Softbank-backed e-grocery firm Grofers is expecting its gross merchandise value (GMV) to grow four times to around Rs 30,000 crore by 2022 and focusing on private label products to drive overall sales growth, a top company official has said.
According to a PTI report: The company is adding one-two new cities every month to sell groceries and expecting to to expand its services to over 50 cities by June 2021 from 27 at present.
“We have logged US$ 1 billion in GMV (total value of merchandise sold over a period) in the financial year 2020 and we are on the road to double it every year. Our aim is to hit US$ 4 billion (about Rs 30,000 crore) in GMV by 2022,” Saurabh Kumar, Founder, Grofers told PTI.
He said the company is bullish on private label products and investing in them regularly to enhance their share in total sales on Grofers.
“White label or private label products are a significant part of our business. We have seen people spending more on white labels than national brands because they are slightly cheaper. Private labels contribute 40 percent to our sales, we expect them to grow to 60-65 percent in total sales,” Kumar was further quoted by PTI as saying.
The company has set up a laboratory to test the private-label products quality before on-boarding them for sale.
“There are firms that make for established brands. We reach out to them also and invest with them in creating dedicated capacity. Private label products give us 5-10 percent more margin and they are also 30-40 percent cheaper for customers. Our product team works with them to incorporate changes based on customer’s feedback before we sell them under our brand name. At present they contribute around 65 percent to our revenue,” Kumar told PTI.
He said the awareness and customers’ readiness to switch from offline to online is extremely high.
“Last six months, we have built adequate capacities. We are very well positioned to focus on building supply chains. We expect to double our GMV every year for at least next couple of years,” Kumar was quoted by PTI as saying.
He said that the company is in process of hiring 3,000-4,000 people in the supply chain in the next six months.
“We also work with local entrepreneurs which help us in growing business faster,” Kumar told PTI.
Grofers is also looking enter new categories like electrical products, blankets etc, with focus on sales during winters.