Ecommerce.....

Spencer’s Retail acquires ecommerce startup MeraGrocer

 

 

Hypermarket chain Spencer's Retail has acquired ecommerce startup meragrocer.com to foray into online sales, signalling consolidation in India's retail landscape and mirroring a trend in developed markets where vendors offer products through various channels. The gross merchandise value of MeraGrocer is about Rs 5 crore, which will be scaled up to Rs 500 crore over the next five years, said Shashwat Goenka, head (retail) at RP-Sanjiv Goenka Group

MeraGrocer, which started operations a year ago with 20 employees, has a presence in New Delhi and Gurgaon.

The venture was floated by three entrepreneurs with experience in retailing - Saurabh Chadha, Manoj Kumar and Dinesh Paul - who had been trying to raise funds over the past months. Almost half of the equity was owned by the promoters in MeraGrocer's holding company, Omnipresent Retail India, while the remainder was held by a group of investors.

Spencer's has acquired full ownership and will convert Omnipresent Retail India into a subsidiary. Goenka said the acquisition will also accelerate Spencer's breakeven, with losses already narrowing to Rs2 crore a month as of the July-September quarter from Rs9.5 crore a month five years ago.
Spencer's operates 122 stores over 15 lakh square feet and is opening 10 hypermarkets this financial year.

Ecommerce, which accounts for about 1% of the Indian grocery market, is growing rapidly with youngsters opting to buy fruits, vegetables, staples, home products and even fresh produce online. Organised retail itself is only 8% of the total market.

The grocery e-tailing segment is consolidating with store chains including Reliance Retail and Future Group venturing into this space and online entities such as Localbanya suspending operations due to paucity of funds.

Goenka said MeraGrocer will not offer any massive discounting and its deals will be similar to those available in local Spencer's stores. The company is also open to sell through online marketplaces such as Amazon and Flipkart, he said. "We don't expect it will cannibalize our store sales since consumers typically visit a hypermarket once a week and rest of the purchases through the week are done through local stores, which we want to tap through ecommerce."