Community group-buying is revolutionizing the grocery e-commerce space in China. Disruptive brands like Furong Xingsheng (Valued at USD 3 Bn as per Bloomberg - /Funding: USD 740M) and Nice Tuan (Valued at ~USD 1Bn as per articles, /Funding: USD 450M funding) are garnering major traction by cracking the long-standing conundrum around e-commerce for fresh produce and have raised multi-millions in funding from marquee investors like Tencent, Alibaba, and more. Closer home, Otipy, India's largest social commerce platform for fresh produce, is implementing this very model to transform fresh grocery delivery in the country. Otipy is in talks with investors to raise USD 10M.
The fresh grocery category in India stands at USD 200 billion, of which less than 1per cent accounted for online grocery so far. Finally, in March 2020, Otipy emerged with the most innovative and enabling business model where the unit economics work at scale and the produce is sourced and delivered fresh, every single day. Otipy connects consumers with farmers through resellers (women and small neighborhood stores) who sell fruits and vegetables to their communities through WhatsApp groups.
Varun Khurana, Founder, Otipy said, "No one in India has been able to crack the model for fresh produce. We have a history and deep understanding of fresh that we have leveraged to build a social commerce model that creates earning opportunities for women and stores, helps farmers, and provides fresher, more nutritious produce to consumers at a lesser price. In the last 8-9 months, we have built a robust platform in the fresh produce category supporting 2500+ women and stores as resellers and are witnessing a phenomenal response from customers in Delhi NCR. We now plan to further expand this market in other cities as well."
These community leaders/resellers earn a commission of up to 10 per cent for all group sales - the highest across all social commerce brands in India. While on average resellers make INR 2,500 - 3,000, the platform's top 20 per cent resellers make more than Rs 15,000 per month which, again, is higher than any other reseller network. With 2500+ women and stores as resellers across Delhi-NCR, Otipy is already catering to 5000+ daily orders from 1 lac+ consumers. And these numbers are growing at a rapid pace. To empower more resellers and further build its business across India, Otipy is in active discussions to raise a usd 10M+ fundraise in 2021. Otipy also plans to extend its platform to other categories and has already launched specific dairy, grocery products on the platform.
Since community leaders are responsible for creating their own customer groups, Otipy's customer acquisition cost is very low (1/10th of category cost) while conversion rates are much higher than other business models. Similarly, last-mile deliveries have become more cost-efficient than ever before with community leaders being conveniently located close to the end consumers. Moreover, at 30-35 per cent, Otipy's gross margins are highest across all models, benefitting every stakeholder in its supply chain including the consumer, community leader, and the produce platform itself.
India's investments in the agritech sector are likely to exceed usd 500 million in the next two years. Otipy, too, has seen a rather continuous interest from investors. It has already raised usd 2M in 2020 from Inflection Point (IP) Ventures and the Smile Group. So, is the platform set to become the next Furong Xingsheng or Nice Tuan in India? With Otipy's growth trajectory mirroring that of China's most inspirational brands, the answer would be a resounding yes.
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( With inputs from ANI )
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