. delivery within 90 minutes).

Online Grocery: An Untapped opportunity But A Tough Market To Crack

The Indian online grocery market is said to be a tough segment owing to low-profit margins due to the monopoly of local offline vendors. Peppertap (B2C business), Local Banya, TownRush, Paytm Zip, Ola Store, Flipkart’s Nearby – all got added to the list of failed attempts that sooner or later were unable to drive the matrix required by the segment. Despite offering free doorstep delivery service, startups such as PepperTap and LocalBanya which initially managed to gain good traction could not sustain for long and compete with other firms dominating the online grocery delivery space.

However, as the startup winter of 2016 got over, the segment has again started gaining traction amidst investors as well as the players. Recently, BigBasket raised a total of $5.8 Mn (INR 32.65 Cr) from Helion Ventures Partners and others in three tranches and Grofers also secured $14.7 Mn (INR 96 Cr) from its Singapore-based parent company Grofers International for boosting its business.

As shared by a ZopNow spokesperson with Inc42, almost all grocery retail players in India have stores primarily in urban areas with a majority being in top 10 cities. Online grocery players on the other hand mostly cater to big four to five cities though ZopNow is present in eleven cities. But the real insight goes beyond this information.

“Offline players have managed to go deep into economic strata but online players – well only those who are considered to be in the great Indian middle class or upwards in terms of income of the household. So far, grocery retail is not even tried by millions of customer who have already adopted retail players offline. This poses an opportunity as well as a threat to online grocery players. The winner will be those who offer education and cater to the need of those who are yet wary of ordering veggies and staples online,” he added.

Quikr: A Quick Overview Of the Developments To date

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Founded by Pranay Chulet in 2008, Quikr claims to have a user base of over 30 Mn per month. It is present in 1,000 cities in India and operates across 14 classifieds businesses including mobile phones, household goods, cars, real estate, jobs, services, and education.

Till date, Quikr has received $350 Mn from investors like Kinnevik, Tiger Global Management, Matrix Partners India and Warburg Pincus. Last October, the company got a 13% hike in its valuation from one of its investors, Swedish firm Kinnevik AB. In its latest quarterly report, the Swedish investment firm valued its 18% stake in Quikr at $265 Mn, increasing the unicorn’s total valuation to $1.47 Bn.

Since its launch as a classified portal, Quikr has extended its verticals slowly and steadily in domains such as home rental, beauty services as well as online recruitment. Recently, it acquired online recruitment site Babajob. Last year, it acquired CommonFloor, Grabhouse, Stepni, ZapLuk, Salosa, StayGlad, and Hiree. Last month, it also acquired local services startup Zimmber for $10 Mn.

In Conclusion

The Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY ’19 growing at a CAGR of 62% from 2016 to 2022. Morgan Stanley expects the online food and grocery segment to become the fastest-growing segment, expanding at a compounded annual growth rate of 141% by 2020 and contributing $15 Bn, or 12.5%, of overall online retail sales.

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In the aftermath of shutdowns that rocked the country’s online grocery sector, players that once relied primarily on  discounts and cashbacks for customer acquisition, have now started pushing for unit positive economics for a sustainable venture in long run.

For instance, as the Bengaluru-based online grocery startup, Bigbasket established a greater presence in the online on-demand grocery sector, the inventory-led firm started charging an extra fee per order. Apart from that, Bigbasket switched its strategy to get big ticket size orders by providing a free doorstep delivery for the orders above $15. Recently, Swiggy also added the minimum order feature and increased its delivery services varied accordingly with the load on the portal.

The online grocery space is also attracting major traction from the country’s leading ecommerce players such as Paytm, Flipkart, Google, and Amazon. Other startups in the online grocery sector include ZopNow, Satvacart, Godrej Nature’s Basket and DailyNinja, among others.

Amidst this cut-throat competition and entrance of leading players in the on-demand grocery delivery, how Quikr will be able to leverage its resources to excel will be worth watching.

(The development was reported by Bloomberg Quint)

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