![](\"..\/images\/spacer.gif\"){kind=spacer}
Mehak \n Sharma, Indiaretailing.com<\/i><\/p>\n Mehak \n Sharma, Indiaretailing.com<\/i><\/p>\n
New \n Delhi , 28 May 2015<\/i><\/p>\n
![](\"..\/images\/hyperlocal.jpg\")
Grocery \n e-tailing — once not an in-favour category with Indian e-tailers \n — is gunning for growth with startups and existing players eyeing \n an online shot. For some though, it’s an exploration of the genesis \n of what really matters in retail.<\/p>\n
Several startups are currently focusing on pulling in the unique \n advantages of neighbourhood pop-and-mom stores into a technology-driven \n delivery model. These are structured around linking kirana stores \n with customers through mobile apps and online portals, creating \n an online marketplace for these stores at a time when traditional \n retailers are finding the online retail model difficult to comprehend.<\/p>\n
Enter the ‘hyperlocal’. The aim is to provide consumers convenient \n access to their favourite kirana stores, and for these stores \n to become more technologically organised.<\/p>\n
"The hyperlocal model is really the culmination of 50-60 \n years of learning," explains Devangshu Dutta, CEO, Third \n Eyesight. "After years of large chains offering fairly standarised \n merchandise mixes to customers across geographies, we are now \n at a stage when startups are aggregating the mom-n-pop experience \n through technology."<\/b><\/p>\n
Last year, e-commerce giant Amazon launched a similar service, \n called KiranaNow, to ensure quicker and faster delivery of everyday-need \n consumer products through neighbourhood kirana stores. Some others, \n including Grofers, LocalBanya and PepperTap, are also working \n on the same format.<\/p>\n
"Our market research showed that consumers in large numbers \n buy a lot of basics from stores in their neighbourhood. But fulfilment \n of a requirement within a timeframe as desired by the customer \n is a gap area in online retail, and we decided to address this \n issue by developing an app to meet this need," says Saurabh \n Singla, a young IIT-graduate, who is also the CEO of Gurgaon-based \n hyperlocal startup, LazyLad.<\/p>\n
Lazy Lad, which started operations in four Indian cities about \n a month ago, is banking on online technology, especially mobile \n applications, to bring smaller brick-and-mortar grocery stores \n under their fold with the objective of expanding and streamlining \n the grocery market in the country.<\/p>\n
Where most startups see a huge potential in this model, some \n grocers are skeptic on the deliverables of the online hyperlocal. \n Manoj Satia, MD, Direrect2u Retail, a Mumbai-based grocery retailer, \n says, "There is no sustainable model by which a grocery e-tailer \n can monitor the deliveries by kirana stores. How will they determine \n if the deliveries are made on time? This could pose the biggest \n challenge in the success of hyperlocal format."<\/p>\n
WHY HYPERLOCAL?<\/b><\/p>\n
The market opportunity for the hyperlocal model in the food and \n grocery business is huge, which is attracting many fresh start \n ups. Groceries account for 65% of the consumer’s wallet spending, \n and if this category takes off online, there could be an upside \n to the growth of e-commerce, which is expected to touch anywhere \n between $48 billion and $60 billion by 2020 from $4.47 billion \n last year, UBS Securities said in a report on e-commerce released \n earlier in April.
\n <\/p>\n
Dutta points out that neighbourhood stores have a clearer \n and sustained understanding of local tastes and shopping preferences, \n which large scale chains — with their centralised systems and \n ‘distance’ from local customers — do not possess. "The hyperlocal \n is really how businesses were run decades ago; albeit in new packaging, \n it is really a back-to-the-basics model."<\/b><\/p>\n
And how sustainable is this model? According to Dutta, the \n growth of new hyperlocal-centric ventures will depend on two factors: \n the robustness and scalability of the technology infrastructure, \n and the success it achieves with both consumers and retailers. \n "If the model is not successful in neighbourhood A — from \n both consumer and seller point of views — it is unlikely to scale \n to somewhere else."<\/b><\/p>\n
Interviews by Sanjay Kumar and Nupur Chakraborty<\/i><\/p>\n