Coronavirus Leads to 30% Drop in Online Travel Bookings, 9% Rise in Grocery Purchase: Razorpay

Razorpay, the leading full-stack financial solutions company, today shared insights about the impact of the Coronavirus (Covid-19) outbreak on digital payments in India. The insights are based on transactions held on the company's platform between February 2020 and now.

Since December 2019 when Covid-19 originated in China's Wuhan city and its severity started to spread across the world, the global financial markets have been on the verge of a massive change - according to the UN Conference on Trade and Development, this outbreak might cost the global economy $1-2 trillion in 2020.

The travel advisories have led to a drastic drop in online travel spending in India. In 2019, according to Statista, the Travel sector contributed the highest to online payments in India with a 40% share. According to Razorpay, the current situation has brought a decline of 30% in online travel bookings, signifying a downturn in the sector's contribution to overall digital payments.

At the same time, as human interactions are reducing, consumer payment habits are changing - overall digital spending saw an increase of about 10% on the Razorpay platform from February to March, owing to this virus outbreak. For the first time ever, Online Grocery Shopping climbed the ladder with a growth of 9%, and Government and Utility Bill Payments grew by 30%, representing precautionary measures that the customers are taking by staying indoors.

Let's take a look at how the pandemic has impacted other aspects of digital payments. Again, these insights are based on transactions held on the Razorpay platform (February 2020 - now):

Customers showed a 10% increase in digital spending between mid February and now

UPI (19.6%), NetBanking (11.5%), and Wallets (10.3%) became the top 3 modes of payments during this plague

As mentioned earlier, the fear of this outbreak brought down the contribution of the Travel sector by 30% and Hospitality sector by 12% (Typically, Travel and Hospitality account for approximately 10% of transactions on Razorpay)

Fear of running out of home essentials made Grocery make its way into the top 3 sectors with a growth of 9%. Mutual Funds saw the highest growth of 33% in this period, and the Government sector followed by a 30% growth

Number of online transactions has increased in Ahmedabad (by 11%), Hyderabad (by 7%) and Pune (by 5%)

Cities which otherwise saw only an upward growth dropped this time - Bangalore (by 3.2%) and Delhi (by 2.6%)

Reacting to the global economic disruption that Covid-19 is creating, Harshil Mathur, CEO, and Co-founder, Razorpay said, "From a macroeconomic perspective, we are seeing an increase in the demand for digital payments across a few sectors - Grocery, e-commerce and utility bills have gone up, given the social isolation. On the flip, people are having to stay indoors and not having enough spending power, this can make the overall consumer spending go down creating a lasting (negative) impact. Nevertheless, we are all prioritising the right things now to ensure that the health of all of us is being taken good care of."

He added, "At times like this, we not only need companies, scientists, clinicians and technicians but also the government to come together and build a cross-industry rapid response team. A partnership like this will not only help protect us from this pandemic, but will also prepare us to respond better and faster to any global health crises that might occur in the future."

While there is hope for a quick recovery and a rapid eradication of the virus, the company urges the world to not give up, and continue to take measures and precautions to ensure the well-being of one and all.

About Razorpay Software Private Limited

Razorpay, the leading full-stack financial services company, helps Indian businesses with comprehensive and innovative solutions built over robust technology to address the entire length and breadth of the payment journey for any business. Established in 2014, the company provides technology payment solutions to over 800,000 businesses.

Founded by alumni of IIT Roorkee, Shashank Kumar and Harshil Mathur, Razorpay is the second Indian company to be a part of Silicon Valley's largest tech accelerator, Y Combinator. Marquee investors such as Tiger Global, Matrix Partners, Y Combinator, Sequoia India, Ribbit Capital and MasterCard have invested a total of $106.5 million through Series A, B and C funding. Around 33 angel investors have invested in Razorpay's mission to simplify payments. Known to be a developer-oriented payment gateway, Razorpay focuses on essentials such as 24x7 support, one-line integration code and superior checkout experiences.

