Online grocery sales grow by 65% in FY20, clock in at over Rs 6,000 crore

KOLKATA | MUMBAI: Online grocery sales by five of the largest e-grocers and brick-and-mortar retailers collectively grew by 65% to Rs 6,820 crore in FY20, while their combined losses widened to over Rs 1,175 crore, according to regulatory filings.
Big Basket, the country’s largest online food and grocery store, accounted for half of the sales. Grofers, DMart, Tata-owned StarQuik and Spencer’s Retail were the other retailers that submitted their filings.

Innovative Retail Concepts, the owner of Big Basket, posted a 43% growth in net sales to Rs 3,418 crore, while net losses widened to Rs 424 crore, according to the filings made to the Registrar of Companies and accessed from business intelligence platform Tofler.

Industry executives said the jump in adoption of online purchases after the Covid-19 outbreak last year gave the biggest push for the fresh and grocery categories and most platforms are likely to report a doubling of sales in FY21 and narrower losses.



“While e-commerce got a natural boost with customers shifting to the platforms during the lockdown and thereafter, leading to investments to enhance capacities, the average order value has gone up too this fiscal, which should benefit them with healthier bottom line,” said Devangshu Dutta, chief executive at Third Eyesight, a retail sector consulting firm.

Grofers said the value of goods sold grew 88% to about Rs 3,000 crore in FY20, while its losses swelled to Rs 637 crore. A company spokesperson said the losses incurred were largely investments to build awareness and strengthen delivery.

According to RedSeer Management Consulting, the pandemic and the entry of Reliance in e-grocery helped the gross merchandise value surge two-fold by the end 2020 from the start of the year. It estimates the size of the e-grocery market will touch $24 billion by 2025, equivalent to 3% of the total grocery opportunity.

In the FMCG segment, Nielsen says e-commerce accounted for 3.1% of the overall market in the country by value, while in the metros, its contribution surged to 8.6% as of the September quarter.

Amongst the big retail chains, DMart’s e-commerce arm reported sales more than doubling to Rs 354 crore in FY20, while losses widened to Rs 79 crore. Fiora Online, which runs StarQuik, posted revenue of Rs 33 crore and a loss of Rs 21 crore.

Omnipresent Retail, the e-commerce arm of Spencer’s Retail, reported sales of Rs 15 crore in FY 20 as compared to Rs 6 crore a year earlier, while losses swelled from Rs 5 crore to Rs 14 crore in the year under review.

Most consumer goods companies said they invested in the online channel over the past few years, which helped them to double the channel’s contribution in 2020.

“Winning in channels of the future like e-commerce were the strategic imperative for us even before the pandemic. With consumer preference for e-everything, there are clear tailwinds for this business,” Sanjiv Mehta, chairman of Hindustan Unilever, said on an earnings call last month. “As consumers get used to assortment and convenience of e-commerce, we believe this will continue to stick.”

Marico MD Saugata Gupta told investors it had been ahead of the curve while investing in e-commerce and as a result, the channel delivered accelerated growth and contributed to about 8% of its overall sales.