The Indian online grocery market could exceed sales of $3 billion (about Rs 22,500 crore) in 2020, a substantial 76 per cent jump over the previous year, Spencer's Retail Chairman Sanjiv Goenka has said.
The preference for online delivery of products became more visible following the COVID-19 outbreak, he added.
Spencer's Retail, part of the RP-Sanjiv Goenka (RPSG) Group, had acquired online supermarket and grocery store Nature's Basket in July 2019.
Consumers opted to buy essentials and other products from home in a bigger way than they had done in the past, he said.
"The result is that India's online grocery market could exceed $3 billion in sales in 2020, a substantial 76 per cent increase over the previous year, following a demand for the home delivery of fresh produce," Goenka said in his address to shareholders in the company's Annual Report for 2019-20.
With increased access to smartphones and low data costs, shoppers now prefer an omnichannel shopping experience, he added.
Spencer's Retail is attractively positioned to capitalize on the omnichannel opportunity, he said.
"The company did not just respond to this sectoral inflection point with a relevant mobile application and home delivery; it invested in enhancing proximity to consumers through phone call-based delivery, chatbots, and WhatsApp-driven product delivery using its stores as hubs," Goenka said.
Besides, the retail chain said it has collaborated with Uber and other delivery partners for product supply, strengthening its last-mile capability.
According to Spencer's Retail CEO Devendra Chawla, the company's online business experienced a milestone in FY20, where it not only consistently scaled the number of monthly active users but also positively turned around its unit-level economics.
"Our unit-level economics grew 45 per cent with a substantial increase of 125 per cent in our registered customer base. On the overall, the number of orders grew 175 per cent, which helped us significantly moderate delivery costs," he said.
During the COVID-19 pandemic, the company operated 90 per cent of its stores across the country. "We will accelerate our transformation and deepen our relevance," said Goenka.
"We believe that our competitiveness will be derived from omnichannel consumer access, judicious store rollout, distinctive positioning in the minds of our consumers, a balance of lifestyle and essential products, a shift towards non-food and apparel in the product mix."
Headquartered in Kolkata, Spencer's Retail operates 191 stores (including Nature's Basket) of various formats in 42 cities. It posted a revenue of Rs 2,373.29 crore in FY 2019-20.