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Milkbasket Raises $2.16 Mn in Follow-on Funding from Innoven Capital

Grocery delivery startup Milkbasket has raised ₹15 crore (~US$2.167 Mn) from venture debt firm Innoven Capital, which is in addition to US$ 10.5 million (around Rs 72.59 crore) the company had raised earlier this month led by Unilever Ventures, with participation from Mayfield India, Kalaari Capital, Blume Ventures and few Indian family offices.

The funding comes within a month after the startup had last raised $10.5 million in its Series B round. Notably, in this month only, Milkbasket's ₹20-crore debt funding deal with Sachin Bansal-led BACQ fell through.

“The fresh investment positions us firmly for continued growth, and we will be investing substantially in geographical expansion, new technological advancements and hiring through the year,” Anant Goel, Co-founder and CEO, Milkbasket said in a statement.

Goel further said “this is a testament to our proven pioneering model and a solid team that is transforming everyday lives of urban households in India”.

In April, Milkbasket had announced a ₹20 crore debt funding deal from Bansal’s BACQ. However, in June, the startup then put out a press statement clarifying that "Milkbasket and (Bansal’s) BACQ have mutually decided not to proceed with the investment that was announced on April 29, 2019."

To date, Milkbasket has raised close to $26 million in equity funding from Mayfield, Beenext, Kalaari Capital, Unilever Ventures, Lenovo Capital (LCIH), Blume Ventures and few family offices.

Milkbasket had last raised $10.5 million in its Series B round this month.

Flipkart to Open Offline Grocery Stores across India

India's largest e-commerce platform owned by US-based Walmart, Flipkart, is planning to open offline a.k.a brick-and-mortar grocery stores across India in order to tap the food retail industry in the country where 100 per cent Foreign Direct Investment (FDI) is allowed, said a Times of India report.

As per Indian FDI norms, foreign investors are not allowed to open retail stores in the country. However, in the food retail business, a foreign investor is allowed to open physical stores.

In India, Flipkart's parent Walmart is allowed only to operate a business-to-business (B2B) wholesale segment in India due to the country's FDI regulations and around 50-60% of Walmart’s global sales come from food and as the retail giant does not want left behind, its strategy of opening offline stores in India falls into Walmart's way of organizing things for its business.

To recall, a Morgan Stanley report released earlier this year had suggested that Walmart could exit Flipkart, as the US retail firm does not see a long-term path to profitability. The new FDI rules for the e-commerce sector came into effect on February 1, this year and post that not just Flipkart's but Amazon's business too got impacted and saw a drop of around 25-35% in sales after having to re-arrange their seller entities where they held an equity stake.

Flipkart entering into the food retail segment is also seen as Walmart’s strategy to boost its cash-and-carry business, where revenue growth has been slow and Food accounts for two-thirds of India’s overall retail market, which is estimated to reach U$1.1 trillion by 2020 from USD 672 billion in 2017.

Amazon, which is global competitor of Walmart, has also committed to investing about $500 million in the food retail business through its food retail arm Amazon Retail India. It has bought a large stake in Aditya Birla Group's food and grocery retail chain and is also in the process of acquiring Kishore Biyani-led Future retail which operates Easy Day and Big Bazaar chain in the country.

Meanwhile, home grown e-grocers, Grofers and Big Basket, have also reportedly gotten government nod to sell locally produced food items and hold inventory of the same.

On the other side, Mukesh Ambani-led Reliance is doing vice-versa (offline-to-online) by launching a new e-commerce platform in India, which will connect brick-and-mortar stores to online channel of Reliance Retail. To be rolled out initially for Gujarat retailers and store-owners, the upcoming e-commerce platform will enrich about 1.2 million small retailers and shopkeepers in Gujarat.

In August last year, a report supposedly said that Alibaba’s chairman Jack Ma had held talks with Mukesh Ambani, in July-2018 in Mumbai and discussed about plan to create a large omnichannel i.e. both online as well offline, retail entity through the proposed JV of RIL and Alibaba.

