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AskMe Grocery expands hyper-local business

Doubling the reach of its grocery delivery arm to over 80 cities

Raghu Krishnan  |  Bengaluru 

AskMe Grocery expands hyper-local business amidst industry shakeout

AskMe Group, a consumer focused internet firm focusing on hyper local businesses, is doubling the reach of its grocery delivery arm to more than 80 cities and aims at a five-fold growth in deliveries this financial year. Askme Grocery, which claims to be the largest online grocery player with presence in 38 cities, has built a model by partnering with local grocery chains to source and deliver goods to consumers. The expansion push comes at a time when the hyper local grocery delivery business is getting out of fashion. Last week, PepperTap said it would stop its grocery delivery business as it found it was spending more money for every delivery to customers than it was earning from them.

Larger e-commerce marketplace Flipkart and app-based taxi hailing app Ola have both stopped their hyper-local grocery delivery experiments, while Amazon is going slow on grocery delivery segment beyond Bengaluru. In January, Grofers scaled down its business to nine cities.

AskMe Grocery, Co-Founder, Ankit Jain said: "We don't keep any inventory. As we are quite close to the customer and retailers, our costs for delivery are very low. We don't need to carry five vans and huge warehouses. If you can keep your costs low and are able to bring in efficiency and scale, the business is viable."

Jain and his co-founder Amit Nigam started the online grocery venture as in 2013 focus on the National Capital Region (NCR) before selling majority stake to AskMe Group for $10 million in 2015.

Since then, the firm has focused on national expansion.

AskMe Grocery makes around 20,000 deliveries a day with an average deal size of Rs 1,700 to Rs 2,000 or Rs 3.5 crore to Rs 4 crore a day. It employs 1,000 people.

Jain argues that there are inefficiencies in business models of local kirana stores and hyper markets such as Big Bazaar, which the company is addressing and reaching out to more consumers to buy online. "We are solving the deficiencies of both the models. We are offering the convenience of price, comparison, quality and guaranteed delivery," he said.

AskMe expects more players in the hyper local grocery delivery market to emerge but that would actually help increase awareness of the online model an expand the market.

"The more the merrier. The retail market has depth and huge volumes. I don't think four or five would be enough to serve the market. I don't see competition as a challenge, but as an opportunity. It creates awareness. Most of the people still don't know online grocery exists," Jain added.

First Published: Tue, April 26 2016. 00:16 IST