Did you know that you can buy a bottle of Kissan Ketchup (MRP ₹ 120) for ₹ 100 on Grofers? But also that you could buy it for ₹ 73 on DMart Ready, a good 40% below its maximum retail price? We tracked the prices of a basket of groceries over three weeks and found significant price differences across the major grocery retailers.
Grocery retail is a unique business in India.
Despite the presence of large business houses, multinational behemoths, and well-funded startups, the bulk of the market is still unorganized with small mom-and-pop stores controlling more than 88% of the trade. All of them are scrambling for the opportunity to become the destination of choice for a consumer’s weekly or monthly shopping. And in a country of nearly 1.4 billion, that opportunity is a massive one indeed.
It has remained an attractive proposition.
Grocery accounts for two-thirds of India’s retail market and online players account for very minuscule, close to 1% of the grocery market. Since the onset of Covid-19 and the launch of Reliance’s JioMart, competition in the online grocery market has increased.
Currently, there are six major players in the e-grocery space. Among them, Amazon and Flipkart, do not have a separate website for selling groceries. However, both have a separate division that sells grocery – Amazon Pantry and Flipkart Supermart.
The typical urban shopping basket
We created a “typical” shopping basket and compared prices across the major e-grocery platforms in India. The product basket was for the Mumbai location and included grocery items consumed by a typical urban family. The list, while not exhaustive, tried to cover most things an urban family would need in any given month.
We compared prices over a three-week period to compare discounts, offers, private labels, and availability across players.
The basket selected has a printed price, i.e., MRP of ₹ 9,542. Personal care products were a major part of the basket followed by staples.
Table below shows the specific items we considered in the basket and their prices across all online retailers.
Click to enlarge
Among the six online grocery platforms compared, DMart Ready and JioMart have the highest discounts. The discounts offered by – Amazon, BigBasket, and Flipkart Supermart – are in a tight range of 11-12%. The lowest discount was offered by Grofers.
Across the six categories selected, DMart offers the highest discount on Home Care and Beverages. In the personal care and packaged food category, both – DMart and JioMart – offer similar discounts. Flipkart Supermart has the highest discount on staples and the lowest in dairy compared to peers.
Another way to look at the data is to index all item MRPs to 100 and see where each retailer’s prices were to the MRP. Numbers in the table are colour coded to represent the discount or lack of for each item.
Red (MRP) to Blue (Discounted). The dark blues show the deepest discounts while the reds show pricing at or close to MRP.
Click to enlarge
Notice how Grofers shows the most “reds” in its column while Dmart Ready and Jiomart are more blue-shaded.
Of the 38 items in our basket, we looked at who had the lowest, highest, and in-between prices, summarised in the chart below. So, Bigbasket had the highest prices for 34% of the items in question and the lowest for 13% of the items. For the remaining 52.6% items, their prices were between the best and the worst.
Grofers had the highest prices for 50% of the items while Dmart Ready was the highest priced seller for only 1 item (~2%).
Table below shows the aggregate pricing for the basket to categorically show Dmart Ready as the lowest priced basket followed by Jiomart.
Six families buying the same basket of goods from each of the retailers would see significantly different bills when clicking check out. The Grofers customer would pay 90.7 against 100 of MRP while the DMart Ready customer would pay 83.5, a good 7.2% lower versus MRP.
On publishing the post, Grofers did its own analysis in which they put in higher-sized products and ran a comparison on % savings generated. According to their analysis, Grofers ranks in the second position behind DMart.
Link To Grofers’ Blog:- https://grofers.com/blog/creating-transparency-around-low-prices/
Private labels vs Brands
The sample basket has been prepared from popular branded products. However, if we replace branded products with private labels, an additional saving of 10-20% is possible.
Private labels are available for basic staples across most of the online grocery platforms – Good Life (Reliance), Premia (DMart), Vedaka (Amazon Pantry), Supermart (Flipkart Supermart), BBPopular, Fresho, BBRoyal (BigBasket), and Mother’s Choice (Grofers).
Other than staples, e-grocers also have brands for other categories. Reliance Retail’s own labels include Enzo Matic, Mopz, Expelz in the home care category and Amara, Skin 123, Calcident in the personal care category. Grofers also has a wide assortment of its own labels under Happy Home (Homecare), Orange (Personal care), and Happy Day (packaged food). Amazon Pantry also has a few offerings under Solimo (personal care and packaged food) and Presto (Homecare).
There are various specific day discount sales and cashback/additional discounts in partnerships with banks and/or payment gateways that were available for all the platforms. Few platforms also have paid membership program which offers benefits including additional discounts, cash backs, and free/ priority delivery. BBStar (BigBasket) and Smart Bachat Club (Grofers) are a few examples.
Discounts remain the mantra
Consumers have a range of options, to research, find, compare, plan and then order their daily grocery needs. Value-conscious buyers will continue to dominate the e-commerce market in India. As Indians continue to chase discounts, the penetration of e-commerce will continue to rise. Currently, they are largely present in metro and tier-1 cities.
Our research, while far from exhaustive, unearthed some interesting takeaways:
- DMart holds true to its tagline – Daily Discounts Daily Savings, offering the deepest discounts versus MRP. Jiomart runs them close
- Among e-grocers, BigBasket has a strong portfolio of competitively priced private labels in staples. However, its pricing on branded goods is the highest
- Retailers are trying to migrate value-conscious buyers to their own private labels by pricing them significantly below established brands
Other articles you might find interesting:
IPO: DMart is a wonderful company, but with all this excitement…
The fall of the Indian Retail Mall
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