Ola diversifies into grocery delivery


Uber-Olacabs-Ban-editOla diversifies into grocery delivery and looking into diversification and derive maximum from consumer internet segment. Although it was looking to partner with companies for tie up and launch the service. Grocery delivery will be on the lines of Ola Cafe.

Ola is looking to partner with offline retailers directly for grocery collection and delivery. The company is
planning to pilot the service next month. Ola has advertised on job portal Babajobs, where they are
looking to hire delivery personnel in the selected areas of Bengaluru like Brooke fields, Marathalli,
Koramangala and Chennasandra areas where there Ola Cafe service is in force.

In the advertisement Ola has mentioned the candidates should posses a bike. The move indicates Ola is
moving away from cab as delivery medium and makes sense as motor bikes are more suited for quicker
deliveries. The work timings is split into 2 shifts and operations will start from morning 7 to 11 in the


The company is aiming on the professionals who work in the areas and have erratic timings and many
times do not have time for grocery shopping. Ola is trying to get into as many segments in the online
space. Recently they started online food delivery called Ola Cafe in certain areas of Bengaluru, Mumbai,
Chennai, Hyderabad and other cities. Now they are planning to roll out the grocery delivery.

In the US, Uber provides similar services called Uber Essentials and had introduced online food delivery
system called UberFresh. This move comes in the wake when Amazon has launched an express
delivery platform called KiranaNow for everyday consumer products available to its users in Bengaluru.
Amazon has partnered with local grocery stores to offer this service. The service in a pilot stage in
Bengaluru and likely to launched in other cities in the future.

Grocery market in India is huge, out of $525 billion retail market in India, 60% spent on groceries, on
rough estimation around $350 billion or Rs. 20 lakh crore market as of now. However it is one of the
most unorganized and has lot of intermediaries. India stands 6th largest grocery market in the world and lot of potential for streamlining.


However 1% of the groceries are purchased online by the Indians and expected to cross another 1%
making 2% of the total online grocery purchases by 2020. Technopak estimates online grocery business
growth at a rate of 25 to 30% in major cities in India. The online grocery segment is already getting
crowded in short time.

Apart from Amazon, PayTM, Grofers, Local Banya and Pepper Tap have already their presence in the
online delivery of products. BigBasket.com, Local Banya and Zopnow are major players in the online
grocery delivery area. PayTM has launched a dedicated app called Zip to connect users with local online
and offline grocers.

Recently Ola has been funded by DST Global with existing investors for $400 million in its fresh round of funding. Ola has valued around $2.4 billion placing in one of the top startups in India.