E-Grocery

E-Grocery

History of E – Grocery

In the beginning as early as 14th century, a grocer was a dealer in some foods like spices, peppers, sugar and coffee etc. in some other countries like US, grocery stores descended from trading posts, which sold not only food but clothing, furniture, household items, tools, and other miscellaneous merchandise. These trading posts evolved into larger retail businesses known as General stores.

The present business models of online grocery retailing utilizing traditional stores alongside the dotcom stores for more efficient collection is a result of nearly 20 years of active development. The long and active history of online grocery retail markets in UK who made it the most developed market in the world. In UK nearly all biggest grocery retailers have actively been developing online services for more than ten years. Even though TESCO is by far the biggest player in the marketplace, the competition and activeness of the other retailers is a significant reason for the overall attention of the new channel.

Over last few years, the wave and startup of grocery retailers through internet was a critical and serious step to challenge and beat the dominant supermarket business models. So after the failure of number of businesses in the industry and grocery retailers, it became an evident and fact that the efforts of selling groceries through internet and delivering them to customers’ home is not an easy and comfortable act as it was seen and anticipated.

Everyone has seen enough and effective change in the rise and fall of first wave Internet grocery retailers from the last five to six years. Huge and more attention and focus has been given towards aggressive dot com e groceries as it has challenged existing and old players and grocery businesses, especially in United State of America (USA). High number of companies/businesses have invested large amount of dollars of capitals to establish and build stronger grocery business but they had not survived and performed well and near to near to breaking even they ran/gone out of financial sources (money) and resources. Most and even all them (grocery businesses) have currently and recently gone out of financial sources and money and they are forced to cease and stop their businesses and operations.

The old break and mortar retailers have done well and taken over outstanding and best parts of their challengers’ companies, operators and businesses and continuously doing the improvement and development of e grocery business and operations through implementing and using new concepts and ways with conventional grocery business and operations.

As e grocery or grocery business through internet is a good and effective business than traditional grocery businesses, it has some critical challenges in case of their customers and vendors of the business and having enough and fruitful opportunities in the industry and in existing business operations and even in the regions and areas of the operations (Kruh., 2017). Some major and important challenges and opportunities for e grocery business are discussed below that shows the future ways for growth of the business/businesses in form of capturing opportunities and different challenges that the e grocery may face them with the passage of time.

The most well known example of this is Ocado which is a pure online grocery retailer which has been able to survive in this tough market space.  With innovative and active approach to grocery retailing and marketing, Ocado has become a very tough marketplace.

Challenges for Customers and Venders

The very first and crucial challenge for E grocery is the operational structure of retailers and businesses. This shows that how business revamp and restructure its management and backend system and process that span the overall and a vast array of critical and necessary logistics of the business and does the business has same price for both online and at store etc? How you or your business manages its inventory to control expenses and minimize costs etc and how to design and package the product and how to offer and provide it to your potential customers? How the company/business or you select delivery process(Kruh., 2017) and how it is managed as well as how you plan and set delivery process and even routs? These are the important and key factors and processes that must be managed properly and efficiently. These above mentioned are all major and extremely important factors which are needed to be managed very critically because these are the very start up challenges for e grocery and without facing and managing these factors an e grocery business cannot be run effectively and cannot serve and satisfy its customers and venders.

Starting a new business/company or firm from scratch is a tough job and in case of grocery retailing, it becomes more and more tough and difficult because of the fact that the materials of production comes from number of suppliers and all of them have strong and long-term relation with the business/firm. Customers of e grocery are not happily and usually willing to pay huge or more for groceries but only for average in the supermarket and how they need. Customer may want to pay little higher for home deliveries instead of going to store but they pay higher which only covers the cost. In this case the company or business must be able to offer the same price as competitors offer. It shows and tells that starting from scratch needs more and enough capital and financial sources and resources for the company/business at startup level.

When the sales volume of groceries expands and increases as the buying power grow. This factor gives clear and huge advantage to the existing and established grocery business and retailers in comparison with others to the pure play startups when establishing and starting an e grocery as complementary and new channel (Kruh., 2017). Choosing and selecting a traditional retailer and enhancing their business and operations by improving and developing new e channel is a better technique and way to reduce, break and eliminate this critical and crucial barrier of entry to e grocery.

At the startup and even during operations it is required for the business to use IT and do invest in IT for effective operations and management of activities. It includes number of activities and the business has to account all of them to fulfill and complete and deliver orders and on the basis of desired retailer targeting and positioning. It is necessary for the grocery business/company at the very first step of startup to communicate and satisfy its customers that we deliver and offer within a window/place which works for you and we can provide you faster as you need. This becomes a critical and notable challenge for the e grocery business and need enough capital investment in IT and other technologies while they get launched and operate e grocery business.