Among online grocery business, both Grofers and Bigbasket is envisaging omnichannel strategy. Gurgaon-based Grofers has recently raised $200 million in a fresh funding led by SoftBank Vision Fund, pushing the startup’s valuation to almost $1 billion. Prior to that, a month before BigBasket had raised fresh $40 million from CDC Group, the UK government's development finance institution, at a valuation of $1.2 billion, that made it the latest entrant to India's coveted unicorn club of startups.

​Swiggy To Enter Online Grocery, Medicine Delivery Business with Its New Service ‘Dash’

​Nasper-backed online food ordering & delivery startup Swiggy is all set to start delivering medicines and grocery as it looks to diversify its business model and boost volume beyond just food ordering. This new service will be named as 'Dash', reported Economic Times.

Swiggy will kickstart pilot operations of Dash in the next few months.

Citing a person familiar with the development at Swiggy, the report further said that, “While several categories have been discussed, they may start with medicines and then move on to groceries."

Through this diversification, Swiggy is aiming at improving cost optimisation and utilisation of its over-30,000 strong workforce during the lean hours, especially between 2 pm and 6 pm.

As per the report, a Swiggy spokesperson said, “At Swiggy, we’re continuously experimenting with ways in which we can enrich the lives of our consumers and partners by making it more convenient and hassle-free."

However the company did not share any further details of the new initiatives being planned.

Notably, Swiggy is also in middle of negotiations to raise over $200 million from DST Global and hedge fund Coatue Management in a round that will see its valuation cross the $1-billion mark and become a unicorn startup in line with its competitor Zomato.

Food-delivery firms diversifying into other categories, especially in to groceries, to optimize fleet costs is a strategy that has been adopted globally. This week, US-based DoorDash signed a pact with Walmart to provide grocery delivery services to the retailer.

Speaking about online grocery delivery market, according to the Forrester’s the Indian Online Retail Market report, India is the fastest-growing online retail market in the world. As per the report, e-commerce sales in India will reach $64 billion by 2021, growing at a five-year compound annual growth rate (CAGR) of 31.2%.

To recall, last November, it was reported that Reliance Jio, a wholly owned subsidiary of India’s biggest business conglomerate Reliance Industries, is also planning to make entry into India’s online grocery market.

Prior to that, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

Flipkart too has launched its grocery delivery app called Supermart, as a pilot in Bengaluru, in November 2017.

[Top Image - lbb.in]

Its Official, After 27 Months Grofers Raises Fresh $62 Mn Funding from SoftBank, Others

Just over a month after online grocer BigBasket raised $300 million funding from Alibaba, another homegrown online grocer Grofers has finally managed to raise $65 million (~ Rs.400 crore) in a fresh Series E funding round led by Japanese conglomerate SoftBank Group. The funding came after a long wait of 27 months. Grofers last raised $120 million from Softbank at a valuation of about $400 million in November 2015. Prior to that it had raised $10 million from Tiger Global.

Other investors such as Tiger Global and Apoletto Asia also participated in the funding round. With this, the total funding raised by the startup is now $226.5 million.

IndianWeb2 had reported last month that Grofers would raise $65 million to further boost the private label with its entry into segments such as home care.

The fund will be utilised by Grofers to further ramp up its private label products and enhance supply chain. A significant amount of investment will go towards building infrastructure and technology and efficient supply chain management to achieve deeper penetration in existing Grofers cities.

"This fresh round by our existing investors is a vote of confidence and trust in the turnaround at Grofers. We took some hard decisions to fix parts of the business that were not scaling well. Our efforts have clearly contributed in making sure we have a clear path to profitability as well as the largest market share in the online grocery segment; having grown four-fold in the last one year for monthly sales in excess of Rs.100 crore,” Albinder Dhindsa, Co-Founder and CEO, Grofers, said to a business daily.

The above development was first reported in Money Control.

Notably, Grofers runs three private label categories called Savemore, FreshBerry and Best Value. While Savemore is for home care items such as cleaners, soap, phenyl and towels, FreshBerry is for fruits and vegetable and Best Value for staples. The company currently gets about 30 percent of its sales, from its private label brands in the food category including Freshberry and Best Value.

