Grofers, a Softbank backed online grocery platform, has revised its timeline for IPO from 2022 to end of 2021 thanks to the spike in demand due to the looming COVID19 pandemic. The pandemic has increased the flow of consumers to online grocery platforms for essential items and their monthly groceries. Overall the industry has recorded tremendous demand and Grofers being in the centre is expected to have recorded growth.
With the ongoing COVID-19, an increasing number of people are opting to order online. Online Grocery platforms like Grofers have proved to be convenient in terms of doorstep delivery, quality and hygiene, and robust digital payment system. It helps consumers practice and maintains social distancing.
Albinder Dhindsa, Founder and CEO Grofers, said the company started making an operational profit in January and expects it to turn to cash positive by the end of 2022. He explained that profitability accelerated during the lockdown. Dhindsa said the market sentiments are being observed as he aims to list by the end of 2021. Grofers competes with big players such as Amazon Pantry, BigBasket, JioMart and Flipkart Supermart.
According to Financial Express, the company’s FY19 losses had increased 73.44% year-on-year to Rs 448 crore while its revenues also grew by 135.13%. The report highlighted that revenue from operations was Rs 29.83 crore in FY18 that increased to Rs 70.14 crore. In December, it was valued at around $650 million with funding from SoftBank Vision Fund.
Dhindsa said there had been a 40% growth in basket size vis-a-vis pre-COVID19 level, while there are a 64% first-time online grocery buyers and 15% first-time online shoppers. Experts say that while the demand for online grocery shopping increased during the pandemic, online grocery sales were growing at a much faster rate from way before.
As per SPGlobal, grocers have a lot riding on the fate of grocery e-commerce. It highlighted Kroger, Walmart Inc., Target Corp. and other players having invested billions in automated warehouses, curbside pickup and other order fulfilment options.
