PremiumOngoing restrictions in several states—with shops being directed to open only for a few hours and a curb on opening up on non-essential stores in some cities --has led to a greater demand for home deliveries
New Delhi: Over a month after rolling out its two-hour delivery service, hypermarket Big Bazaar said 45% of the retailer’s delivery business is now coming from India’s tier two cities where consumers are sending orders to local stores managers using WhatsApp or logging onto its delivery app or website. Cities such as Bhopal, Mangalore, Lucknow, Ranchi, Kanpur, Ghaziabad, Varanasi have seen orders climb over the last one week.
Ongoing restrictions in several states—with shops being directed to open only for a few hours and a curb on opening up on non-essential stores in some cities --has led to a greater demand for home deliveries.
Premium Premium “I think almost like 40-45% of our business is coming from tier-two cities. And we realized that the need and the importance at this point in time for people to not step out and call for home delivery is very high," said Pawan Sarda, Digital, Marketing & E-commerce, Future Group.
Big Bazaar is Future Group’s flagship hypermarket retail chain. It launched home delivery service even as the beleaguered company waits for its deal with Reliance Industries Ltd to go through. Last August Future’s mounting debts led to its sales to Reliance for Rs24,713 crore.
The deal was, however, challenged in court by Amazon.
Big Bazaar’s 2-hour home delivery service started with Mumbai, Bengaluru and Delhi in April and has now been extended to 150 cities. The chain has more than 400 stores and close to 290 are fulfilling deliveries competing with the likes of Big Basket, Amazon, Milk Basket, Flipkart and Grofers.
Currently, the retailer is fulfilling around 60,000 deliveries per day, aiming to touch 1,00,000 daily deliveries by the end of May. “We want to take every store to around 400-500 deliveries daily. We have a fairly good attach rate of non-food items as well with people buying utensils, home goods, kitchen products etc. In fact, 40-50% of our orders are beyond food and grocery. Our average ticket size right now is around Rs1,400 and it has been more or less consistent," Sarda said.
Big Bazaar stores cumulatively account for 300 million footfalls in a year. Sarda said the intent is to get some of them to shop with the brand online. “Not a lot of people are comfortable with digital technologies, but a lot of people have learnt thanks to our competition. We want to go back to these people and get them back on our online platform as well," he said.
The company said that in the last one year, the cost of customer acquisition and that of delivery has climbed down making deliveries more viable. “Our biggest fear was that beyond the first 100 million customers in India, the online acquisition and delivery costs and issues around cash-on-delivery would make it difficult for people to make money easily. But customer acquisition cost has come down tremendously, because people are forced to shop online. The delivery cost, with the number of players entering the market, has come down too," Sarda said.
In many cities the chain has tied up with delivery partners Grab and Dunzo, apart from its own store managers fulfilling orders.
Aditya Goel, who provides payment, people and technology services to small and large format grocery stores, said that Big Bazaar stores have an advantage since their captive audience will love to order from them. “The tier two customer, a value seeker, will use them. However, acquiring new customers will be hard as they are spoilt for choice in terms of online shopping," he said.
While e-commerce sales peaked last year in the country’s first lockdown, they tapered off in the September quarter, researcher NielsenIQ said in a recent report. However, the current surge in covid-19 cases means more consumers are again buying goods online.
Meanwhile, footfalls in large modern trade stores are down by at least 50-60%, said industry executives, as fresh covid-19 led restrictions prompt shoppers to avoid large stores and instead shop online or at local neighbourhood stores.
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