Grofers currently clocks an average of 25,000 orders a day with an average order value of Rs.1400. With its major portion of the business coming from North India, it claims to have turned operationally profitable in Delhi NCR on a per-order basis.

The fresh funding has in fact prevented Grofer from nearly getting shut down its operations a few years ago after scaling down its business significantly. Grofers had earlier reported a whopping loss of Rs 225 crore and a revenue of Rs 14.3 crore in FY-2016 while its biggest competitor BigBasket, operated by Bengaluru-based SuperMarket Grocery Supplies Pvt Ltd., revenue for same financial year had tripled to Rs 563 crore.

Moreover, in last one year, Grofers has explored sale talks with bigger rival BigBasket as well as Paytm, said a Live Mint report, citing a person familiar with the matter.

The Grofers funding will now heat up the already hot online grocery market in India, where investors across the globe especially China and Japan are showing keen interest. According to a report, the online grocery market in India is projected to grow at a CAGR of 55% during 2016 - 2021. Easy availability of a wide product range at one place and improving logistic services offered by companies are anticipated to fuel the country’s online grocery market over the next five years.

According to the Forrester’s the Indian Online Retail Market report, India is the fastest-growing online retail market in the world. As per the report, e-commerce sales in India will reach $64 billion by 2021, growing at a five-year compound annual growth rate (CAGR) of 31.2%.

To recall, last November, it was reported that Reliance Jio, a wholly owned subsidiary of India’s biggest business conglomerate Reliance Industries, is also planning to make entry into India’s online grocery market.

Prior to that, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

Flipkart too has launched its grocery delivery app called Supermart, as a pilot in Bengaluru, in November 2017.

Its Official, After 27 Months Grofers Raises Fresh $62 Mn Funding from SoftBank, Others

Just over a month after online grocer BigBasket raised $300 million funding from Alibaba, another homegrown online grocer Grofers has finally managed to raise $65 million (~ Rs.400 crore) in a fresh Series E funding round led by Japanese conglomerate SoftBank Group. The funding came after a long wait of 27 months. Grofers last raised $120 million from Softbank at a valuation of about $400 million in November 2015. Prior to that it had raised $10 million from Tiger Global.

Other investors such as Tiger Global and Apoletto Asia also participated in the funding round. With this, the total funding raised by the startup is now $226.5 million.

IndianWeb2 had reported last month that Grofers would raise $65 million to further boost the private label with its entry into segments such as home care.

The fund will be utilised by Grofers to further ramp up its private label products and enhance supply chain. A significant amount of investment will go towards building infrastructure and technology and efficient supply chain management to achieve deeper penetration in existing Grofers cities.

"This fresh round by our existing investors is a vote of confidence and trust in the turnaround at Grofers. We took some hard decisions to fix parts of the business that were not scaling well. Our efforts have clearly contributed in making sure we have a clear path to profitability as well as the largest market share in the online grocery segment; having grown four-fold in the last one year for monthly sales in excess of Rs.100 crore,” Albinder Dhindsa, Co-Founder and CEO, Grofers, said to a business daily.

The above development was first reported in Money Control.

Notably, Grofers runs three private label categories called Savemore, FreshBerry and Best Value. While Savemore is for home care items such as cleaners, soap, phenyl and towels, FreshBerry is for fruits and vegetable and Best Value for staples. The company currently gets about 30 percent of its sales, from its private label brands in the food category including Freshberry and Best Value.

Grofers currently clocks an average of 25,000 orders a day with an average order value of Rs.1400. With its major portion of the business coming from North India, it claims to have turned operationally profitable in Delhi NCR on a per-order basis.

The fresh funding has in fact prevented Grofer from nearly getting shut down its operations a few years ago after scaling down its business significantly. Grofers had earlier reported a whopping loss of Rs 225 crore and a revenue of Rs 14.3 crore in FY-2016 while its biggest competitor BigBasket, operated by Bengaluru-based SuperMarket Grocery Supplies Pvt Ltd., revenue for same financial year had tripled to Rs 563 crore.

Moreover, in last one year, Grofers has explored sale talks with bigger rival BigBasket as well as Paytm, said a Live Mint report, citing a person familiar with the matter.

