Rashi Choudhary, co-founder of Mumbai's first online grocery store Localbanya.com, isn't worried post the market abuzz on Tuesday about Mukesh Ambani's Reliance Retail expanding online grocery retailing under Reliance Fresh Direct in Mumbai.
In fact, the 30-year-old chief operating officer (COO) of Localbanya is busy planning expansion in Mumbai and has forayed into the Pune market over a fortnight ago.
When asked if she feels scared by Reliance Retail given their bandwidth, access to resources and the financial muscle, Choudhary said, “I think it (Reliance Fresh Direct) is only expanding the market by building awareness and confidence about online grocery shopping. I don't see any short-term business impact, though scenario could be different in the long run.”
“In the end it's all good as existing players will come out with new and innovative ways of doing business and keeping existing client base intact while also adding new customers.”
Having forayed in Pune, Localbanya now plans to establish presence in at least half-a-dozen markets by December.
Having forayed in Pune, Localbanya now plans to establish presence in at least half-a-dozen markets by December.
“The launch of our services in Pune, coupled with a fresh round of funding, sets us on our way to the next phase of our vision – taking brand Localbanya to as many Indian households as possible. We have gained a lot of experience in Mumbai and feel this is the right time to expand. If all goes well, we hope to be in 4-5 more metros very shortly,” said Choudhary.
While the online grocery retailer has had a few rounds of (angel and venture) undisclosed funding since inception – the last being in November-December 2014 from Shrem Strategies –the expansion will call for additional funding in the near future. While Choudhary did not divulge the quantum, sources said the company plans to raise between $15 and $20 million in Series B funding within this year.
The planned expansion will also see Localbanya's customer base almost double to around 2 lakh with each metro adding a minimum of 10,000 to 15,000 new customers, and at the same time Mumbai market adding to the existing base of 1 lakh customers. The company also expects its employee strength increase 50% from 300 at present. “A large percentage of new additions will be in the operational area,” said Choudhary.
Launched in 2012, Localbanya operates on an asset-light model, wherein close to 2,000 products sold from its warehouses in Mumbai and Pune and the balance 12,000 products are sourced from various distribution channels on a need-to-procure basis. The company'se-commerce grocery operations in Mumbai today have a customer base of over a lakh and does around 900 deliveries daily. Over the last three years, the average cart value has seen an increase of around 27% and currently stands at Rs 1,400 per order.
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