How to Start an Online Grocery Business in India

Introduction of how to start an online grocery business

In this article, today we are going to learn how to start an online grocery business in India. Online selling, better known as e-commerce, has truly hit its pace. Fortunately, getting started is easier than you might think provided you have basic information about the business and you have a team of e-commerce website store solution experts to get the things implemented.

A guide on how to start an online grocery business in India

For almost everything, our generation is completely dependent on technology. It has changed the way we live and interact with each other. With our changing lifestyle, it is making a greater impact on our daily needs. Then why grocery shopping should be left behind? To be honest, a few years back, the only outing that happened every weekend, used to be a grocery store. The long billing queues made it worst. But with time and technology, everything changed for good. Thanks to the e-commerce industry for making online stores for selling groceries. It saves both time and effort.

Steps to start an online grocery business in India

Let me give you a step by step guide to starting an online grocery franchise. From fresh fruits and vegetables to rice, spices, seasonings, packaged products, beverages, personal care products, meats, and everything we get in one place nothing but an online grocery store.

 This article’s objective is to help you with planning to start an online grocery store in India.

These are the steps involved in starting an online grocery business:

  1. Decide the delivery region
  2. Register your business
  3. Set the inventory
  4. List known grocers in the area and discuss partnership opportunities
  5. Find a delivery system
  6. Choose an e-commerce platform
  7. Multiple payment options
  8. Make a marketing plan
Steps involved in setting up a online grocery business in india.
Steps involved in setting up a online grocery business in india.
  1. Decide the delivery region

This is a major factor that determines the popularity and success of your business. If you are planning to start an eCommerce business, then you should determine the delivery regions you will be serving. This crucial decision has to be made based on a lot of factors like social preferences of people who reside in that particular area, their initial response to your online grocery and market competition. A true business genius will always find opportunities in the market. After all, running a successful grocery store and managing large inventory is not a child’s play. In order to make your grocery store successful, you must think like a successful entrepreneur.

  1. Register your business

Once you have decided to start an online grocery business, you should register your company, take necessary permissions from the authorities, and get all the different types of tax submission. You can start your grocery business with a sole proprietorship firm or if you have a partner to continue with LLP registration. To complete the registration process successfully you can get in touch with any tax consultant or chartered accountant. They will help you complete these formalities and guide you throughout the process.

The licenses and permits required for starting an online grocery store in India are

Shop Act Registration: Every store or shop and retail counter requires a Shop Act license. The Shop Act is a mandatory registration and is designed to regulate the payment of wages, hours of work, leave, holidays, terms of service, and other work conditions of people employed. It is to be applied for within 30 days of business commencement. This license is state-specific regulated by the Department of Labor, and hence, needs to be registered with the respective State Government.

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FSSAI License & Registration: Acquiring an FSSAI License is crucial. You can obtain this license by filing an application with the Food Safety and Standard Authority of India (FSSAI) itself.

The stores sell food products and processed items and must, therefore, obtain an FSSAI license. The FSSAI is responsible for protecting and promoting public health through the regulation and supervision of food safety and is a mandatory registration/ license for business entities that engage in food and related activities.

FSSAI abbreviated as the Food Safety and Standards Authority of India. The FSSAI license is of 3 types:

  • FSSAI Registration
  • FSSAI State License
  • FSSAI Central License

GST Registration: GST is an indirect tax that is levied on goods as well as services such that all the existing state and central indirect taxes are subsumed under the GST.

Trade License: A grocery store also requires a trade license in order to carry out the business and to conduct trading of the goods. A trade license is a document that gives permission to the applicant that seeking to open a business to begin a particular trade or business in a particular area or a location.

Income tax: Every business, including the food industry, shall have a PAN and TAN in the name of the business or in the name of the individual in whose name the transactions are to be made. PAN and TAN are two ten-digit unique alphanumeric numbers issued by the Income Tax Department. As per the recent changes, AADHAR can be used in place of PAN for filing IT Returns but PAN is still essential when it comes to making payments exceeding Rs 50,000.

Labor law registration: There is more than 20 labor law legislation which is in force in India.  The government of India has introduced a unified code of wages and a code of social security to unify the central labor laws.

  1. Set the inventory

Inventory is the soul of any grocery business. The arrangement of inventory can be done in two ways – either you can stock up the products or tie-up with local grocery stores initially. The best way to start is to prepare a list of products and make arrangements for that.