There are many comments about the mission of e grocery and wave.com internet grocery that their mission is somehow impossible in the first step or place. Most of them are true and correct. The techniques and ways which these companies use to beat traditional grocery businesses and retailing was only and simply fighting number of wars at one time. For gaining buying power while dealing with providers and suppliers, a huge level of sales volume was needed. To get and gain huge and large sales volume you must need to have large number of potential customers and to get and attract these potential customers you or your business should set attractive and affordable price ranges and to have the ability to provide high quality and better services. And the most important thing is you have to create and make profit and earnings before you ran/gone out of capital or money. So it may be this that you or business had to change and diverse the behavior of consumers and customers (Kruh., 2017). So the change and diversification is possible if the value, you or your business offers is good but it takes, took and will take more and more time for a challenger or business fighter to get succeed.

Opportunities for Customers and Venders

There are number of potential and fruitful opportunities for the customers and venders in the e grocery field of business and retailing.

Today’s situation in e grocery is good and comparable to build a new supermarket but there is no product for the shelves. The importance of identifying and handling on Web is still needed to put at the particular place by manufacturers of the products. This requirement is for both things, an easy and good product display with an easy selection. In this situation or case suppliers of the businesses are required to provide prepackaged products which can be consumed / used directly and easily by e grocer or can be linked to any e grocery site or page on the Web. So this requirement and need creates an opportunity for the venders and suppliers of the business/retailers.

The business does not have to give its focus and attention towards the development and improvement of displaying product. Through the use and source of technology, a product could be easily purchased in different ways and with different techniques by the customer or consumer. This process completely depends on the personal and daily acts of consumers as well as on the situation, they make purchase in. E grocer can easily offer and provide its product or complete product line in many different situations rather than only through their actual Web place or Web store. So this new ways of offering product to the consumers become good opportunities for the customers of these products and businesses.

Another huge and good opportunity for e grocer businesses is to be integrated with the activity planning and behavior of consumers/customers. The web based organizers and personal calendars of an event can provide different practical basis for/of their business services (Kruh., 2017). Like an example, based on the number of individuals who are attending an event, the e grocer and their dealers can propose and convince through a menu can create a good shopping list on the basis of menu. And this can become a huge opportunity for the customers of e grocery business.

Demand of E – Grocery in Al Ain City

UAE is mainly a famous destination for tourism and is mainly considered as a shopping attraction place in the whole Middle East. As per as Al Ain city is concerned, it has a huge demand for online grocery. There are different verities of outlets mainly located within the super markets. Nowadays people of Al Ain city are mostly using internet and internet based gadgets so they want to make all their transactions online instead of going to stores. Some of the huge examples of online grocery are souq.com, dubbizle.com, boutique1.com, ellamart.com, brownbag.ae, emiratesavenue.com and nahel.com. A survey showed that most of the people living in Al Ain city are going towards online grocery (Jaramillo. and Chen, 2015). Overall, the retail market in UAE especially in Al Ain city has grown spectacularly over the past five years which shows that there is a huge demand of online grocery. The total sales are increased with 50 Percent to USD 19.75 Billion (DH 72.54 Billion).

There are thousands of online grocery and delivery websites in UAE specifically in Al Ain City. They are also known as online deliveries directors. People of Al Ain are demanding for online grocery that is why the numbers of websites is also increasing continuously. It was reported that demand of online delivery products such as gift delivery, grocery delivery and many other online grocery systems experienced a major growth in UAE particularly in Al Ain City. The reason of this growth was demand for online grocery by people of Al Ain.

Here of some of the examples of online retailing in UAE and in particular in Al Ain city and they are facing a huge traffic of customers due to the increased demand for these channels.  The examples are:

Organic seasonal fruits and Vegetable

Organic farmers in Al Ain city and allover Dubai grow best organic fruits and vegetables and then they deliver those fruits and vegetables to home through door to door service but the all the orders are made online by customers.

Flowers and Gifts

By using different online websites they make online selling of flowers and other gifts and make their home deliveries. They provide a wide scale of flowers and gifts solutions for the existing and potential customers. People in UAE especially in Al Ain city demand these gifts and flowers for different events (Chopra., 2016) like wedding ceremonies etc.

Fast Foods

There are different online stores who only deal with the supply of fast foods. They offer multiple types of fast foods products food their customers and they are linked with different retailers. They reach their customers when they make an online order.

The UAE grocery market is an emerging market for foreign importers. Domestically produced foods represent 25% of food products available at all retail stores. Many key retailers in UAE have partnered with foreign companies to import food products directly. UAE consumers are demanding greater convenience and healthier foods due to their busier lifestyle and growing awareness of health issues (Jaramillo. and Chen, 2015). Therefore, grocery retailers are adapting their services and products to meet these changes in demand.

With the increasing demand for online grocery in UAE especially in Al Ain the numbers of online websites are also increasing. There are some websites who work as online grocery retailers in UAE.

 

  • The Test
  • Giant
  • Ripe
  • Trolley
  • Fresh2door
  • Early bird
  • To Sum Up

There are two side of this discussion which is Enabler and inhibitors re Enabler and inhibitors. Enablers are those who provide all these services to consumers while inhibitors are some of the obstacles in way of providing these services which be related to humans of other things like technology etc. People are demanding for online grocery but there are some obstacles as well like some people have no reach of internet facilities so they cannot place an online order easily. Some of the other hurdles are lack of knowledge about online grocery, some people do not know about online grocery so they cannot avail these facilities.

