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Indian shoppers flocking to online supermarkets

MUMBAI -- Online supermarkets are gaining popularity in large cities in India, as they address local shoppers' needs with convenience and low prices.

The LocalBanya online supermarket is gaining popularity in Mumbai with its wide product range.

     "I am satisfied because the online store carries a wide range of products and lets me specify the hour of delivery," said swati suman, a Mumbai housewife in her thirties.

     She recently began shopping vegetables and fruit at the LocalBanya online supermarket, which offers deliveries in and around the city. A busy mother of a four-year-old and a 18-month-old, she likes that online shopping saves her time by eliminating the need to go to stores.

     Banya means foods and general goods in Hindi. LocalBanya's landing page lists a host of the day's specials. Products sold by the online supermarket include avocados, cherries and other items that are not so easy to find at local stores. Its delivery hours are long, starting at 7:00 a.m. and continuing until midnight. Items bought online are delivered next day at the hour selected by the shopper.

     In addition to the convenience of a wide product range and home delivery, the online store offers good prices. For example, potatoes and onions, staples in India, are about 10% cheaper than average street prices.

     LocalBanya achieves this through bulk buying. It has created a mechanism to purchase products in large volumes and passing on cost savings to customers in collaboration with Germany's Metro and other wholesalers.

     The business was launched in the spring of 2012 by three twentysomethings. One of the pioneers of online supermarkets in India, LocalBanya has grown to serve 50,000 registered customers in just two years.

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     BigBasket, an online supermarket based in the southern city of Bangalore, has grown rapidly, thanks to the popularity of its quick deliveries. The number of online retailers, including those selling electronics and books, is increasing sharply in India, with new players entering the market one after another.

A man accepts a delivery from an online supermarket in Mumbai.

     The normal selling points of online retailers -- convenience, low price and a wide product range -- are also draws for Indian consumers. But there are some uniquely local factors at play in the growing popularity of these businesses in the South Asian country.

     Many Indian households buy foods from small family-run local stores, street vendors and markets. But these places do not always carry what people want. It is also often difficult to buy foreign products at these places.

     For this reason, an increasing number of Indian consumers with decent incomes are choosing to shop at Western-style supermarkets. But there are still few stores considering the size of the country's population.

     This means many of the supermarket shoppers have to drive through India's notorious traffic jams to get to stores. Traffic conditions during the typical grocery shopping hours in early evening are particularly bad, since many people are driving home from work at that time. The convenience of being able to avoid being stuck in traffic is a major reason why online supermarkets are succeeding.

      Of its roughly 1.2 billion people, more than 200 million now have access to the Internet, thanks partly to the growing popularity of smartphones. While overall consumption remains stagnant, Internet retailing businesses are booming in India. Online supermarkets are still relatively new here, but they will likely gain the support of many more Indian consumers.


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