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Ola could relaunch online grocery business with Foodpanda

Indian cab-hailing giant Ola is reportedly planning to relaunch online grocery business, in partnership with its food delivery unit Foodpanda. Ola is expected to leverage 125,000 delivery riders working with Foodpanda, to make grocery deliveries.

After an unsuccessful stint in the grocery domain, Ola is back with refreshed vigour, as interest in the grocery segment spikes, with major e-commerce players looking to enter the industry.

According to reports, Ola has been working on a grocery specific platform for the last five months and it is expected to be launched in early 2019.

The cab-hailing startup has been exploring partnerships with major retail chains and cash-and-carry companies across the country, through a revenue-sharing model.

The reports are yet to be confirmed by Ola.

In June 2015, Ola started testing its grocery vertical ‘Ola Store’, partnering with retail chains like PNP Retail, Top N Town, and Namdhari’s Fresh, among others. It offered more than 12,000 products to customers across Bengaluru, Hyderabad, and Gurugram.

Without much success, Ola had to shut down ‘Ola Store’ in March 2016.

This time Ola is equipped with the already established network of Foodpanda, to further boost its efforts.

Ola had acquired the foodtech startup Foodpanda India, in December 2017. The cab-hailing giant has been investing and strengthening Foodpanda’s network over the past couple of months.

In September 2018, Ola app integrated Foodpanda, allowing the latter, access to 150 million customers.

In the grocery delivery segment, Ola will be competing against already established BigBasket and Grofers. Apart from the existing players, e-commerce giants like Amazon and Flipkart have been aggressively expanding into the grocery segment, to leverage this growing opportunity.

In August 2018, Flipkart launched Flipkart Supermart, its online grocery store. It is currently operational across Bengaluru, with plans to expand presence to Hyderabad, Chennai, and Delhi by the end of this year.

Amazon has been expanding its grocery vertical, through Amazon Pantry.

There are a number of hyperlocal grocery delivery startups that have a strong presence in their neighbourhood including, DailyNinja, ZopNow, Satvacart, and Milkbasket.

According to a report by Goldman Sachs, the Indian online grocery market is expected to reach ₹270 crore by FY19, growing at a CAGR of 62% from 2016 to 2022.

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