LocalBanya is a niche online convenience store that provides services across Mumbai and Pune. The e-tailer has a rich repository of over 14,000 products, and is gradually looking to grow its network. Based out of Mumbai, this online grocery seller has raised millions of funding through various investors. In an exclusive conversation, Rashi Choudhary, COO & Co-founder, LocalBanya.com shares more prospective on the company’s operations.
How do you see the growth of online grocery market in India?
The online grocery market in India is set to grow in leaps and bounds. It is all set to become the next multi-billion dollar market in the coming 5 years. The benefits for the consumer to adopt this way of shopping are plenty. From the convenience of not having to travel down to crowded supermarkets to browsing a wide array of products from the comfort of your home, it simply makes sense to make purchases online. The industry itself is set to employ a sizeable number of workforce and drive sales for many vendors and brands. The point being an entire eco-system is being put in place for this industry to grow. In the immediate future consumers from most major metros will be able to order online and this will drive adoption overall.
Presently, how many cities are you catering to and how many more cities do you wish to add in future?
We are now in our second city – Pune. This year will be pivotal for brand LocalBanya. After being in operation for close to three years in Mumbai, we feel now is the right time to take our brand to other cities. The experience we have gained so far has put us in a great position to anticipate and plan how to tackle a new city launch and what to expect. The effort that goes into setting up operations is tremendous, and we will only take that leap once we are confident of delivering best in class services. We hope to capture 12 cities by the end of this year. Our brand and mascot have been well received in Mumbai and we are confident people in other cities will accept us just as well.
Grocery is a perishable item and cold chains are pretty expensive in India. How do you plan to optimise the logistics solutions in minimum cost?
To succeed in this business, customers must get quality products every time they order. There simply is no room for error. There cannot be any takers for stale fruits and vegetables. It creates a negative brand perception and will most likely lead to loss in customers. The true benefits are only experienced when an order is delivered to the complete satisfaction of the customer.
To ensure this, we have stringent quality control regimes in place when it comes to perishable and frozen items. All the way from sourcing to delivery, there are several layers of checks that are conducted. Products that fail to pass these stages at any point are simply not sent out on deliveries. This is accomplished by training our personnnel effectively and repeatedly plus implementing logistic innovations to ensure no damage is incurred during transport.
A perennial logistic challenge is delivering all orders on time in a selected time-slot. Given the dynamic nature of traffic, efficient route planning is vital. We have to plot out the best itinerary for each vehicle before making a dispatch and also be prepared to make changes on the go. This is a feat we have been able to achieve through the use of advanced systems that we have built and communication with operations and delivery teams.
How is LocalBanya utilising the funds raised recently? Are you still seeking more funding?
All funds received have to be allocated across vital components of our business. A venture like LocalBanya has many moving parts that require working in unison. Given that we have put expansion on the top of our priority list this year, the efficient usage of funds will take utmost importance. Like any great organisation it starts with people. We always look to hire the best people who will share the same vision as us. We wanted every team member to feel like they are part of our journey and LocalBanya is a place where you can build a career. Technology plays a crucial role at LocalBanya and we will look to build that team so we have the bandwidth to put all the great ideas into action.
Moving beyond this, for each new city launch there are associated costs that have to be met in terms of logistics, warehousing, HR and marketing. We have a roadmap in place that will be followed in terms of utilising the funds we have to achieve these goals.
What was the rationale behind your recent re-branding process?
Our first logo and mascot will always hold a dear spot in our hearts. It served us very well and a lot of people are fond of what we came up with. The three of us had put off a re-brand as we simply were overwhelmed with dealing with our growth and building this brand. Once our expansion plan was set in motion, it became clear the timing for a re-branding exercise was upon us. We had grown to around 300 people and we wanted our team to experience the excitement we felt when we saw our very first logo and mascot. It has been a great motivating tool for us and we feel that we have managed to achieve a great outcome with this process. We are growing and changing as a company. In fact, we strive to be more than just a company that delivers groceries; we want to reach the customer on multiple levels to understand their needs and provide a great shopping experience. The vibrancy of our new logo and mascot brings out this passion we have to service our customers in the best way possible.
Who do you see as your competition in this category?
There are many companies that are trying to make their way into this space. Setting up in a single location may be feasible in the short run but building a big national brand is not an easy task. Like most industries that eventually attain a certain size, consolidation is bound to happen. Consumers will simply stick with the people that give them the best service and experience over time.
While we do keep a watch on what our competitors are doing, we spend most of time thinking about how we can innovate in this space. Innovation leads to brand adoption and coming up with unique and fresh solutions to customer needs is vital. This is an absolute directive we filter down at every level in this organisation. While being better is great, being different holds just as many merits.
Currently, how many orders you are processing daily?
We are currently doing around 850–900 deliveries a day in Mumbai. We ran a test period in Pune over February to sort out any kinks and are now looking to scale up. Our marketing team is constantly looking for ways to induce first-time purchases as well as getting customers to keep ordering. We have a healthy rate of repeat business and through understanding user purchasing data, we have also been able to increase our average order size.
For which category or produce do you receive the maximum orders?
Our grocery and staples category leads the way in terms of sales. Apart from being home essentials, the heavy and bulky nature of these products makes them a natural choice for ordering online. People generally prefer not to carry these basic items from store to home. The pricing and selection we offer does resonate well with our customers and we have seen sales increase month on month over the last year.
What plans do you have for the current financial year?
While we do not give out specific numbers, we are well on our way to meeting our targets for this financial year. The level of effort and commitment from our team over 2014 has been fantastic. It has put us in a great position leading into 2015, and we are looking forward to raising the bar and delivering on the expectations of our customers and stakeholders.
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