Grofer bullish on private labels aims turnover 5000 crore
The private label allows us to provide customers with the best quality products at the lowest prices by shortening the supply chain.
The online marketer with marquee names like SoftBank, Sequoia Capital, and Tiger Global among others as investors, closed FY18 with Rs 950 crore sales and is targeting a stronger growth this fiscal year with a revenue of Rs 2,500 crore of which half will contribution from private labels, which is 25 per cent at present.
The private label allows us to provide customers with the best quality products at the lowest prices by shortening the supply chain. The products go through a stringent quality check that competes with the best available brands in their respective categories.
"Our competition, with these launches, is not just other grocery retailers but also FMCG brands. To optimise on marketing cost, we will continue to build our parent brand and not our individual range of brands," Kumar said.
"Today we have over 700 products within the Grofers brand of products of which over 250 products are in the FMCG space. This will increase to over 1,500 by FY19, wherein we will add another 500 items in the FMCG portfolio spread across various categories," Kumar said.
Staple food products form a significant part of its portfolio, he noted, while adding that growth in this segment is now being driven by popular processed food products like tea, ketchup, jam, breakfast cereals.
"The online grocery space will continue to grow at a rapid pace with growth doubling up over the next three years.
"From the initial hype around convenience, the segment is now being driven by consumers who have become more familiar with the offerings and are now looking at differentiated solutions around savings, quality, convenience and other product offerings," Kumar said.
Its average daily order volumes were over 35,000 per day in June 2018.
The company is present in 13 cities, including the eight large metros and Gurgaon, Noida, Jaipur, Lucknow and Kanpur and Kumar, said they do not have any immediate expansion plans but continue to evaluate new geographies and categories for expansion.
The company has managed to break even in key markets and is aiming to break even in all its markets by 2019.
It has so far raised USD 226.5 million from investors which include SoftBank, Sequoia Capital, Tiger Global and Apolette Asia and on further fundraising plans, Kumar said,
"We are well capitalised to drive our current growth plans but we will continue to raise funds to scale up supply chain capabilities." PTI DS BEN
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