Aaram Shop, an online grocery retail platform, has come out with its second State of Online Grocery Shopping (SOGS) report, which highlights consumers’ buying behaviour while purchasing groceries and daily essentials online. The report is the first in a 4-part series to be released this year by Aaram Shop.
The key aspect of the report is that it is not based on a survey, but rather on actual data on shoppers’ brand purchases over 5 months, captured between October 01, 2011 till February 29, 2012 by Aaram Shop.
The findings of the 2nd SOGS Report: India, have been presented in terms of five broad parameters, namely;
- Who is buying groceries online in India?
- Where are the shoppers located and where do they shop?
- What is being brought online? – Brand, Category & Sub-category Analysis
- Path of Purchase associated with top essential categories
- Other key essential categories
According to the findings of the report, over 75% of buyers are over 24 years of age, with buyers between 18 to 24 years accounting for approximately 24% of purchases, indicating that grocery buying is not a “youth” activity (unlike most other web shopping across other product categories) and is rather restricted to the working professionals and mature family environment (refer to the figure below).
In terms of the number of buyers, males still constitute the majority at over 60% with females accounting for 39% of the total number. While males average Rs. 580 in terms of value of items bought as opposed to Rs. 522 for females, when it comes to numbers, females pick up close-to 8 branded products in their virtual shopping bags as opposed to just over 6 for men.
In terms of geography, Delhi-NCR, Mumbai and Bangalore are among the most active cities, with Chennai, Hyderabad, Kolkata, Pune and Ahmedabad going live in the recent past. The company now operates in 26 cities across 13 states and UT’s in India with over 1900 retail partners.
In terms of order timings, most orders (30%) take place between 6 AM till 12 Noon, with hardly any orders being placed between 12 AM at night and 6 AM in the morning. Over 90% of the orders are for same-day delivery.
In terms of In terms of buying behaviour across the week, there is peak action on Monday, which keeps reducing till Friday before starting to rise again over the weekend. Thus, most buying happens on Monday (16.77%) followed by Sunday (16.57%) and then Saturday (14.99%).
Going by the value of transactions, the top 20 brands make up for over 50% of total value with the split for the top-5 given in the figure below. However, the top 20 brands now make up approximately 10% lesser value as compared to before, indicating a better spread across brands.
Coming to volumes, the top 20 brands make up for just over 37% in volumes, with the split for the top-5 given in the figure below. Again, the share of the top-20 has fallen by close to 9% as compared to earlier.
In terms of category segments, the top 5 categories make up for over 50% of total sales by value as well as volumes, with the split for the top 5 categories by value given in the figure below.
While the share of the top category (Rice,Atta, Lentils & Dals) has fallen from over 21% in 2011 to under 17% now, indicating a rise in demand for other goods, baby & child care products has seen a huge rise, accounting for over 5.46% of total value as opposed to zero sales last time around.
The report follows in the footsteps of their first SOGS report in September 2011, which acted as a guide for FMCG/CPG brands towards finalising their marketing strategies. The company plans to release 4 such reports each year with constant improvements and alterations in its format, depth and methodology.
“Brands are today excited that the neighbourhood retailers that represent most of their business are now getting an online presence. Over the past year we have seen the ‘last mile ecosystem’ for the online grocery segment take shape, where almost nothing existed earlier. Further, brands are investing in marketing because they see value in the last mile connect that AaramShop brings,” said Vijay Singh, CEO of AaramShop.
AaramShop was founded by Vijay Singh who has over 20 years of industry experience working at Taj Hotels, Co-Founder and MD at Sercon India Pvt. Ltd., CEO at Sercon, among others.
“Online grocery sales no longer require a proof of concept! The data analysed, and presented in the report, tells us clearly that consumers are buying online and neighbourhood retailers are selling online,” said Ashutosh Malik, COO & Executive Director, AaramShop. Ashutosh holds a B.Tech in Mechanical Engineering and an MBA from IIM – Calcutta.
AaramShop started bringing retailers on board on the AaramShop platform about 7 months back (after the initial trials with 50 retailers in the NCR). The company enables the neighbourhood retailers (also referred to as “mom & pop stores” or “kirana stores”) to have a web-based storefront to better connect with their existing and potential consumers within their catchment area. The company does not charge the retailers, consumers, or the brand owners for the basic listing or transactions, and does not disrupt the existing distribution models.
According to a Nielsen Company report, published in 2009, four mega trends will fuel the growth online grocery shopping, namely – convenience, Gen Y shoppers approaching grocery buying age, increased internet penetration, and customization of digital platforms that allow online grocers to personalise the shopping experience (refer to the figure below).
Overall, the online grocery retail industry is very small (less than 1% of total grocery sales) in a largely unorganised segment. This establishes a clear opportunity in the category, provided the grocers work to build awareness and establish the value proposition of the model – online shopping saves time and money. The segment is set to play a larger role in the spectrum of online retail, on the back of rising demand from existing consumer as well as the consumers which are getting added every day.
To download the complete report from AaramShop, please visit: http://www.aaramshop.com/reports/sogs/apr2012/Category Ecommerce