The Grofers funding will now heat up the already hot online grocery market in India, where investors across the globe especially China and Japan are showing keen interest. According to a report, the online grocery market in India is projected to grow at a CAGR of 55% during 2016 - 2021. Easy availability of a wide product range at one place and improving logistic services offered by companies are anticipated to fuel the country’s online grocery market over the next five years.

According to the Forrester’s the Indian Online Retail Market report, India is the fastest-growing online retail market in the world. As per the report, e-commerce sales in India will reach $64 billion by 2021, growing at a five-year compound annual growth rate (CAGR) of 31.2%.

To recall, last November, it was reported that Reliance Jio, a wholly owned subsidiary of India’s biggest business conglomerate Reliance Industries, is also planning to make entry into India’s online grocery market.

Prior to that, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

Flipkart too has launched its grocery delivery app called Supermart, as a pilot in Bengaluru, in November 2017.

Grofers May Raise $65 Mn Via Softbank, Tiger Global At 40% Less Valuation

Gurgaon headquartered online grocery startup Grofers is in talks to raise $60-65 million from existing investors Softbank and Tiger Global. The possible funding round could see the valuation of the Grofers drop by over 40%, reported LiveMint, citing two people aware of the development.

Grofers' early investor Sequoia Capital is not likely to participate in the upcoming round, said the report.

The startup last raised $120 million from Softbank at a valuation of about $400 million in November 2015. Prior to that it had raised $10 million from Tiger Global.

Grofers had earlier reported a whopping loss of Rs 225 crore and a revenue of Rs 14.3 crore in FY-2016 while its biggest competitor BigBasket, operated by Bengaluru-based SuperMarket Grocery Supplies Pvt Ltd. BigBasket’s revenue for same financial year had tripled to Rs 563 crore.

If the said upcoming funding round happen then too it will raise doubts about whether Grofers can survive, at least for the next year or so.

Moreover, in last one year, Grofers has explored sale talks with bigger rival BigBasket as well as Paytm, said the Live Mint report, citing a third person familiar with the matter.

Nevertheless, the proposed funding round, if happens, will give funds hungry Grofers enough money to sustain atleast for couple of years. It is to be noted that since 2016, Grofers had shut its operations in several cities, changed its business model from hyperlocal to inventory-based and had put its focus on winning in Delhi-NCR area where it is headquartered in.

According to market intelligence provider Kalagato, BigBasket held about 35% market share in online groceries, closely followed by Grofers and Amazon at 31.5% and 31.2%, respectively by March 2017.

After experiencing a hard time in 2015-2016, the online grocery market in India was reported to be only $1 billion in sales in 2017. Many hyperlocal grocery delivery startup couldn't sustain the crunch occured since 2015 and then follows a chain-reaction where startups shut down their operations one by one, starting with Sequoia backed Peppertap and then GrocShop, LocalBanya, AskMeBazaar, Lazylad and Genie, among others, also shut down.

Notably, Grofers' biggest rival Bigbasket has recently raised $300 million from Alibaba.

Last November, it was reported that Reliance Jio, a wholly owned subsidiary of India’s biggest business conglomerate Reliance Industries, is also planning to make entry into India’s online grocery market.

Prior to that, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

Flipkart too has launched its grocery delivery app called Supermart, as a pilot in Bengaluru, in November 2017.

Reliance Jio To Enter Online Grocery Market

Online grocery or e-grocery in India seems to be the new hotbed for not just startups but big business houses too as Reliance Jio, a wholly owned subsidiary of India's biggest business conglomerate Reliance Industries, is all set make entry into India's online grocery market, reported Economic Times today.

Reliance Jio, a wholly owned subsidiary of Reliance Industries is all set make entry into India's online grocery market, reported Economic Times today.

Reliance industries chairman Mukesh Ambani reveals the plans to link manufacturers, kirana stores and corner shops to his Reliance Jio customers and mint money.

Reliance is working with corner stores, or ‘kiranas’, and consumer brands to create an operational model that will enable shoppers to buy at neighbourhood shops using digital coupons via its Jio Money platform or text messages, said the report.

