DNA Money Edit: Grocery giants invade local markets

With app-based grocery sellers consolidating their presence in the highly fragmented market, India is all set to see a new revolution. As the heavily-funded new Unicorns such as BigBasket, Dunzo, Grofers, Prime Now, Supermart and Swiggy invade the market mostly fed by local mom-and-pop stores, it is also likely to whip up fresh trouble for the government already hassled by the onslaught by e-tailing giants and the resultant shutdown of neighbourhood kirana stores.

Naspers-backed food ordering and delivery platform Swiggy has now forayed into hyper-local deliveries by launching Swiggy Stores. Their service, currently being piloted in Gurgaon, will cover several categories such as fresh produce, groceries and other essentials, and is expected to hit other metros soon. Surely, it will add to the competition in the volume-driven, thin-margin hyper-local delivery services.

Swiggy, which delivers in over 80 cities, has already raced up to 28 million monthly food delivery orders as of December-end. Considering the large user base Swiggy has, it may definitely give some trouble to the existing players.

The government needs to be vigilant and see if this fresh market development is leading to some big players creating oligopolies in big cities. Such rivalries may threaten the very existence of old mom-and-pop stores that feed local markets.