Between 2015 and 2019, 17 online grocery retailers were acquired in India. Startups were swallowed by grocery chains, which in turn were scooped up by bigger retailers. Online sales, super-fast delivery and private labels became the weapons for those with ambitions on India’s burgeoning grocery market—estimated to be worth $550 billion, according to retail consultancy Technopak Advisors. And while the bulk of this consists of kirana (mom-and-pop) stores, with the organised grocery business accounting for just $21 billion, the opportunity for organised grocery retailers is still huge.

Through all the recent upheaval in the space, a little-known grocery chain has chugged along. Its stock-in-trade and business model largely unchanged, even as others in the industry have been busy experimenting. But in early May, Namdhari’s Fresh grabbed attention beyond the borders of Bengaluru, the only city it operates in.

The buzz was that e-commerce giant Flipkart was reportedly in talks to acquire the two-decade-old business. According to two Flipkart employees The Ken spoke with, those talks are ongoing and Flipkart has been through Namdhari’s books. They spoke on condition of anonymity since they aren’t authorised to speak with the media.

This news comes barely a year after US-based Walmart, itself a specialist in groceries, bought Flipkart in a $17-billion deal. The target is clear. After selling apparel, mobile phones, furniture and household products online, the next move for Flipkart would be food and grocery. This wouldn’t be its first attempt either. Flipkart had earlier tried and failed to crack the grocery space with a hyperlocal model and even operates an online grocery store—Supermart—that sells non-perishables in five cities.

Flipkart’s renewed sense of urgency, though, comes as it has fallen behind its competitors in the grocery race. While arch rival Amazon India has been tinkering with its consumer-facing and business-to-business grocery offering for a few years now, it made a statement of intent with its purchase of Aditya Birla Group’s More supermarket chain in 2018.

Reliance Industries is meanwhile making further inroads into the grocery space, both through its stores as well as by quietly spreading its many tentacles through its Jio merchant point of sale (M-PoS) devices. Offline, the Future group—already owners of pan-India supermarket chain Big Bazaar and south India-focused Nilgiri’s—snapped up Bengaluru-based Foodworld last year.

The impetus is obvious. The choice of Namdhari’s, however, not so much. In October 2018, ratings agency Crisil revised its outlook on Namdhari’s Fresh and its parent company Namdhari Seeds to “negative” from “stable”. This was on account of “subdued” performance from moderate business levels and a decline in profitability. 

Namdhari Seeds reported total revenues of Rs 243.8 crore ($35 million) for the year ended March 2017, a marginal rise from Rs 242.3 crore ($34.8 million) in the previous year.


Abinaya Vijayaraghavan

Abinaya is a Bengaluru-based writer, covering the sprawling and exciting world of Indian e-commerce. When she is not trying to understand alpha sellers and complex supply chains, she enjoys travelling and playing badminton. Abinaya was previously a reporter at Reuters.

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