SoftBank Group-backed online grocer Grofers on Monday said its week-long sale drove customers to purchase goods worth ₹403 crore (Gross Merchandise Value), above the targeted ₹370 crore, despite weak consumer sentiment and a purported slowdown in sales.
The sale, called Grand Orange Bags Days (GOBD) and on from 10-18 August, saw 4.8 crore units sold, with about 2 lakh orders a day.
GMV essentially signifies the value of goods sold in an online marketplace, but does not take into account factors such as product returns and discounts.
Grofers generally sells about ₹240 crore of goods every month, indicating improved interest during the sale season.
A number of fast moving consumer goods (FMCG) majors have posted muted results for April-June, warning about slowing demand. “It’s really hard to tell in our case because the overall platform has grown, so slowdown hasn't really impacted us right now. But, what we have seen in a very limited way is that there is a consumption downgrade. People are buying more budget items than higher price alternatives," said Albinder Dhindsa, co-founder and CEO, Grofers, in a phone interview.
This would also lead consumers to buy more locally manufactured products as well as in-house brands, benefiting Grofers, which often also relies on domestically made goods and small merchants. In the current sale, over 7000 small merchants helped Grofers deliver over 20 lakh orders, Dhindsa said.
This is the second time Grofers ran a large-scale sale on its platform, having piloted the GOBD sale in January this year. During that sale it recorded ₹207 crore in GMV, Mint reported in January.
Grofers, which started out as a hyperlocal grocery delivery player in December 2013, has moved to the inventory model over the last two-three years and has recently turned focus on private labels. However, unlike rival BigBasket, Grofers does not offer fresh produce or same-day deliveries.
Compared with the January sale, it also performed better this time because it had the experience of conducting a large-scale sale. “(During a sale) the challenge is that our technology infrastructure has to hold up. In a normal month, our peak is when customers check out about 4000-5000 items a minute. During sales we hit around 30000 per minute," Dhindsa said.
“We didn’t expect the huge volume in the January sale so we learnt our lesson this time. So we plan for logistics - the promised time for delivery goes up. Normally we deliver in a day, but this time we made the promised time 3-4 days, also because the rains lead to a longer delivery time," Dhindsa said.
Grofers last raised $220 million in capital led by the SoftBank Vision Fund, along with South Korean investment firm KTB Ventures and existing investors Tiger Global and Sequoia Capital.
After the current sale, it is on track to cross ₹600 crore in GMV for August compared with the ₹550 crore it had planned, Grofers said.
