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Godrej Nature's Basket, the gourmet food chain of Godrej Group, wants to have a bigger share of the online grocery pie.
After acquiring the grocery portal, Ekstop.com, and revamping its back-end, the retail chain is aiming for increasing its online revenues 10 times over the next one year. So far, it was less than one per cent with its existing website.
The chain will now integrate the team that built the online business from scratch with a few staff from Ekstop. The original team helped with the inputs on navigation and user-interface, though the technology was outsourced. Khattar says that the back-end needed improvement.
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With the technology platform from Ekstop, what will improve straightaway is the ease of placing an order on the site (naturesbasket.co.in). The technology that has come with the acquisition, says Khattar, has armed the retailer with a robust back-end system to track and monitor orders. That is imperative for an efficient delivery to the consumer.
| OLDER STORES TURN IN PROFITS |
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Set up in 2005, Nature’s Basket runs 33 stores. Khattar says the chain opens five to six stores every year and would open around the same number in the next financial year. “We are looking at a growth of 40 per cent this financial year and similar growth next year,” Mohit Khattar, its head, says, Though the chain is yet to be become profitable, stores which are more than three-year-old are profitable, he says, adding that at the Ebitda level, stores will be profitable cumulatively by FY17. |
The management of grocery products, including perishables, would be done according to existing processes that Godrej's modern retail brand has built over the years.
The chain added to its range of products that it put online with fresh snacks, gourmet cheese, cold cuts, fresh party food and gift hampers. Shoppers can also browse recipes from around the world and buy all the ingredients needed for them with a click.
Nature's Basket has already brought down the delivery time for online orders from 48 hours to three hours in Mumbai and Delhi, and is planning to follow suit in Pune, Bengaluru and Hyderabad in the next couple of months.
"Our stores are spread across length and breadth of the cities where we are present. We deliver from our stores," says Mohit Khattar, chief executive and managing director of the chain.
The brand recently partnered with Snapdeal.com to sell some of its range of products to 5,000 cities. The alliance was meant to increase the store brand's reach beyond places it can service.
In the cities where it is not present, Nature's Basket is looking to launch an online marketplace, consisting of third-party vendors for gourmet products, and manage its logistics itself.
"We will launch the marketplace in the next two-three months. We will partner with logistics players for this," says Khatter. He expects the marketplace to contribute 15 to 20 per cent to the company's online business.
Khatter admits that there would be constraints in delivering fresh or chilled products, which are usually perishable, as courier companies are usually not equipped for these.
While Nature's Basket associates itself with gourmet products, Ekstop was a general online grocer. Khattar says this would not create a conflict in image because the former acquired the latter for the platform and not the product, which will anyway get merged with the existing website.
However, retail consultants like Sanjay Badhe, says, "I don't think the targets are easy. Its catchment is restricted to metros, where travel for delivery is difficult."
Badhe also says that the mindset of an online retailer is different from that of an offline retailer. "Online retailers are nimbler, while offline players focus on returns and move accordingly," he adds.
Even in the gourmet space, Nature's Basket has competition online from retailers such as Gourmetco.in, Foodesto.com, Thegourmetbox.in and the one from Future Group's Foodhall.
Prashant Agarwal, joint-managing director of Wazir Advisors retail consultant, says an online retailer's growth depends on how robust the supply chain and distribution network are.
"Despite having a strong store network, Big Bazaar could not do much in online grocery. All depends on how you organise supply chain and create footfalls," he says.
Khattar says that lessons over the last couple of years will serve well.
"Nature's Basket's differentiated assortment and paltform will aid demand, which has grown exponentially last year. Consumers are far more open to online buying than earlier. Hence, what was true and what failed earlier would not be valid anymore," he says.
