StarQuik will supply 10,000 grocery and household products, and home-deliver the items within three hours, its website said. Currently, StarQuik is operational in Mumbai and the company plans to expand it nationally, it said.
“They were finding it difficult to get the entire range in Star Daily stores,” said the source. A mail sent to Star did not elicit any response.
Star had 42 stores across Star Market, Daily and Hyper, before closing the Daily stores.
The source said that going online will help the company reduce wastage in procurement and save in real estate costs.
Arvind Singhal, chairman of Technopak advisors, said it will be a challenging task for the Tatas to migrate customers from offline to online retail. “Online grocery portals are yet to make money. The online grocery business is yet to pick up in the country,” he said.
In contrast, RK Damani-promoted retail chain D-Mart launched a model where shoppers can order online and collect from its kiosks or what it calls pick-up points.
Currently, the model is being experimented in Mumbai. The chain has set up these kiosks in areas, such as Vile Parle East and Ghatkopar East, where it does not have stores.
The kiosks are around 200 sqft. The company has already set up 49 such kiosks and plans to scale up depending on unit economics.
D-Mart plans to scale up its hybrid online model to cities beyond Mumbai in Maharashtra in the first phase and other states subsequently, said a source. Currently, D-Mart has 141 stores in Maharashtra, Gujarat and other states.
The company has created a website and app for the service. A mail sent to D-Mart did not elicit any response.
Singhal of Technopak, however, said: “Unless their products are unique, it is unlikely that shoppers would want to visit the kiosks.” But, according to a recent Ambit Capital report, D-Mart’s FMCG offerings are cheaper than many e-commerce portals.
Mukesh Ambani’s Reliance Retail also launched an online portal for its Reliance Fresh brand. Godrej’s Nature’s Basket has its multi-channel operations.
However, Kishore Biyani-promoted Future Group has shut its hybrid model Big Bazaar Direct, citing unviability. In that format, the franchisees were given a tablet and shoppers can select the items and goods can be picked from stores or delivered at home.
The Indian online grocery market is estimated to reach Rs 2.7 billion by FY19, growing at a CAGR ( compound annual growth rate) of 62 per cent from 2016 to 2022.
Apart from BigBasket and Amazon, Flipkart is also looking to pilot the on-demand grocery delivery service.
Singhal of Technopak was skeptical about the success of D-Mart’s model. “Unless their products are unique and not available elsewhere, it is unlikely that shoppers would want to visit the kiosks,” Singhal said.
However, according to a recent Ambit Capital report, D-Mart’s FMCG offerings are cheaper than that of many e-commerce portals.