You need to have diverse products to attract new customers. And for that, you need a solid inventory management tool that has unique inventory management tools that will help you in database management with ease and proper flow for finding each product in your grocery store. For example, StoreHippo gives you the freedom to list various categories and sub-categories in a multi-tier hierarchy in an organized way for your store.

  1. List known grocers in the area and discuss partnership opportunities

If you are planning to start an online grocery business, this strategy is best suited. Here you can try and cater to a diverse audience. It can be done by replicating the business model made for an online marketplace. Here you will tie-up with multiple shops that are offline and will process the order based on the presence towards the customer. If your online grocery store receives an order from a customer then you can reach out to the physical store in that locality and can ask them to deliver the products.

  1. Find a delivery system

Your business is connected to your customers via delivery services. Make sure you choose a reliable one. It plays a crucial role in running your business successfully and it can make or break customer relationships. The delivery service you choose should be prompt in the areas where you operate. Go for an e-commerce solution that integrates with your grocery delivery partner. It must-have features that update the clients on their order status via text. Some advanced features can also help you track the delivery live.

Business owners planning to start an online grocery store should figure out the options for delivery. Some customers may need same-day delivery while some others might look for next day delivery for groceries online. Make arrangements for the delivery timelines for all the orders. Before starting your business, you would also need to decide the range of delivery areas like 5km, 10km, or 15km radius within the city. You also need to hire a few delivery boys with bikes to manage deliveries. By providing great customer service, you can grab the market attention and provide with utmost services.

  1. Choose an e-commerce platform

The major step to set-up your online grocery store is creating an e-commerce website. You have two options to proceed with this one. You can either go for the conventional site making the process that will be lengthy and costly. Or you can make a smart move that partners up with an expert e-commerce service provider to save your time and money. You can easily log in to the platform and set up your own store. You can choose from their existing theme library or try your hands at designing with the easy drag-drop functionalities and simplified back-end.

A good website and mobile app development agency can help you achieve your business goals. Online presence helps your business to grow and empowers you to connect with more and more customers. It helps you maintain a healthy relationship with your customers while bridging the gap between you and the consumers.

  1. Multiple payment options

When it comes to payments, customers look for multiple options. Some are comfortable with payment through their cards while others prefer payment wallets to avail cash-back offers. Look for a platform that provides a flexible yet reliable payment solution. Make sure your grocery store can integrate your site with online payment wallets and payment gateways.

What payment methods are used on your website or app for accepting payment is important. Along with debit or credit card, you can provide an option of Cash On Delivery (COD) also to make it easier for the users to place online orders. You would be able to save money on payment gateway costs by accepting COD.

By adding payment methods we provide our customers with multiple choices. It allows the customer to choose their preferred payment method and bring them the utmost convenience.

  1. Make a marketing plan

If you want to make your online grocery business successful it needs solid marketing. Your store’s online presence must be felt by your target audience. You can go for on-page and off-page SEO of your site. Make sure you also use offline marketing at local places. Discounts and offers are the most tested and used method of marketing. Go for an e-commerce partner that has a dedicated marketing based module for your grocery store. This will help you manage heavy traffic in an organized way and you can enhance your business visibility while increasing your customer base. This is the marketing strategy for the online grocery business.

These are the ways that can help you to promote your online grocery business:

  • Putting an advertisement in the local newspaper
  • Distributing pamphlets
  • Running a social media campaign
  • Sending bulk SMS
  • Putting up hoardings at prominent locations in your locality
  • Doing door-to-door visits
  • Attending society meetings

Challenges in the online grocery business

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Challenges in the online grocery business.
Challenges in the online grocery business.

Technology is taking our life beyond imagination. It’s drastically changing it to the core. Now, you can get everything online from household cleaning products to beauty, and makeup, everything you need for your daily needs is now available online.

Here we have listed some of the challenges in the online grocery business:

  • The biggest challenge for the Grocery business is storage
  • Unwillingness to pay delivery charges
  • Low-profit margins
  • Most of the shopping is done by housewives and they are not good at technological
  • Missing Inventory management
  • Keeping fruits and vegetables fresh
  • Huge marketing cost

The bottom line of how to start an online grocery business

There’s no doubt that food and beverage e-commerce will not only grow in the near future but will grow at a faster clip than e-commerce on the whole. It’s only logical that this industry will follow in the growth footsteps of so many others when it comes to online sales.

Food and beverage companies both large and small must find ways to support online ordering, pickup, and delivery. It’s about meeting the shifting preferences of customers, and every business can and should find its own way to make it work.

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