Put off by snarled city traffic and a shortage of parking, more Indians are shopping for groceries online, helping e-tailers like Bigbasket.com and Localbanya.com turn in profits while supermarkets are struggling.
The online grocers benefit from low overheads, as they store goods in warehouses outside big cities where commercial rents are sky-high. Some like Bigbasket.com can also charge more for certain items than traditional supermarkets, which means even more profits in a country where all food retailers enjoy margins as high as 20 percent on rice and other staples.
Bigbasket.com director Ganesh Krishnan said the company would turn a profit this year, just three years after it was set up. By contrast, analysts say supermarkets like More, owned by the Aditya Birla Group, and Reliance Industries Ltd's Reliance Fresh are struggling to attract enough customers to make a profit as they compete with the small neighbourhood stores where most people buy food. Both conglomerates declined to give figures for their supermarket operations.
"You can go shop at a Walmart or Tesco in the U.S. and U.K. and they have parking. You can take the shopping carts right up to your car, so it's smooth," Krishnan told Reuters. "In India, none of this exists."