SoftBank-backed Grofers' revenue doubles to Rs 177 cr, loss widens by 42%

SoftBank-backed online grocery firm Grofers reported its revenues for the financial year 2019-20 as Rs 177 crore, a 111 per cent jump since the last financial year. The company further reported a net loss of Rs 637 crore during the same fiscal. This is a 42 per cent increase from the last financial year, show regulatory documents sourced from business intelligence platform Tofler. The company’s total expenses for the fiscal were reported as Rs 814 crore.

The firm entered into an advertisement contract with the supplier and agreed to issue share warrants in part settlement of the services received. These share warrants would be considered as a liability worth Rs 142 crore, according to the documents.

Grofers is expecting to touch Rs 10,000 crore in gross merchandise value (GMV) by March as the coronavirus pandemic has accelerated the shift to e-commerce. This is being supported by traction of about five million customers during its recent sale of Grand Orange Bag Days (GOBD).

The Gurugram-based firm, which competes with players such as BigBasket, Swiggy, Flipkart and Amazon has had about 3-4x increase in volumes during its recent sale.

The firm recorded high traction of customers from cities such as Delhi, Ahmedabad, Bengaluru, Chennai and Mumbai. It also witnessed traction of customers from smaller cities and towns including Kanpur, Faridabad, Jaipur and Ghaziabad.

Grofers turned operationally profitable in July 2020 in over 27 cities where it operated then. This was ahead of its December 2020 target, driven by the huge consumer shift to online shopping during the pandemic. Since the lockdown, the company acquired 2.6 million new customers and witnessed 64 per cent, first-time online grocery shoppers. It locked in 20 per cent first time online shoppers.

As per research firm RedSeer Consulting’s estimates, more than 50 per cent of the $570 billion grocery retail space in India is addressable by e-grocery platforms. Of this, value-first households account for a significant 61 per cent portion, with metro and tier 1 markets covering more than 40 per cent of this value-first opportunity.

Riding on the huge and profitable value-first opportunity, the overall e-grocery market is projected to touch  $24 billion GMV (gross merchandise value) by 2025, of which 55 per cent will be contributed by the value-first households, according to RedSeer.