At Dailyshopin, A Supermarket Doubles Up as a Warehouse
A former middle manager of an automobile company and his wife have started a venture to simplify grocery shopping for the average person. Their startup, Dailyshopin experiments with the online-offline format – primarily focusing on e-commerce, but sustaining and creating brand value using their offline warehouse.
Who Uses Dailyshopin?
Mohit Lartius and his wife, Jyotsna began the business keeping in mind the average person who shops and stocks up on groceries for their homes.
“Monthly grocery shopping is the basic requirement for all household, usually due to their busy schedules people have to spend hours in Hypermarkets to get their requirements. We are creating a convenience for customers to get their daily needs at their doorstep,” says Mohit Lartius, co-founder at Dailyshopin.
Their Business Plan
What differentiates the over one year old company is its business model. Bangalore-based Dailyshopin uses the “click & brick” format, wherein the company facilitates online shopping while sustaining an open warehouse that also acts as a supermarket for walk-in customers.
Dailyshopin describes their offline store model to be a smaller version of a metro ‘cash & carry’ store. “It is almost a warehouse and no extra staff is required to manage the customer except during billing,” explains Lartius. The founders feel that keeping costs low for rentals and focusing on the logistics of home-delivery will aid in making the business viable.
The e-commerce section of Dailyshopin currently clocks in over 10 orders a day, operating in and around East Bangalore. Their in-store walk-in customers account for over 200 persons. The company manages inventory for the e-commerce portal via their Dailyshopin branded store.
Making the Margin-Operating Cost Equation Work
Most online retailers have traditionally kept away or have a traditionally grocery retailing category due to the investment that it takes. Online grocery retailing gives the lowest margins while taking up high operating costs. What does Dailyshopin have in mind that they feel will change this equation?
The couple bootstrapped Dailyshopin with Rs 70 lakhs and currently have revenues nearing Rs 10/lakhs a month. In its expansion pan-Bangalore and eventually pan-India, Dailyshopin intends to locate its warehouses in “semi-prime”areas at multiple distribution points.
The plan is aimed at cutting down on rental costs while ensuring “decent walk-ins” and generating business without marketing expenses for the online sector. Further, warehouses at multiple points also ensures delivery of online products sooner.
“We are not yet profitable but nearing operational break-even. We have a concept of open warehouse to attain attain better profitability. The business happening at warehouse will take care of the warehousing expenses hence giving us operating cost benefit,” says Lartius.
Dailyshopin also plans on cutting down on traditional marketing expenditure to boost profitability in this low-margin sector of online retailing.
“We would implement institutional sales and door to door sales strategies as a secondary tool to boost the brand name among the masses and convert offline customers to online,” plans Lartius. He says that the open-warehouse/walk-in model will help build brand loyalty for Dailyshopin.
Dailyshopin is not the only player in the grocery e-tailing space. Bangalore-based startup, Zopnow delivers groceries across the city in 3 hours. The Times Group funded company has also invested in warehousing similar to Dailyshopin to hasten deliveries and boost profitability.
Grocery retailer BigBasket also delivers groceries across Bangalore using delivery vans.
Food and grocery retailing takes the largest share of the Indian retailing pie. The retail sector is set to grow anywhere between $750-850 billion by 2015. Food and grocery retailing accounts for a 60% share in this, while apparel takes the majority in organised retailing.