Indian Online Grocery Startups Are Failing – Here Are 7 Major Reasons

Online grocery shopping was imagined to be the next huge thing.


Online Grocery Startups Are Failing

Online grocery shopping was imagined to be the next huge thing for the startup ecosystem. Few years ago, online grocery stores took a major step in the Indian e-commerce industry by going the sophisticated way and boasted about the potential of giving old local markets a run for their money and sustenance.  Unfortunately, the results haven’t quite shown the same. This has led to a slow retraction of startups due to many reasons that have forced them to call it quits on their online businesses.

Indians have been highly open to ‘jugaad’ or hacks. In a market packed with online grocery apps, people happen to download apps only to get their maximum discount on their first purchase by using vouchers and then uninstalling the app. This habit of the Indian consumer has added to this and startups haven’t been able to get by, compelling them to surrender their great dream of the new and happening  – e-grocery.


7 Major Reasons For Failure Of Online Grocery Apps

1. The Typical Indian Customer

Even after huge promotions by retail stores like offering discounts on first purchase and added bonus points to redeem later, this has not resulted in a steady use of their apps. Dejectedly, most customers do use these promotional offers but end up at their regular local markets the very next day due to the fact that they have been shopping there for many years and their loyalty and trust lies with their regular vendors. Though a larger section of the consumer base is tech savvy, they favor their well-known and trusted local grocers than their smartphones.

Solution: Market research; consumer behavior study; culture analysis; habits; paying capacity; demographics; and a strategic approach towards building and designing the app and its features according to the customer in order to appeal consumers.

2. Cost Of Marketing

Promoting a business of any sort is an expensive affair and startups have gone ahead and splurged on it; be it, discounts on first purchase, loyalty discounts and free products to bring in attention. Roping in, actors and celebrities to endorse brands further increase the cost of marketing. These investments have disastrously failed at giving sufficient returns, nailing the coffin for many start-ups.

Solution: Effective division of investment in pre-launch, post-launch and subsequently, quarterly budgets instead of spending the whole bunch in one go. Prioritizing, meeting the expected ROMI and then taking next steps.

3. The Spread Effect

Many cities are not accustomed with the e-commerce culture and virtual grocery shopping isn’t really on their cards because of their habits. People tend to believe it’s a tedious job to book groceries; resulting in failing concepts.

Solution: The app has to be exceptional in terms of usability – easy flow, checkout and smooth display, categories and selecting items. Grocery has a huge range, an app needs to cover it smartly and easily.

4. The Indian Bazaar Scene

Indians have always loved the outdoor system of purchasing, making it more of a social scene. The sight of fresh vegetables and fruits has always tempted us, especially Indian housewives who love to bargain and appreciate the chitchats with local sellers. The e-grocery website hasn’t been able to replace these facets of local bazaars.

Solution: Take the smart way! The fresher, brighter and pixel-perfect stuff you show on your app, the better it is. If you are able to maintain the freshness, the timely deliveries, and the product range, there is a huge scope in conquering the market.

5. Not Enough Stocks And Discounts

Big old players in the market hold the bigger stocks and the best promotional offers, leaving the startups in a lurch; thereby not letting them serve the larger consumer base. Grocery store owners enjoy better margins and benefits.

Solution: Collaborate with the existing monopolies, the big players and the wholesalers. This way, the stocks can be maintained by the respective owners and one just has to work on the app details, technology, marketing, support and deliveries.

6. Training And Customer Service

Training the staff has also posed a big challenge to startups. Customer friendly services, handling the delivery, managing time and cash, is indeed a huge task and most of the online startups haven’t been able to provide efficient training to their staff members and this has led to their downfall.

Solution: Organize your workforce beforehand. The better the delivery, the better the customer satisfaction and popularity. Happy customers are the best promoters. One needs to hire smart people – especially for delivery and support functions.

7. Heavy Apps With Poor Steering

Most apps haven’t been able to satisfy their users that have contributed in the big fall. The right kind of user interface, the ease of shopping and safe payment techniques are factors that play a major role. With a very fickle data in this country, it is important to create an all-inclusive app that startups lack in.

Solution: Build an app which has salient features like easy loading, smart development and design that can help your app sail through the big network problem in the Indian sub-continent. If one has a well-developed app on the right platform and technology, it will be faster and easier to tweak as per the standards and requirements of time and business.

We should remember, whenever a new technology has been cropped up and been developed, the road to mass recognition is not always a smooth one. Given both the potential and drawbacks, it can be promised that online grocery shopping will become as widely accepted as mobile phone technology with the development of smart apps and marketing.

About the Author: This article is contributed by Amit Dua – Founder at ValueAppz and RestroApp.

  1. amit banarjee says

    Typical Indian customer? You know nothing dude. Have you seen the percentage of mobiles and other electronics sold in India compared to other countries. India is a place which is extremely welcoming for online purchase.

    Then whats the problem? There is only one and just one problem here. Bangalore, Mumbai, Delhi and Pune. This is where India ends for the people. There delivery doesn’t even cover 5% of India. In reality ecommerce haven’t even reached 25% of its potential in India. Most city dwellers have no clue about this. Do you know mobile phones and many other electronics are not delivered out side city limits by the major players. The day amazon extends its own logistics to cover atleast 50% of the country and when ecommerce buying is possible in native Indian languages we will start seeing its real potential.

    Dont use the word country and name of the nation for a thing available in 4-5 cites.

  2. Mud says

    …so the dumb fuck buddhas and buddhis will win, eh? Not on MY life! – there’s one simple solution to ALL this, which has to be made clear to India – online is CHEAPER!!! (even after discounting stops, I’m sure). No more marketing needed, full stop.
    And, out of curiosity – where did you get this data, that e-grocers are failing? Didn’t Bigbasket get a ton of funding just the other day?? …and didn’t I read right HERE about Amazon getting into the grocery biz?? Could you please clarify…?

  3. Santokh Saggu says

    7th point about user interface ,Every startup recruits rockstar UX/UI designer.It seems UX and UI designers are over hype.

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