Exclusive: Grofers starts last mile delivery through third-party business partners

SoftBank-backed online grocer Grofers has begun a pilot to sign up business partners for facilitating last mile delivery in Bengaluru. Currently, the company is onboarding small merchants and freelance delivery boys across pin codes in the state capital.

Such partners will deliver orders in the area ranging from 3 to 5 kilometre from their business outlets or homes. According to a company’s Facebook post, Grofers vans will deliver and pick shipments at business partners’ doorstep twice a day.

It is paying Rs 40 for delivering each order. Entrackr has also confirmed the ongoing partner acquisition drive from ground staffs in Bengaluru. The new model seems to be in sync with the company’s effort to minimise overall delivery cost.

After pivoting from marketplace model to inventory-led play, Grofers has been operating with the large centralised warehouse in each operational city. It also moved out from bike-based last mile delivery model from the beginning of the last year.

Since then, it leverages mini-vans for ensuring last mile delivery. While the new mode helped Grofers to minimise delivery cost, it also added a burden of using mini-vans for even delivering a few orders.

This seems to have made Grofers to experiment with a new model for the last mile delivery.

Meanwhile, food delivery companies such as Swiggy, Zomato and other on-demand platforms have been optimising per delivery cost. According to Entrackr estimates, they spend anywhere between Rs 35 to 50 to facilitate delivery. Given this figure, Grofers also have managed to leverage bike-based delivery at that cost.

Also read: Exclusive: Flipkart plans grocery service in Hyderabad, Chennai, and NCR soon

Nevertheless, Grofers must have identified merits (which we don’t know) in piloting business partner programme. Entrackr has also reached out to Grofers for a comment. We will update the post as responses come in.

Last month, the Gurugram-based company had raised about $62 million (Rs 400 crore) from Softbank, Tiger Global, and Yuri Milner. On the other hand, its rival Bigbasket had scooped up $300 million funding led by Alibaba.

Besides the duo, Flipkart is also ramping up its stake in the grocery with the probable expansion of its grocery cum FMCG vertical - Supermart in Hyderabad, Chennai, and Delhi.

Prior to Grofers, Myntra and Amazon have also leveraging neighborhood retailers and small merchants for last mile delivery. Going forward, it would be interesting to see how Grofers new pilot for last mile delivery fares up in the future.