Online grocery delivery firm AskMe Grocery is foraying into high-margin gourmet foods category, a move aimed at arresting dipping average orders on its platform.

The company expects gourmet foods to account for about 10 per cent of its targeted Rs 1,800 crore GMV (worth of merchandise to be sold through its platform) this year.

“Gourmet is an exciting category. There is strong demand but the supply is often not available everywhere. People may have to travel to get some of these products, especially the international brands,” AskMe Grocery Co-founder Ankit Jain said.

He added that the service has started with Delhi and will be expanded to “at least 25 cities” in the next three months. The category will include pasta, sauces and dressings, vinegar, olives, cornflakes and oats, biscuits and wafers, jam, dry fruits, pickles, olive oil and tea, including those from international brands.

“The margins in the category are higher. We will continue our local sourcing model. However, these products will be under the ‘Next Day Delivery’ service, which we are looking to grow,” he said.

Jain said the company expects the move to help its double average basket size to Rs 3,000. “We hope that about 15-20 per cent of our users will buy gourmet products, increasing their average basket size from about Rs 1,400 to Rs 3,000… This will also help us get new users,” he said. In May, the company’s average basket size was hovering at about Rs 1,900.

“Of our targetted GMV for this year, about Rs 150-200 crore should come from the gourmet category,” Jain added. Unlike competitors, AskMe is still confident of growth and plans to expand across various categories.

Recently, it had partnered Mother Dairy Fruit and Vegetable, a wholly-owned subsidiary of the National Dairy Development Board (NDDB) to expand its fresh food (perishable grocery) category. The fresh food category, according to Jain, has higher instances of repeat purchase and hence, has a huge scope of growth. Grocery delivery is a cash-intensive business.

According to industry analysts, hyperlocal delivery startups, like BigBasket and Grofers, have been feeling the heat from a slowdown in investment as they operate on wafer-thin margins and end up losing money on each delivery.

Snapdeal-backed PepperTap has already shut down its cash-burning grocery delivery operations. According to a report by Franchise India, the online grocery market is expected to be Rs 2.7 billion market by 2018-19.

Source: Millennium Post