{"id":14488,"date":"2022-06-29T15:50:35","date_gmt":"2022-06-29T12:50:35","guid":{"rendered":"https:\/\/powersoft365.com\/?p=14488"},"modified":"2022-06-29T16:11:51","modified_gmt":"2022-06-29T13:11:51","slug":"e-commerce-grocery-companies-shift-focus-to-large-packs-to-drive-higher-returns","status":"publish","type":"post","link":"https:\/\/powersoft365.com\/en\/blog\/articles\/e-commerce-grocery-companies-shift-focus-to-large-packs-to-drive-higher-returns\/","title":{"rendered":"E-commerce grocery companies shift focus to large packs to drive higher returns"},"content":{"rendered":"\t\t
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E-commerce grocery companies shift focus to large packs to drive higher returns<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Small packs of grocery products are no longer being pushed aggressively by online delivery platforms such as Blinkit, SwiggSmall packs of grocery products are no longer being pushed aggressively by online delivery platforms such as Blinkit, Swiggy Instamart and Dunzo, with the focus shifting to larger packs to drive higher returns per delivery, said people with knowledge of the matter. Companies are also focusing on bigger packs on instant delivery platforms–they say this leads to higher margins and bigger ticket sizes.<\/p>

\u201cWe see a positive response from our users towards large pack sizes,\u201d said Mrunmayi Oke, head, category and growth, Dunzo. \u201cWe are giving our users the best deals when they shop in bulk; the margins on such transactions create a win-win situation for users and the platform.\u201d<\/p>

The economics of serving a consumer with a large pack is significantly less than a smaller or single serve, said Kalpesh Parmar, country general manager at Mars Wrigley India, which sells Galaxy, Snickers, Twix and Bounty, at prices that start from Rs 10 and go up to Rs 200. \u201cBesides, as chocolate buying is a planned purchase online, large packs sell well,\u201d he said.<\/p>

Executives said large packs also serve as a more convenient option for consumers, a trend that took off during Covid-induced lockdowns and accelerated with surging in-home consumption across both essentials and discretionary products.<\/p>

\u201cConsumers prefer large packs on ecommerce platforms. Among the reasons for this could be that they associate larger packs with greater offers,\u201d said Neeraj Khatri, chief executive, consumer care business, India and South Asia, Wipro NSE -1.52 % Consumer Care & Lighting. \u201cAlso, consumers shopping on these platforms are relatively more affluent and prefer to buy big packs.\u201d<\/p>

Despite the higher cost of operations and lower discounts on instant services, convenience and impulse buying are driving high conversion rates, executives said.<\/p>

Manufacturers are pushing larger packs on the ecommerce platforms, said Mayank Shah, senior category head at biscuit maker Parle Products. \u201cIt\u2019s a win-win for both online platforms as well as companies,\u201d he said. \u201cWe get higher margins as ticket sizes and order values go up. For ecommerce platforms, it leads to reduction in the number of deliveries and turns out more viable with better economics.\u201d
A Swiggy Instanmart spokesperson said in an email: \u201cWe list products in varied quantity packs. Customers often purchase smaller packs when they want to try something new. During the purchase process, if they buy multiple smaller packs, we help them discover combo packs or larger packs as an option to get the best value for their money.\u201d<\/p>

Blinkit didn\u2019t respond to queries.<\/p>

Another reason companies have started to push larger packs online is to differentiate between such platforms and general trade, amid protests by traditional distributors last year alleging that large fast-moving consumer goods (FMCG) makers sell their products at lower prices to wholesalers such as Reliance NSE 2.08 % JioMart, Metro Cash & Carry and business-to-business (B2B) platform Udaan.<\/p>

\u201cAlmost all companies have started differentiating stock-keeping units (or packs) with separate pricing online and kirana stores, which is one way to avoid conflict between trade channels,\u201d Shah said. \u201cThat is another reason for larger packs being pushed online.\u201d<\/p>

The All India Consumer Products Distributors Federation (AICPDF), a grouping of dealers and distributors of FMCG companies with around 400,000 members, last year demanded \u201cequal treatment from companies\u201d and had threatened to halt supplies if demands were not met. Quick commerce platforms–which aim to reach doorsteps in 10-20-minutes through micro warehouses and small, delivery-only neighbourhood stores–have been growing faster month-on-month in terms of volumes compared to platforms that take four hours or longer, despite steep cash burn.<\/p>

Quick commerce could be a $5 billion market by 2025 from $0.3 billion currently, despite challenges including low margins and high delivery costs, consulting firm Red Seer said in a report. Swiggy, Blinkit and Dunzo all raised additional funds this year. In January, Swiggy raised $700 million (Rs 5,225 crore) led by Invesco for its commerce grocery service Instamart. Blinkit, previously known as Grofers, raised $100 million through convertible notes from Zomato in the year. Online food-delivery and restaurant booking company Zomato is said to be aiming to acquire Blinkit. Amazon has not entered quick commerce although it services orders in two hours through grocery delivery platform Amazon Fresh.<\/p>

Source: Economic Time<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

E-commerce grocery companies shift focus to large packs to drive higher returns Small packs of grocery products are no longer being pushed aggressively by online delivery platforms such as Blinkit, SwiggSmall packs of grocery products are no longer being pushed aggressively by online delivery platforms such as Blinkit, Swiggy Instamart and Dunzo, with the focus…<\/p>\n","protected":false},"author":5,"featured_media":14489,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[71],"tags":[],"class_list":["post-14488","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"yoast_head":"\nE-commerce grocery companies shift focus to large packs to drive higher returns - Powersoft365<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/powersoft365.com\/en\/blog\/articles\/e-commerce-grocery-companies-shift-focus-to-large-packs-to-drive-higher-returns\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"E-commerce grocery companies shift focus to large packs to drive higher returns - 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