Supermarket chain HyperCITY to launch e-commerce operations in food, grocery

Shoppers Stop-promoted HyperCITY Retail is getting ready to launch its e-commerce operations after beta testing its site for the past couple of months.

Until now, it had been using hyper-local delivery players such as ZopNow and Amazon Now to sell food and grocery from its stores.

It has already roped in technology-enabled start-ups to do local deliveries, and is expecting to compete with big players such as Amazon in the food and grocery segment.

With food and grocery as the dominant category at its stores, HyperCITY plans to build its own capabilities to have a sustainable and profitable e-commerce model.

“We will eventually be competing against the likes of Amazon in the food and grocery segment. Most hyper-locals are either shutting down or struggling in this segment; but we hope to do it profitably by not extending our services beyond our catchment areas,” said Ramesh Menon, CEO, HyperCITY Retail.

The subsidiary of Shoppers Stop will launch the e-commerce site by the end of the month after getting feedback from consumers.

“We want to link up the entire start-up ecosystem in the food and technology space. Today, we have the help of local start-ups which have got a few rounds of funding. These start-ups help us in micro-delivery; for example, Bengaluru-based Desko, which is a relatively new player,” he added.

Considering that a host of hyper-locals such as PepperTap and Localbanya have already shut shop in certain markets, HyperCITY does not believe in entirely depending on them to grow its e-commerce business.

“Very few hyper-local players are surviving today. In this scenario, we have to use consumer feedback and get more experience on how to run our e-commerce operations. There is a need from smartphone-using consumers who require home deliveries.”

Meanwhile, hyper-locals such as ZopNow are ready to compete with modern trade retailers in the online space.

Mukesh Singh, founder, Zop Now, said: “We were in any case competing with the offline players, and with them gong online, it is not going to be any different. There is consumer demand for online grocery, and consumers do not differentiate between the source of the food and grocery brands when it comes to home deliveries.”

Intending to have a profitable e-commerce model, HyperCITY will be limiting its online operations within the catchment areas of its 19-odd stores across cities such as Mumbai, Bengaluru, Hyderabad and NCR.

“We want to ensure profitability for our e-commerce venture from day one. Food and grocery is the reason why consumers come to our stores, and we expect 2-3 per cent of the sales to come from the e-commerce in this segment,” Menon said.

HyperCITY also has an exclusive agreement with UK-based retailer Waitrose for selling food and FMCG products.

With a turnover of ₹1,000 crore, HyperCITY is already on the cusp of making profits, and has been keeping its stores at 40,000 sqft, adding about 2-3 every year.