Tata Group is all set to the enter the online grocery business. For this, the company is buying Gurgaon-based GrocerMax — with its entire management team and technology infrastructure.
Post acquisition, GrocerMax will shut down its business in Gurgaon because the Tata group’s grocery business is currently not present in North India.
GrocerMax was founded by Gaurav Juneja and K Radhakrishnan about two years ago. It is a hybrid platform for grocery that keeps only 10% inventory, sourcing the rest from supermarkets and provisional stores in real time.
Tata Group is planning to enter the online grocery business as consumers are increasingly placing orders for their supplies over the internet. The new team will help set up the online platform for Trent Hypermarket.
Trent Hypermarket is a joint venture between Tata Group and British retailer Tesco. It aims to rival Amazon India, which has also entered the market; and Bigbasket in this rapidly growing segment.
The Tata group is running three formats under the Star banner — Dailies, Market and Hyper. With such offerings, it has around 42 stores across the nation.
The opportunity for such business in the Indian market is attractive for any placer — local or foreign. In the $500-billion retail market, almost 50% of the overall retail basket in India accounts for food and grocery. Although general merchandise, personal and home products fill up a bulk of the profit pool.
Globally, the grocery market is seeing many deals, and is set to change with the use of technology. Earlier this month, Amazon said it was acquiring US brick-and-mortar grocer Whole Foods, highlighting the hybrid omnichannel future of retailing.
Amazon’s proposal to enter food retailing in India is set to get final approval next month. There is speculation that Amazon could also look at a brick-and-mortar buyout. It is reported to be in exclusive talks to acquire online grocery firm Bigbasket.
Online food and grocery penetration is still less than 1 percent. Morgan Stanley report says that the food and grocery segment will become the fastest-growing segment, expanding at a compounded annual growth rate of 141% by 2020.