How to Start an Online Grocery Business In India

The online grocery store business is booming in India, thanks in large part to a growing number of people who choose the convenience of using their smartphones to buy their purchases online.

It is also one of the biggest success stories of India's fast-growing e-commerce sector, which will be worth more than $ 100 billion by 2020.

The online grocery market in India operates on a highly competitive platform with multiple players fighting for the $ 900 million pie.

However, according to a report by the consulting firm Praxis Global Alliance, this market is expected to grow to 70{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the TACC to reach $ 7.5 billion in 2022.

It is a growth trend driven mainly by large Pan-American corporate players with deep pockets that include large companies such as Big Bazaar, Grofers and more recently Amazon.

That said, this online business also offers many opportunities for smaller individual players who wish to establish their own online grocery store to serve a more localized customer base.

So how does an individual establish his online supermarket business in India?

Well, in response to this question, we have listed below a complete set of useful guidelines and tips that will be useful if you want to be part of this booming industry.

How to start an online grocery business in India?

start shopping online

1. Identify a target location / audience

This is the first thing you should do to start a supermarket business.

Fruits, vegetables, milk, legumes and other staple foods that are highly perishable products have a limited shelf life and a small delivery radius, if they are to be delivered fresh.

Therefore, you should plan your delivery periphery accordingly, to ensure that the items ordered by your customers can be delivered quickly while maintaining the highest quality standards.

Identifying the eating habits and purchasing patterns of people who stay in this area is also equally important.

It will allow you to identify which items sell faster and detect emerging trends well in advance, which will allow you to store items that move quickly in advance and minimize the possibility of waste.

2. Put your backend in place

Now that you have your location and your potential customers mapped, you may need a warehouse to store the products / products that you will sell online.

Opt for a space located within your territory or as close as possible, to ensure prompt delivery of items to customers who are waiting.

Alternatively, you can identify, initiate a partnership or partnership agreement with reliable suppliers and wholesalers. They can keep you well stocked with the products and items you need regularly.

As you will buy most items in bulk and on a regular basis, you can easily negotiate rates and request a volume discount.

3. Register your business

This is a crucial step in the entire process of creating your own online grocery store.

If you are an individual, you can register your company as a proprietary company or opt for a company registration if you have partners.

You can count on the help of any recognized tax consultant or public accountant to help you complete the registration and the relevant GST procedures.

Once the registration procedures have been completed, you can open a business account at any bank of your choice.

Refer: – 160 Business ideas and how to start a business

4. Set up a delivery system

The success of an online grocery business depends largely on how quickly you can deliver items to your client's home / office.

This makes the configuration of an efficient delivery system a critical factor in the entire startup process.

In India, most customers prefer same-day delivery, even more so in the case of food and grocery items, and any unpleasant delay in this particular segment is generally frowned upon.

However, many times this is not possible solely due to the lack of human resources or the lack of availability of vehicles to transport the goods.

Deliveries also tend to have a great cost to the company, which represents almost 30-40{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of general business expenses.

So what is the best option for you in these circumstances?

If your delivery radius is within 5-8 km of your base of operations, your best option would be to use dealers with your own two-wheelers.

Yes, it is the same model followed by a lot of popular pizza delivery chains as well. It is fast (given the horrible traffic conditions during peak hours), generally reliable and works quite reasonably in terms of costs and fuel costs.

To be successful, an online grocery business has to rely heavily on the efficiency of its home delivery system.

Confirming an order and then not being able to deliver it to the customer on the same day can cause irreparable damage to your online shopping start, so it is better to avoid such pitfalls if you can.

5. Start an online grocery website

Now that you have all the problems related to delivery under control, we come to another crucial link to learn how to start an online grocery business in India.

This involves developing and starting a website, which will be the face of your online grocery business.

To do this, you must first mold your ideas and refine your concepts well enough to fit in a digital format such as an online website.

Having an efficient and functional website can help you save money on multiple fronts, including office rentals, energy bills and staff salaries.

This makes it a beneficial situation for both you and the business owner and your potential client, since you can afford to sell things with lower margins.

Therefore, spend some time to think about it and entrust the development of your grocery website only to an experienced web design and development company.

Be sure to be part of the whole process from the idea of ​​website design, finalizing the content to choosing the best e-commerce template for your grocery website.

From the perspective of customer convenience, in addition to being fast to load, easy to use and mobile friendly, a smart and efficient grocery website can also emphasize several additional features.

Here are some examples:

  • The ability to search for products using generic keywords such as potatoes, mustard powder, cooking oil, milk, etc.
  • Allow customers to filter products in specific parameters such as; Offers, quantity, brand and expiration dates.
  • List the best selling products in all categories according to past trends.
  • It contains relevant and high quality content, such as recipes, for example, and offers loyalty programs, discount coupons and reward points from time to time.
  • Advertise lighting offers and special offers regularly to increase customer retention.

If your budget allows, you can even consider developing a mobile application for Android and Apple devices. Do not forget to give Rs 100 to Rs 200 for the first time to the client.

Just make sure you have an easy-to-use user interface and no clutter, to encourage customers to use it more frequently.

6. Choose a payment method

If you have a reliable home delivery system, the best option for you would be to stick to the COD or the Cash on the Delivery system to accept payments from customers.

Your distributors can collect payment for the items they deliver at the time of delivery. This will also ensure a smooth cash flow for you from the first day of your business.

An additional incentive here is that you will not have to wait for payment as is the case with many payment gateways online / by credit / debit card.

In addition, you can also save on the additional 2.5{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} deducted by them as transaction fees to facilitate payment.

7. Make a marketing plan

While the big players in the online grocery business like Big Basket and Amazon have the budgets to pay for high profile celebrity campaigns on several media fronts, they don't have to take the same route.

Instead, you can choose to market your grocery store online using local channels, which are equally effective as;

  • Put an ad in the local newspaper.
  • Distribute pamphlets.
  • Run a social media campaign.
  • Send bulk SMS.
  • Place fences in prominent locations in your area (if your budget allows).
  • Making visits door to door.
  • Attend society meetings.

Read also: How to make an excellent business plan

Final thought

The accelerated lifestyle of today, exhausting travel and long hours of work are among the key factors responsible for making an increasing number of people decide to buy online.

Online grocery shopping clearly offers a very convenient option for these customers by saving them both the time and physical effort required to buy groceries.

By starting your own online grocery business in India, you can not only offer people in your neighborhood another convenient online shopping option, but you also earn a lot of money and get rich in the process.


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