Grofers: A Case Study of Influencing Factors and Constraints in an E-Commerce Driven Supply Chain
It was windy weather on 15th July 2015 in New Delhi, the Capital of India. Mrs. Sharma arrived home after a very hectic schedule at office. As she entered the hall, she realized that she has forgotten to pick up the grocery required for preparing breakfast the next day. She loathed the very idea of going back to the grocery shop. It simply required a lot of energy and time. It would mean taking her vehicle out from congested parking lot, driving through mad traffic, looking for a parking space, picking up the grocery, making payments and carrying the bagful of grocery and so on. Was it really worth the efforts or should she announce that tomorrow also her husband will have to compromise with breakfast? She looked out of the window and noticed that it started raining. What could she do? Normally, after a busy office schedule, she preferred to freshen up and relax, or perhaps listen to light music.
Mr. Sharma, her husband, had arrived a little earlier than usual. He understood her plight. Mr. Sharma owned a bakery shop. He was working on the idea of partnering with an online delivery service to expand the reach of his business. He had downloaded information from internet about a number of on-demand delivery service providers such as Grofers, Bigbasket, Peppertap and ZopNow. He asked Mrs. Sharma not to worry and try out any one of them. Reluctantly, Mrs. Sharma called up Grofers and placed the order for groceries required by her instructing them to supply the same from her favorite grocery shop.
About an hour later, as they finished their dinner and were having their dessert, the doorbell rang. The delivery boy from Grofers arrived, and delivered the order in full and collected the payment. Mrs. Sharma was relieved and indeed felt very happy!!
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Grofers.com
Grofers is an ‘on-demand drop delivery service’ that connects the consumers with the local stores. As the description suggests, the ‘on-demand drop delivery service’ model essentially means that the customer places the order on mobile/telephone or on the company website through internet, advising the provider of the service to purchase items ordered by him/her from a grocery shop of his/her choice and deliver the same to his/her home at no extra cost, and within a promised time period. To meet the customer’s expectations, the provider of the service needs to organize an efficient supply chain in the area of operations...........
Supply Chain
The supply chain is all about efficient execution of an order. It was imperative that Grofers create a m-commerce platform that would be customers delight when it comes to placing the order. However, the execution must also excel the customer’s expectations.
When the founders visualized a supply chain for Grofers they had three clear priorities in mind. The first was Delivery. They set the benchmark of 90 minutes after considerable debate. Grofers must stay committed to deliver any order within 90 minutes. They believed that assuring delivery within 90 minutes would set industry standard difficult to be achieved by new entrants. The second was Scalability............
Daily Operations
The process starts with a customer placing an order. The core of Grofers’ business is the customer-friendly mobile application. This application allows consumers to transact with third-party stores i.e., the stores listed with the Grofers. The customers could place an order of any number of products from over 1,75,000 products listed on the Grofers website clubbed in nearly 14 categories. Customers have options to build up their cart by clubbing products from different stores and categories............
Technology and Supply Chain
Technology provides major support to Grofers’ Supply Chain. It proves to be an excellent prototype of functioning organization without infrastructure. The success lies in the user friendliness and pervasiveness of the Grofers mobile application among shoppers, packers, delivery boys.............
Competitors
With the increasing number of players in the hyper local market the survival depends on the acceptance by consumers and merchants. India had a total of 110 hyper local startups as of 2015 and the number is continuously growing. According to a study conducted by Ken Research, hyper local market is expected to reach INR2,306 crore by 2020...............
Looking Ahead
Grofers’ founders are looking forward to expand their business in new cities such as Hyderabad and Pune. They are also planning to add new verticals such as electronics, pharmacy and cosmetics to their business. Apart from this, the founders aim to bring offline retailers online so that customers save time by doing most of their shopping online.............
Assignment Questions
I. Define E-supply chain? How is supply chain managed online? What are the advantages and disadvantages of e-supply chain? List all the components and their processes of the e-supply chain. Support the explanation by theories and models. How technology can be used to improve the operation of supply chain? From the case facts, establish a new model for Grofers.
II...........
Exhibits
Exhibit I: Indicative Compensation Model for Delivery Boys
Exhibit II: Flow of Information Within the System for Supplying Orders
Exhibit III: The Macro Processes and Their Sub-Processes
Exhibit IV: Comparison of Various Players in the E-grocery Market
Exhibit V: Revenue per Employee