Dessence Consulting has focussed interest in the Indian Organised Retail Market. We have also advised extensively on e-commerce. Download from http://www.dessenceconsulting.com/download28.html This presentation is an outcome of our Tracking the E-Groceries space in India with a view to understanding the 1. Various business models in place 2. Logistic challenges 3. Payment Methods 4. "Discount" mentality on the Internet 5. Barriers and constraints 6. “Vow “offerings 7. Store brand opportunities 8. Niche-organic, Gourmet, Ethnic, Global and Wellness propositions The Indian E-commerce Market has reached a 9 Bio USD size, yet no big player has emerged in the e-grocery space. Private Equity Investors and Venture Funds have viewed the domain with scepticism and very few ventures have got funded. Groceries dominate the Indian Retail Scenario. Has the time come to go Online?

1. E- Grocery Market In India

2. India is 6th Largest Grocery Market in the World
Total Retail Market $470bn 2011 Indian Retail Sector – Quick Facts
Organized Retail penetration 5-8 %
70%
Food & Grocery No. UnorganizedKiranas
Un-Organized Retail 12 mn
Market 94% Shops
Market ($443bn) Growth rate of Retail Market 15-20%
30%
Rest Growth rate of Online Retail
35%
Organized Retail Market
6%
Market ( $27bn)
Size of Food & Grocery Market in USD
Billion
482
302
236
16% Food $4.32bn
& Grocery 2006 2010 2020
Source: IGD Research & Estimates 2
Marketing White Book 2011-12

3. Indian Organized Retail and Grocery Sales are growing at 18.4%
Share of Categories in organised Retail Grocery Sales Growth Across
Countries (2010) in %
F&G
18.4
Footwear
12.4
Furnishing 11.1 10
Furniture
Pharmacy
3 2
9.2% 0
16.3% Home Improvement
9.2%
2.0%
Books And Music
6.1%
3.1% Jewellery and Source :India Retail Forum,2010
19.4% 3.1% Watches
6.1% Nonstore
Restaurant
7.1% 1.0%
8.2%
7.1%
2.0% Apparel
Entertainment
Misc Products
Marketing White Book 2011-12
CDIT
3

4. Different Modern Store Formats in India
Hyper Markets
Shopping Malls
Departmental Stores
Super Markets
Modern Formats Online Web Stores
Share of Spends Traditional Modern
Purchase of..
Format Store Format Store
10%
Traditional Staples, Packed Food Items and
Format other non-food 96% 15%
Modern Format Household products
90%
Perishables-Milk Eggs, Bread,
99% 6%
Vegetables, Fruits
Source: D’Essence Research 4

5. Growth Drivers for e- Grocery Market in India
• Growing Younger Population
• Growing Internet Usage / Online Shoppers
Demand • Rising Disposable Income
• Increasing Affluence Levels
• Quality /Organic Products
• Customer Driven And not Investment Driven
• Growing e-Commerce Market in India
• Multiple Channel Distribution
• Flexible Delivery Options
Supply
• Presence of Major Players
• Convenience
• Increasing supply of Packaged Grains and food products
• Multiple Mode of Payments like Credit Cards, Debit Cards,
Net Banking, Mobile Payments like Airtel Money,
Mosambee (Swipe Credit & Debit Card on Mobile)
5

6. The Hybrid Model
Dairy Meat Bakeries Breweries Others
B2B
Wholesale/
Imports
Locality
Level
Cross Docking
Terminals
City-City Level
LDC Stores B2C
Pan-India
Individual Households
6

7. Business Models of e-Grocery currently in practice
Importer
(Wholesaler)
CDT
Central
Distribution CDT LDC 1 LDC 2 LDC 3 LC D LCD LCD
Terminal
Local
LDC Distribution
Terminal
The Operation Model Can Be Divided In Two Approaches:
1. Stock It Yourself –Limited Warehouses To Fulfill The Orders.
2. Outsourcing Warehouse Model-using Logistics Specialists Which Do The Work Of Stockpiling And Shipping Web
Stores.
Manufacturer Importer Customer Wholesaler
Wholesaler
7 7

