A SoftBank company, Grofers is the second largest hyperlocal, grocery startup in India. It crushed competition like PepperTap with the sheer amount of capital it raised. $165 million plus. Back in the day, Grofers inspired competition in the likes of Ola and Flipkart to launch their own version of grocery services. And then, arguably, beat them as well.
It has investors, which would be the envy of every startup in the world. But Grofers doesn’t have the market share and is holding on to that coveted second spot by its fingernails.
Grofers India Pvt Ltd
Name as per MCA records
What has Grofers been up to, the last year?
It was the year of the pivot. Grofers switched from a marketplace to an inventory-led model. It made deals with distributors for FMCG products and wholesalers for produce. It even launched its own in-house brand called Freshbury. The company also opened warehouses and distribution centres. All in the hope of propping up its balance sheet. But it has struggled to hold on to its market share while BigBasket has raced ahead. Add to that; entry of Amazon. The American company is tying up with the same suppliers as Grofers. Meanwhile, Grofers’ B2B business hasn’t taken off either. It quietly applied for an offline retail license. That experiment is still on the slow burner.
FY16 was Grofer’s first full year of operations. So there is no FY15 to compare with. The best comparison for a company if not with itself is with its closest competitor: BigBasket. It also transferred its business from Locodel Private Limited to Grofers, and some of its income and expenses are accounted for under that head.
Rs 8 crore: Operational revenue for Grofers. Rs 563.2 crore is what BigBasket made in the same time period. It isn’t unfair to compare them anymore as Grofers pivoted to a model that mirrors BigBasket
Rs 53.53 crore: Salaries paid to employees by Grofers in FY16. BigBasket, for a much bigger operation, paid Rs 91.2 crore.
Rs 48.40 crore: Spent on advertising by Grofers. The ads briefly spurred demand. It prompted Grofers to start operations and then shut them down after the demand fizzled out.
Rs 9.32 crore: What Grofers spent on discounts according to the balance sheet.
Rs 239 crore: Grofers’ total expenses. Rs 841 crore BigBasket’s total expenses.
Rs 225 crore: Loss on Grofers’ books. Rs 277.5 crore loss on BigBasket’s books.