Are you planning to start an online grocery shop? Starting some online store has become easier nowadays. The only difficult thing is grabbing more customers to buy things from your website and keeping them coming back in the future. The Indian online food and grocery market are known to be the sixth largest worldwide.
Couldn’t believe your eyes? Food and grocery in India placed as sixth globally?
Have a look at some of the numbers to have a clear idea of how successful these online grocery stores are in the Indian market.
The grocery market is expected to grow at 70% CAGR to reach $7.5 Billion by 2022 – according to Praxis Global Alliance, a consulting firm.
And a recent report says – Online grocers are increasing at a 3x rate every year and the entire sector is growing at a 13% annual rate.
This growth trend has been driven mainly because of the pan-India Giant players like BigBasket, Grofers and now Amazon Pantry. Having said that, the grocery eCommerce business also paves a way for small and individual players who wish to build their grocery eCommerce store to cater the needs of the local customer base.
Find How Big Basket Business Model Works
The big basket works on two models like inventory led and hyper-local delivery.
So are you wondering what are this model is all about? Let us discuss it here.
Some sources say that the big basket works based on the inventory model.
Bigbasket buys the products from the leading suppliers in the market such as P&G, HUL, farmers, mills, etc. They store those products in their own warehouse or go-downs, which is called the inventories. From there, they serve their customers.
They buy the products from the manufacturers for all the preserved products. For the unpreserved products, they connect with the suppliers and local farmers.
How individuals can set up online grocery business in India?
Before getting into it, here are a few grocery business models that you can use to start your grocery eCommerce website.
- You may have a physical store to sell grocery online through eCommerce website
- You may offer a platform for sellers who can list their grocery products and you deliver them
- You may have partnered with local grocery stores and promote their products on your online store
- You may have your website listing various stores across wide location and your online store gives on-demand delivery
Important Things to Know Before Starting a Online Grocery Store
Following are some set of guidelines that will be helpful if you would like to launch a grocery eCommerce store.
Decide the Target Location
This is a major step in starting an online grocery business. Since fruits, vegetables, milk, etc., have a limited shelf life, they can be delivered only to a limited distance. Hence, you have to plan ahead to setup your warehouse or make tie-up with local grocery shops for smooth hassle-free order fulfillment. You should analyse the eating habits and buying patterns of people within your geographical target including the population of households who access internet.
Register your Business
This is a very essential step in their entire process of setting up your online grocery store. Opt for sole proprietorship if you’re an individual or get an LLP registered in case of having partners. Get help from chartered accountants or tax consultants to complete the registration, VAT, Service Tax, GST and other formalities. Later, open a business account in a bank of your choice.
You may either keep your groceries stocked in a warehouse or make a tie-up with local grocery stores who can supply the products on a regular basis. If you’re buying in bulk, ask for volume discounts and negotiate the product rates for wholesale purchases. Alternatively, you can get in touch with sellers who are interested in multi-vendor grocery business model.
Setup a Local Delivery System
For a grocery online shop, the success depends on how fast you can deliver the products to your customer’s doorstep. Most of the customers prefer same day delivery and some groceries have to be delivered as soon as possible to maintain quality standards. Hence, having an efficient delivery system plays a crucial part in online grocery selling business. Initially you have to hire delivery boys with bikes to manage grocery deliveries.
Build an Online Grocery Website
This is the backbone of your whole process and it involves developing a website which serves as the face of your online grocery store. Having a website can save you from power bills, office space rent and staff salaries. Invest some time in refining your ideas and concepts to fit in your online website. Your site should be quick to load, easy-to-use and mobile friendly from a customer perspective.
If your budget permits, you may also incorporate a mobile app for android and iOS users. To get this done, develop your grocery eCommerce website and app from experienced developers in the field like BigZiel.
The best approach is to go with a pre-built technology solution like readymade grocery scripts which allows you to easily manage your web store within your budget.
If you opt for doorstep delivery, the best choice would be cash on delivery (COD) to accept payment from customers. You may also accommodate online payment transactions through internet banking, debit or credit card payments via third party payment gateways.
Create a Marketing Plan
Market your online grocery store using offline methods like advertising in newspapers, hoardings, pamphlets, door to door visits, bulk SMS or online marketing methods like social media ads, search engine marketing, display campaigns, SEO and more.
How to Build an Online Grocery Store with BigZiel?
If you are looking on how to start a grocery eCommerce store, BigZiel is here to help you. Build your online grocery store with BigZiel’s white-label eCommerce software and launch your online shop in less than a week.
Why Choose ZielCommerce?
BigZiel’s ZielCommerce offers turn-key solutions with its grocery eCommerce software to quickly launch your online grocery store. It provides web and mobile application with a huge range of features to offer high-end customer delivery experience.
As an admin of the store, get commission from vendors for every sale made on the website. Multi-vendor grocery store works on commission-based revenue models which helps to accelerate growth of your business and yield maximum profit rates. You can achieve this by doing market research on the most popular products and its demand growth.
Vendors or sellers pay a certain amount of fee to feature their product in the premium places on your e-store. It may include in top results when user search for specific products, list in recommended products during search, featuring on the specific page where user bound to look into the page when he’s searching for some product. The main idea is to offer more visibility for the user to purchase the item.
Earn a fee to list products on your eCommerce store. You may have fixed listing fee for regular vendors for specific items. This is because you can make quality sales when you retain your sellers which forms a cycle. When people gain trust they repeatedly buy from you and so as the sellers who would like to repeat in listing their products with your store.
For vendors who need to take benefit of same day delivery and gain profit with more sales list their products under prime subscription. Vendors must pay an additional fee to make use of this feature. Some top players also offer discounts on products for customers who have enrolled yearly subscription.
Other Revenue Streams
- On-site promotion for grocery sellers
- Start a blog and publish sponsored content
- Hosting banner ads
- Sell useful products like reusable carry bags
- Sell user data to market research companies
You can gain maximum profit by choosing the right revenue model and various streams. Following are some factors which you have to consider:
- Target market
- Size of your business
- Budget, age and popularity of your business
You’ve to research and analyse the above factors against your business goals and requirements before choosing the model that suits you.
Summing it up
Now that you have an idea on how you can start your online grocery store and what are the factors you have to consider before getting started. By launching your online grocery business in India, you are not only offering a convenient online shopping for your neighbourhood, but also earn more money.
At BigZiel Technologies, we have developed ZielCommerce – a readymade grocery eCommerce platform which enables grocery business owners to quickly setup a feature-rich online grocery website and a compelling mobile app for the users on the go.