Last year, the entire country went into panic mode buying groceries to stock up for the lockdown. When stores pulled down shutters, they downloaded several online grocery business apps for their daily needs. If you wish to sell groceries online, it might not just be a great business idea, it might even be a necessity.
The term ‘essential items’ is now familiar to Indian buyers. Daily items like milk, bread, eggs, baby food are available on several apps like Swiggy Instamart, Dunzo, Big Basket, Grofers and more. As of 2020, the Indian online grocery market is valued at $ 3 billion and is expected to grow by 30% in the next 5-6 years.
In this guide, you will learn how to start an online grocery store in India and create a successful eCommerce business.
What groceries are people looking to buy online?
Indian buyer behaviour fluctuates depending on what is the need of the hour. Essential items Indians shop for online include breakfast foods and cooking essentials, as highlighted by this report.
When you sell groceries online, you need to keep enough stock of items for customers. So, it helps to know what essential items your customers buy.
Fun fact: Did you know that the most popular online grocery segment in urban India is dry foods? The dry foods category as a whole contributes 34.7% to the total food market in India. And, the popular category includes cereals, grains, and related products; grams and their products; pulses and their products; sugar in all forms; edible oils; and dry fruits. This is followed by Milk and dairy and then, spices!
Top categories under grocery stores:
- Dry Foods – Cereals, oils, pulses, sugar
- Dairy and staples – Milk, cheese, curd, ghee
- Frozen Foods – Fries, vegetables, individual meals, ice cream, other desserts
- Meat – Poultry, seafood, pork
- Produce – fruits, vegetables
- Cleaners – all-purpose, laundry detergent, dishwashing liquid/detergent
- Paper Goods – paper towels, toilet paper, aluminum foil, sandwich bags
What is an online grocery store?
Everyone knows Big Basket, Grofers, and Super Daily as big players in the online grocery market. On these platforms, you can sell anything that you would find in an offline supermarket or hypermarket. Only here, you also need to set up delivery, payments, and a website or online store.
Here is an example of a basic online grocery business model:
What to know before setting up your online grocery store
Create your business plan for your online grocery store: What is your niche? How many products do you wish to sell? The image above is a simple reference to a basic grocery model, but you can always create your own. Also, check out these business plan templates to help you get started.
Source of your products:
Are you looking to grow your own products or do you wish to work with suppliers and vendors in different departments and source the products instead?
Grocery stores sell highly perishable items, so it is important to keep a tab of expiry dates, manufacturing dates, and quality checks.
Set up an account with grocery wholesalers in your area. You can also sell only one type of grocery – vegetables/ organic produce or just dry fruits. Find your niche and sell the products online.
Read this blog to know more about how to sell organic products online.
Selling grocery online:
Register your business online and ensure you adhere to any legal compliance required. Speak with legal experts and obtain a food license (an FSSAI License). At Instamojo, we have tie-ups with partners like LegalWiz & Vakilsearch that can help with fast license registration for your grocery business. Also, Instamojo businesses get discounts on services like these.
Identifying your audience
Who do you want to sell your groceries to? Everyone needs groceries, but if you have a niche, who is your target audience?
For example – Madras Soapery, an Instamojo premium online store sells personal care products. Their products’ key motive is to encourage people to buy local, handmade products that are mild on the skin and eco-friendly. Madras Soapery’s target audience will be homemakers, eco-conscious consumers, and anyone who has pets/babies at home. You can tell, simply from browsing through their online store here.
What helps you identify the right audience for your brand?
- Google Forms – Use this to send emails to your first 50-100 customers to get feedback and filter out your ideal customer base. Here’s how you can use forms to analyse customer behaviour and collect leads.
- Social media – Does a tier 3 town have little to no access to groceries in the pandemic? Reach out to them via social media and ask them what they need. And, a lot of brands were born out of urgency or lack of resources in the existing territories. Here’s a complete guide to help you locate your ideal audience using social media. Conduct polls to figure out your audiences needs and wants. For example, we conducted a poll across our social media and found out that a large number of customers faced a huge challenge finding high quality products on grocery apps.
- Buyer behaviour analysis – If you sell perishable goods like eggs, milk, bread – you need to find customers in your area that frequently order such items and stack accordingly. This guide will help you understand inventory management when you set up a grocery business.
How to register your online grocery business
Before setting up your online store, register your business online, and while doing so, obtain all the required certification, licenses, and legal documents. Once the business gets going, register your business with VAT, GST, and other tax registration requirements.
Obtain an FSSAI license: This license ensures your groceries adhere to hygiene and safety standards. The Food Standards and Safety Authority of India (FSSAI) is a supreme authority responsible for regulating and supervising food safety. So, it is mandatory to take a basic registration, according to law. Check out this entire guide to register for the license here.
