Grofers: Will the Hyper Local B2C Model Survive?

Code : GOV0065

Case Length : 8 pages

Period : 2014-2016

Organization: Grofers India. Ltd

Year :
2017

Industry : Automobile

Region : -------

Countries : India

Teaching Note: Yes

Structured Assignment :---------------

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FUNDING: Grofers was started in 2013 as a B2B company to act as an intermediary between mandis , shops and customers, ventured into B2C business connecting customers with their local neighbourhood merchants such as grocery shops, fruit and vegetable vendors, bakeries or pharmaceuticals, toy shops, local hypermarkets via apps on Android and iOS. Initially it started operating in New Delhi and slowly expanded to other major cities in India..

OPERATIONS: While organizing its supply chain for local stores as a B2B delivery service, Grofer found in the initial stages that the store-customer link was highly unorganized. Shop owners did not answer calls from customers; often, they did not have what the customers wanted in stock. Realizing that there was a gap with customers’ needs for quick grocery not being addressed, Grofers decided to offer B2C services.

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BUSINESS MODEL:

Any seller could become a part of Grofers by registering on the Grofers Seller Platform (App). Grofers registered only those sellers who had shops located in the delivery permitted pin code/area. Grofers provided its sellers with a dashboard for managing the orders. (Refer to Exhibit II for Seller Platform).

TARGETING THE CUSTOMERS

Gofors divided its customers into different categories based on their age – Millennials (ages 21-34), Generation Z (ages 15-20), Generation X (ages 35-49), Baby Boomers (ages 50-64), and Silent Generation (ages 65+). As per a study, the technologically friendly Generation Z and the Millennials were the largest segment relying on grocery delivery via the technological medium.

COMPLICATIONS & OBSTACLES

Though Grofers expanded rapidly, it faced several complications in its operations. It did not own warehouses and faced a competition from the e-commerce giants and also from neighbourhood mom-and-pop stores. Most of the customers preferred to shop at the neighbourhood stores and wanted to check the products for quality and freshness before buying them. The cost of acquiring customers was also high for Grofers.

EXHIBITS

Exhibit I: Grofers - Acquisition

Exhibit II: Seller Platform


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