With the increasing demand for online grocery in Al Ain city and overall in UAE, the awareness of this services is also on peak. Different online grocers make attractive advertisement for the purpose to make people aware of their services and tell them that how they can avail their services easily (Chopra., 2016). With this awareness most of the people who are demanding for this service and can afford it as well but do not know how to use this service. So they will come to know about the advantages of this service as well as the usage of these services via internet. They also use social media to remove all the inhibitors from the way this service is growing very rapidly.

Future Trends for e grocery

There are better trends for e grocery globally and locally in the future and these trends are growing and enhancing from current situation and time and this growth becomes effective and potential future trends for e grocery businesses. These trends are not limited to a specific or particular region or area but these trends are on both levels, global and local. Some of the future trends for e grocery globally and locally.

 

Global Trends

The net sales of e grocery or grocery through internet and e commerce platforms has reached 48 billion Dollars globally and this is noted that e grocery will be grown to nine plus percent of the total and overall market and will be 150 billion Dollars worldwide.

One of the growing areas of e grocery globally is Pakistan, the e grocery and e commerce industry of Pakistan has value of 30 million dollars and is continuously growing and will be reached to 600 million dollars by 2017 and this fact is conveying a clear message of increase of e grocery in future(Ogawara. et al., 2015). It may be difficult to gauge online grocery market size but it could be stated that e grocery can grow to be worth millions while considering global retain market of 48 billion dollars. There are 25 e grocery stores which are currently operating in Pakistan, the most well established of them are Cartpl, Tazamart, QnE, MandiExpress and much more.

Following are the main and major trends which shapes the global industry of e grocery.

It is a fact that mobile and mobile technology is the main gateway to entire world. It does not matters hugely matters now that how and businesses and consumers get conducted as the mobile technology is developing and growing (Ogawara. et al., 2015). Consumers of e grocery shop from comfort at their homes and it is continuously noted that consumers look for such comfort ability.

The mobile technology allows retailers to target and get connected with the consumers via this way and provide easy accessibility to all the products through this source and retailers are required to make it easy for their consumers to buy their products through mobile technology and this trend makes affection to the business over the world.

US has seen the largest place and market for e grocery and its continuous growth and development in online businesses and technologies makes and creates effective ways for e grocery retailers to enhance and expand its operation and businesses through this growth and trend of new technology and online retailing.

Online business and retailing is gateway to every global market and China is the hottest market for online retailing and business especially for future around 2018 to 2020 (Chopra., 2016). The technology uses and trends in china attract retailers and e grocery businesses to enhance and expand its product lines through this boom up technology of China and this creates a huge trend for e grocery in the future.

Local Trends (UAE)

The grocery market of UAE was worth 28.7 billion US$s in 2014-15 and currently representing 1.1% increase from 2013. The grocery market of UAE is divided into main five categories of the overall market share. The market share of grocery is smaller comparatively but is enough higher than other Gulf countries and markets.

Retail Market Trends

Retailing in UAE is increasing by more than 2 billion US$s each year. Food retailing is continuously increasing by 1 billion US$s every year. Spending of consumers of UAE is also growing and increasing up to 10 billion US$s per year and per capita spending of consumers is expected to be 34,690 US$s in 2016. Spending of groceries is effectively grows by 1 billion US$s each year and per capita spending in 2016 on grocery is estimated/stated to be 4,068 US$s (Jaramillo. and Chen, 2015).

Consumer Trends

Consumers’ trends are their searching and looking for bargains due to the huge rise and increasing in living cost and developing of consumers’ interest in healthier products and foods.

The income of individuals of UAE is continuously increasing and rising, their living costs are also increasing similarly. Residents of UAE are feared of rising prices of groceries because their income is high but it is also fixed. High scale changes and increases in prices and costs of dairy etc has not been significantly occurred but the prices of eatable product has been raised extremely unexpectedly since 2015-16 (Jaramillo. and Chen, 2015). So consumers are looking for bargains which counter and control increasing prices of even all grocery products and daily using items and this will be an important and attractive future trend in UAE.

With the development and awareness the UAE consumers mostly look for better healthy products with high quality and with reasonable price ranges. Fresh foods and fruits, fresh vegetables and other different natural products, foods and supplements market and industry will be having an effective and larger customer base in the future. UAE citizens and consumers also looking for sugar free and gluten free products and items (Ruhlman., 2017). So such demands are increasing and will be the future trend for groceries locally (UAE).

References

  1. , A. 2016. Direction of Online Retailing “In the Context of United Arab Emirates”. 36.

 

  1. , C. & CHEN, M. 2015. Grocery Retail Trends in the United Arab Emirates. 9.

 

  1. , W. 2017. The truth about online and e grocery consumers and retailers. 40.

 

  1. , S., JASON. & ZHANG., Q. 2015. Internet grocery business in Japan: current business models and future trends. 9.

 

, M. 2017. Grocery: The Buying and Selling of Food New York, USA.

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