8. Key Indian e-Grocery Players focused on Metro Markets
Minimum
Business
Key Players Location Delivery Slots Order for Free Funded
Model
Delivery
Aaramshop.com All India Aggregator 24*7 Rs.500 Yes
Processed within 1-3
Farm2Kitchen.com Delhi Own Supply chain Rs. 500 No
days
48 Hr Delivery & 24*7 No Minimum
MyGrahak.com Delhi –NCR Own Supply Chain No
Support Order
Callandorder.com Mumbai Own Supply chain Next Day Rs 500 No
Specific Localities & 10am to 7pm & No
FreshnDaily.com Mumbai Rs. 150 No
Self Delivery Delivery on Sunday
Specific Localities &
Shopveg.in Mumbai Same & Next Day Rs. 200 No
Self Delivery
Atmydoorsteps.com Bangalore Own Supply Chain Same & Next Day Rs 500 No
BigBasket.com Bangalore Own Supply Chain Same & Next Day Rs.1000 Yes
Zopnow.com Bangalore Own Supply Chain Everyday Delivery Rs.500 No
3pm-9pm, Next
VeggiBazaar.com Chennai Own Supply Chain Rs. 150 No
8
Business day

9. Product Portfolio Of Key e-Grocery Players In India
Fruit& Conf Dairy Organi Beverag
Grocer Non- Pet Home Personal Toiletr
Key Players Vegetab ectio products, c es &
y Veg food care Care ies
les nary Eggs food snacks
Aaramshop √ √ √ √ NA NA √ NA √ √ √
Farm2kitchen √
MyGrahak √ √ √ √ √ NA √ √ √ √ √
Callandorder √ √ √ √ NA NA √ √ √ √
Freshndaily √ √ √ √ √ NA √ NA NA NA NA
Shopveg √ √ √ √ NA NA √ NA NA NA NA
Atmydoorsteps √ √ √ √ √ √ √ √ √ NA NA
BigBaskets √ √ √ √ NA √ √ NA √ NA NA
Zopnow √ √ √ √ √ NA √ NA √ √ NA
Veggibazaar √ √ √ √ √ NA √ NA NA NA 9 NA

10. International e-Grocery Players
United States Of America
• Amazon.com
• Americagrocer.com
• AULSuperstore.com
• Netgrocer.com
• ShopfoodEX.com
United Kingdom
• Tesco.com
• Ucado.com
• Waitrose.com
• Foodfullstop.com
Canada
• E-Z Grocer.com
• Canadagrocer.ca
• Grocerygateway.com
• Onlinegrocer.ca
• Telegrocer.com
Singapore
• Singaporegrocerystore.com
• Egrocy.com
• Yumtrade.com
10

11. Whose buying Grocery Online?
85% of Online Shoppers are between age
of 22 to 45
Female Male
63% 37% 53 61
24 32
11 11 3 5
Reasons For Purchasing Groceries Barriers to Purchasing Groceries Online
Online
65
38 37
35
32 30 30
28 40 38
25 32 31
22 20 20 22 20 18 15
15
11
Source: SOGS,india

12. What Motivates Shoppers to Buy Grocery Online?
Stated Critical Needs The Commitment Drivers
• Polite, Courteous Store Staff • Aware what a regular customer
• Availability of store Staff wants
The Traditional
Format • Credit Available • Personalized Services
Shopper • Fresh, Quality Services • Return /Exchange Policy
• Reasonability Prices • Less Impulsive buying
• Trust Level • Stick to budget policy
• Polite, Courteous Store Staff
• Modern Shopping Experience
• Fresh High Quality Stocks
The Modern • Availability of Latest Products, • Discount
Format Shopper brands Coupons/Promotions/Freebies
• Larger shelf display
• Increasing Affluent levels
• Bulk buying
• Use of Credit facilities
• Convenience Shopping
The Online • Better way of spending
Shopper • Already a Online shopper
• Easy and convenient
• Grabbing Bargain deals
• Delivery at stated timings
12

13. Key Challenges in the Operating e-Grocery Model
Key
Challenges
Solid supply
Chain Management
Source: Booz and Company Analysis 13

14. Do Investors Think investing in E-grocery is a Good Deal?
• E-Grocery companies in India have early-start up advantage.
• Largely predictable business cycle helps ,even the conservative investors
find the business appealing.
• New players coming up with specialty models (like farm2kitchen.com –
organised food and organised Products ) which is appealing to customers.
• Low Costs and logistics costs is still concern for many.
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15. D’Essence Consulting Services
D’Essence Consulting is a Management Consulting, Business Strategy and M&A
Advisory firm
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Competitive Advisory
Services
• Market Entry & Growth Strategy
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Network
chandni@dessenceconsulting.com
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15
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