Ola readies up second innings in grocery via Foodpanda

Online grocery is going to become the next big thing for consumer facing large Internet companies in India. All big guns including Amazon, Flipkart, and Future Group have been trying to enter the space where incumbents like BigBasket and Grofers are aggressively spending capital and trying to raise more firepower (aka capital).

Ola, which had shut down its grocery arm 'Ola Store' in March 2016, now looking to re-enter it. According to a Business Standard report, the home-grown ride-hailing firm will be leveraging its food delivery subsidiary - Foodpanda for grocery fulfillment.

Sources quoted in the report revealed that Ola will leverage Foodpanda’s resources including 125,000 delivery riders. The firm said to be working on grocery specific platform for the last five months.

The company aims to launch it in early 2019, ahead of its arch-rival Uber. The global cab hailing company is reportedly planning to launch a few pilots for grocery delivery in India as early as next year.

Also Read: BigBasket enters microdelivery space: Will it outlast Milkbasket and DailyNinja?

Meanwhile, Ola is working on striking a slew of partnerships with major retail chains as well as cash-and-carry biggies across the country. Unlike last time, retailers are showing interest as Ola is reportedly pitching revenue-sharing model to probable partners.

With on-demand cabs, food delivery and grocery, Ola seems to be replicating business model of South East Asian peer Grab. Besides taxi, Grab offers loans, electronic money transfers, payments, food delivery, and recently integrated grocery delivery on its app.

Of late, grocery has been an enticing opportunity for several horizontal e-commerce platforms. Companies have been looking up to grocery to accelerate scale and drive repeat purchases.

Since Ola already had failed at the grocery before, it certainly has lots of learnings and understanding of the segment. Going forward, it would be exciting to watch how Ola drives Foodpanda and yet to be launched grocery vertical.