Thursday 2 April 2015 enters Hyderabad en route to pan-India expansion in 2015

Online grocery retailer Localbanya has announced commencement of operations in Hyderabad. After conducting a successful soft launch, services are now available to all consumers. This comes on the back of the e-retailer's recent foray into Pune in February. The company now operates in Mumbai, Pune and Hyderabad, with plans to enter additional markets in the coming months. The firm also recently closed a new round of Series A funding from Shrem strategies earlier in the year to fuel its expansion plan for 2015.

Localbanya has established itself as a leading player in the online grocery segment, having started operations in Mumbai back in 2012. With a registered user base of over 1 lakh customers and close to 1000 deliveries per day, the company has a strong foothold in Mumbai. 

Says Localbanya co-founder Rashi Choudhary, “As part of our expansion plan for 2015, we are very excited to be in Hyderabad. Having three cities under our belt now sets us on our way to taking brand Localbanya to major markets in India. We have spent a lot of time and effort working on this plan and we have managed to execute which is vital. The experience we have garnered since we started in Mumbai has served us very well and we look forward to providing a great shopping experience and service to Hyderabad consumers."

The online grocery segment in India has seen rapid growth in the last few years with many consumers now opting to shopping for their groceries and household needs online. Localbanya currently lists close to 14,000 products on its aisles at any given point of time and was the first to offer innovative solutions such as offering deliveries upto 11:30 pm. The firm sees an average order size of Rs 1400 per order and currently has over 300 people on its payroll. 

The number of online food and grocery retail outlets in India rose to 44 in 2014 from just 14 in 2013 on the back of growing Internet users in the country, according to a USDA report. Online retailers are competing with kirana stores that provide quick (often within an hour) home delivery and credit to neighbourhood consumers. Compared to these stores, online retailers will need to overcome delivery challenges, it said.

According to industry analysts, the Indian online grocery market is set to hit 10 billion USD by 2020, and 50 per cent of that is set to be centered around Mumbai, Bengaluru, Pune, Hyderabad, Chennai, NCR-Delhi and Kolkata, given that these cities account for nearly 60 per cent of the total internet penetration in the country. 

 “Growth in online retail use has been greatest among younger and professional population segments,” the USDA report noted. The number of online grocery retail outlets is expected to rise in future with total Internet users increasing from 120 million to 213 million in the past year as well as a fall in mobile handset prices and a rise in smartphone penetration, it added.

Emphasising the opportunities for continued growth in online grocery retailing, the report said, “Currently, most online retailers limit their distribution to a particular city, but operations may expand quickly if some business models prove successful.”

Endorsing this outlook, consulting firm Technopak also predicts that at least 20 Indian metropolises could be fully covered by e-grocers during 2015.

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