Taxiing into new zones: Soon, Uber to deliver grocery at your doorstep

Dara Khosrowshahi
Global ridesharing major Uber might soon move into the burgeoning grocery delivery space. After launching its food delivery service in India Uber Eats almost three years back, sources close to the firm said Uber might launch a few pilots for grocery delivery in India as early as next year.

The development comes soon after its global Chief Executive Officer Dara Khosrowshahi during an event in Los Angeles said the company moving towards grocery delivery after food is the next logical step in the evolution of the Eats vertical. The grocery vertical would be added to the Uber Eats app.

“With Eats, we’re getting into the business of moving food around. I think this product of delivering great quality food to you at home in 30 minutes or less is magical and is going to move into grocery in a way that’s fundamental and a lot more people are going to be eating at home… you can absolutely see grocery as being an adjacency,” he said at the international event.

Sources said the company has been working on developing a sustainable grocery delivery model globally as well as for India which is its most important market outside of the US. The company has been working on a blueprint for grocery delivery for India for the last three months and is drawing up the finer points, so that it can prepare itself for a pilot in the first half of next year.

“Things are still at the drawing board stage. Nothing has been finalised and they are looking into things such as who would be supplying the grocery, how hyperlocal the company wants the model to be, and the major retailers to be roped into the whole exercise. Once all these are worked out, only then will Uber go ahead with the plan,” said a source close to the company.

The cab aggregator has been quite bullish about its Uber Eats business globally, which, according to it, has been growing 200 per cent per year and has a $6 billion run rate. Uber’s June 2018 quarter net revenue was $2.7 billion, up 51 per cent from the same quarter last year, while gross bookings were $12 billion, which was 41 per cent higher year-on-year.

Other food delivery players such Swiggy are also planning to get into the grocery delivery space. According to recent reports, Swiggy is planning to launch grocery as well as medicine delivery services in the Delhi-National Capital Region, Mumbai, and Bengaluru in November this year.

Analysts, too, are bullish on the e-grocery segment and predict it will be worth $28 billion by the end of 2018. Little wonder that every e-commerce player wants to have a finger in the lucrative grocery pie.

Amazon, Flipkart, and the soon-to-be-launched Reliance e-commerce are pumping significant resources into this space. Sources at Flipkart said the Walmart-backed firm has allocated close to $400 million for the e-grocery segment alone. It has already launched its grocery vertical, Supermart.  

Reliance e-commerce, too, is said to be developing the biggest omnichannel grocery store network in the country, riding on the back of its 3-million merchants and close to 8,000 stores. 

And Amazon India is planning to introduce some of its Whole Foods range on the platform by the end of this year or early next year.

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