How to start your online grocery store
Once you have set up an account with suppliers, invested in storage space, registered your business – you need to set up an online store or website. Having your own eCommerce website makes collecting orders so much easier. And, nowadays, getting your own online store is not going to be a difficult task!
It will only take you a few minutes to register for a free online store (no credit card required). Visit Instamojo to get started.
Your grocery store will need these basics:
1. A brand logo and theme: You can design a simple logo to sell groceries online. Also, you can choose a theme from our premium online store. The Instamojo premium online store offers 20+ custom themes to choose from. In case you want to start simple, sign up and choose the free online store plan and upgrade once you start getting a lot of orders.
For example – Maaticha, a beautiful premium store on Instamojo, makes use of an elegant and simple theme from our store to feature their products (honey) on their main page. Check out their store here to glance at their theme and seamless browsing and checkout process.
2. Categories and Featured sections: Add categories to your online store. Create a main category ‘Shop’ and under that, add your sub-categories like ‘ Dairy – > Staples – > Frozen Foods’ and more. Our premium online store allows you to easily add categories, about us sections and featured categories for easy browsing.
3. Product details: Add details about every product you sell. Mention manufacturer details, add HD images of your products, and ingredients in your products. Farmilicious, a small business using Instamojo to sell premier, natural food products, uses our free online store to sell groceries. Their vegetables, fruits, dry foods images are uploaded along with clear descriptions and features.
4. Checkout and online payments: Allow customers to ‘add to cart’ and pay online. The Instamojo premium and free online stores allow for several online payment modes that help anyone in India pay easily using the card, UPI, QR code, or net banking.
Setting up delivery
The most important bit about selling groceries online is timely delivery. Partner with a premier shipping service that caters to the delivery regions your business sells to. Even now, over 60% of online buyers want a premier shipping service to deliver, but they dislike paying a hefty delivery fee. If you have an independent website, you will need to find an ideal shipping partner with affordable rates and wide delivery coverage.
Noorali Dry Fruits & Saffron, an exotic dry food small business sells its groceries to thousands of Indias from a small town in Kashmir! With an increase in demand for their products, Noorali uses Shree Murathi, DTDC, Ecom Express(for COD orders) and India Post (for areas that are not easily serviceable) to ship their products.
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If your online store is on Instamojo, setting up and shipping is easy. You can select from a range of trusted shipping partners who offer doorstep pickup and deliver to 24,000+ pincodes. Tracking shipping and order management is also available. Find out more here.
How to do marketing for your online grocery business
Make use of organic channels to acquire customers. When you sell groceries online, your customers’ primary need is quality. Therefore, make use of channels like social media, email, and communities to grow your reach and engage customers.
Ask customers to leave feedback via email. When you set up your online store, you also get access to domains and email. Create your business email ID and send a follow-up email to your customers once they make a purchase. Add positive reviews on your online store and respond promptly to customer complaints. This extensive guide explains how to kickstart email marketing for your online grocery business.
Looking to learn everything you need to know about email marketing? Enrol for our free course on email marketing on mojoVersity – an exclusive e-learning platform for MSMEs.
Pro tip: Subscribe to existing e-grocery business newsletters to research how they communicate with customers. For example – this big basket newsletter for healthy foods and weight loss adds value to customers who are looking for healthier options while shopping for groceries.
Take care of your customers. Ensure your products are high quality with a good shelf life. Notify customers when items go out of stock and send them updates on social media or email about different offers and discounts. Keep in constant touch with your customers and keep an active feedback loop. Foodonza, a healthy food online store, makes use of its customer reviews and testimonials to assure customers of their food quality.
If you want to sell groceries online using social media, no problem! Start slow and work on building a customer base. However, it is not easy to sell groceries on social media right away. We have an extensive guide to help you get started, but it is highly recommended to start selling groceries on an online store. This is mainly due to the fact that groceries have categories and different varieties of products to stock, maintain and sell.
Related Read: How to Sell Food Online: Everything You Need to Know
Setting up any business online can be scary, but now that you know how and where to do it, you have a good head start! So, why wait more to start your online grocery store? Take the first step to becoming a successful entrepreneur.
No time to set up an online store by yourself?
Why pay extra for a developer and added plugins to build your grocery website when we can do it for you? The Instamojo premium online store is easy to set up, but in case you are not sure, our team would be happy to assist you.
Our premium store plans come with a ‘Do-it-for-Me’ model wherein a customer support team member contacts you 24 hours after you place a request on our website. No hassle, and no developer assistance needed. Set up your online store now and sell your groceries online with ease!