Online grocery shopping gains traction

Companies aim to utilise technology to bridge gap between producers and consumers

KARACHI:

The online grocery business has gained traction since the Covid-19 outbreak in Pakistan and businesses specialising in this segment are taking benefit of digitalisation to bring producers and consumers closer.

“Online shopping is transforming the business environment in Pakistan and giving a push to the idea of creating operational efficiencies by using technology,” remarked Fowrry Founder and CEO Adeel Hasan while talking to The Express Tribune.

Fowrry – a mobile application for delivering groceries – has generated over 3,000 jobs and its current revenue stands at $352,000.

Customers are gaining more and more knowledge day after day and are using technology to access online marketplaces to compare prices of different products and buy them.

With new companies emerging frequently and growing competition in the grocery shopping segment, Hasan considers it a perfect time to educate the consumers about the online delivery model.

“A majority of consumers still rely on the brick and mortar business model to purchase essential commodities,” he pointed out.

Outlining his company’s vision, he said that Fowrry aimed to bridge the gap between the customers and grocery producers. He expressed the determination to achieve operational efficiency through economies of scale.

He revealed that 300 people were indirectly connected to his company. The enterprise has been working closely with the Islamabad Administration since 2019 to supply fresh fruits and vegetables to the consumers at prices set by the government.

“We envisage the delivery of fresh fruits and vegetables that are on a par with international standards,” he stressed.

Echoing Hasan’s views, GrocerApp CEO Ahmad Saeed said that the role of middlemen was necessary in big grocery markets, but his enterprise targeted to minimise the middlemen intervention by setting up multiple centres where farmers could supply their produce directly.

He pointed out that the farmers were earning 15-20% more from the digital platforms while the consumers were also taking benefit of them.

Highlighting the business model, he said that his firm was striving to optimise the consumer-to-producer supply chain, which would allow the consumers to receive a high value for their money.

“Digital platforms are efficient in terms of operation and cost,” he said. “The warehouses utilised by such platforms are located in the suburbs of different cities, which cost one-fourth of the rates for premium grocery warehouses.”

He added that his business passed on the impact of cost saved from overheads to the consumers, which provided relief for them.

“We have plans to enter the meat category and introduce pulses on the application,” he said, highlighting that digitalisation was helping in the process.

To date, the company has secured a total of $9.7 million in funding from different ventures.

He emphasised that grocery was a $60 billion market, hence it was impossible for a single player to cater to the needs of all consumers.

“Grocery remains a constant challenge, especially for women as they rely on their male counterparts to purchase it,” said Saeed. “This is where we got the idea for the startup as it does not only provide a business opportunity for us but also facilitates the women in purchasing groceries.”

Encouraging entrepreneurship

Speaking about the entrepreneurship ecosystem in Pakistan, Hasan said that establishing a business was a huge challenge faced by the youth due to the high cost of setting up online enterprises in addition to the cost of doing business.

He revealed that his company offered technological platforms without any initial setup cost or monthly subscription in a bid to enable Pakistanis to start their own business and sell goods in the local market regardless of their location.

Hasan added that the startup was focusing on women-led businesses amid the Covid challenges. “Due to market closure and reduced physical business activity, women-led businesses have received a significant dent,” he said.

The writer is a staff correspondent

 

Published in The Express Tribune, July 26^th, 2021.

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