Jio will send digital coupon codes for a particular brand’s product to its mobile users, who can use the coupons at neighbourhood stores to buy those brands. Stores enrolled by Jio will be equipped with software on their phones or tablets to read these digital coupons.

According to a report, India’s online grocery market is expected to reach $1 Billion sales mark by the end of 2017.

Few weeks ago, Indian e-commerce giant Flipkart had re-entered the online grocery business Flipkart had re-entered the online grocery business with the name Supermart as a mobile application. The service is offered initially to a segment of customers in Bengaluru .

Later this month, Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, also announced its plans to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

Amazon too had already got the Indian government’s approval to retail food products in India, which potentially allows the e-commerce giant to create a full-fledged food retail business and sell food products through its wholly-owned unit in India.

Food Brand 'Fortune' To Enter Online Grocery Sales Business With Its App 'Fortune Online'

Within few days of launching of Flipkart's online grocery service 'Supermart', which is e-commerce major's second attempt into online grocery business, Another player -- Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, is all set to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.

To build an app and online portal for same, the company has hired Ahmedabad based startup Infibeam.

Infibeam will be responsible for developing and maintaining the online and mobile platform and providing logistical support.

"Fortune Online will be an exclusive B2C (business to consumer) commerce platform which will enable customers to select and purchase of Fortune brand products by using this application for delivery at homes,” Infibeam said in a statement.

The move will make it the first big food and FMCG brand to try to build a strong and direct channel to consumers.

According a report, India’s online grocery market is expected to reach $1 Billion sales mark by the end of 2017.

Others FMCG brands like Hindustan Unilever and ITC have focused on offline retail byserving their lakhs of retail partners across the country. Their products, however, are available at only grocery portals such as Grofers.

The above development was first reported in Ultra News.

India's Online Grocery Market To Reach $1 Billion Sales Mark In 2017

After experiencing a hard time last year, the online grocery market in India is on track to reach USD1 billion in sales in 2017. This will be driven by a strong growth in transactions and steady growth in average order value (AOV), according to a RedSeer Consulting report.

The online grocery or e-FMCG market is expected to see a 60% year-on-year growth likely by the end of the year. While the annual gross merchandising value (GMV) or sales was $600 million in 2016, it will now grow to $960 million in 2017, close to the $1 billion mark.

The annual transactions of online grocery players have increased by 30-35%, from 35 million in 2016 to 46 million in 2017.

[caption id="attachment_121901" align="aligncenter" width="540"] Source: RedSeer Consulting[/caption]

While the average order value has grown by 20% in a year from $17 in 2016 to $21 to 2017.

'Sales have been driven largely by volume growth -- which points to growing acceptance and penetration of online grocery amongst consumers," said the report.

More the 50% respondents said they started ordering grocery products online after demonetization and another 25% said they would like to start soon, according to survey carried out by discounts and coupon site, CashKaro's survey.

Another study by Kalagato, an India focused data analytics firm, said that people are ordering more at a time. Between January and May, the average order value rose 33% year-on-year to Rs 1,024.4, said the study. The online F&G delivery market alone is estimated to be around $600 million in India and is pegged to touch $5 billion by 2020 at a CAGR of 72%. This market has been largely dominated by three key players Amazon, BigBasket and Grofers [Read More Here].

While the market has been tough for the food delivery start-up market, the grocery delivery startups have seen an upswing in investment from venture capitalists (VCs).

Even as deal activity in the food delivery sector as a whole continues its downward trajectory, grocery delivery startups continue to pull ahead of meal delivery startups in both deals and dollars. Grocery delivery start-ups have raised almost $600 million more than food delivery startups so far in 2017, according to a CB Insights report.

Grocery delivery startups have raised globally have raised $713 million in 2017 till date from 36 deals. It is expected to grow to $2 billion by the end of the year from 106 deals.

This comes after a tough year in the grocery delivery environment had resulted in many startups such as PepperTap, LocalBanya, AskMeBazaar, Lazylad among others shutting down and others struggling.

The development was first reported in ZeeBiz.