Keen to experiment in online food and grocery segment
Online grocer Zop Now has secured the e-commerce based home delivery business of Aditya Birla Retail across its 16 ‘More’ hypermarkets in cities such as Bengaluru, Hyderabad and Kolkata.
The Rs.2,500-crore AB Retail, which recently acquired four additional hypermarkets from Jubilant Industries under Total Superstores, is expanding its hypermarket format.
“We are starting experimenting in e-commerce in the food and grocery segment and have appointed Zop Now as our technology partner,” said Pranab Barua, Business Director, Retail & Apparel, Aditya Birla Group.
“With a margin sharing arrangement with hypermarkets, Zop Now is currently the e-commerce partner for 15 stores of HyperCity, promoted by Shoppers Stop.
“Right now, there is high level of interest for online deliveries from hypermarkets. It is an operationally heavy cost for them and most are struggling to get the business model right.
Such tie-ups help generate additional revenues and sales and get profitable faster as we help in customer acquisition and online delivery,” says Mukesh Singh, Founder & CEO, Zop Now.
Technology & logistics
Unlike the rest of the online grocers, Zop Now stays away from owning warehouses, but provides technology and logistics for hypermarkets for their e-commerce operations. “Hypermarkets have limited capabilities in e-commerce and we come in as partners charging 10-15 per cent of the margins.
“There are about 250 hypermarkets and we are in talks with some of them,” added Singh.
Other companies like Pepper Tap and Grocers have been servicing kirana stores mostly for online deliveries, while Zop Now has been catering specifically to the hypermarket formats.
With two hypermarket chains like More and HyperCity as clients, Zop Now claims it has turned profitable in Bengaluru.
“It has been three years since we started and have been profitable in Bengaluru where the company is headquartered.
“It takes usually been 6-12 months for every city to get profitable and by next year, we expect to break even in all five cities that we operate in,” said Singh.
Fund raising
Having valued the business at $50 million (around Rs.320 crore), Zop Now is ready for another round of fund raising.
Since 2012, it has raised two rounds of funds from investors such as Accel Partners, Qual-Comm Ventures and Times Internet.
“We are ready to raise funds from a new set of investors while continuing with our existing investors.
“This year, we will go in for a second round to raise between $20 million to $100 million,” added Singh.
Business Line
