Fabmart-Ratnadeep Partnership

The New Economy can't replace the old and this is where the the virtual world meets the real. Etailer Fabmart, local retailer Ratnadeep, and Singapore-based Semba Corp, have tied up for backend processing of orders received on Fabmart's online grocery store.

The etailer has also backed up the online ordering with telephone ordering facility, which will be route orders on the telephone, through a call centre to Ratnadeep, that will stock, process and document the orders, while the transport company executes and ships it to the end consumer, Mr K Vaitheeswaran, vice president marketing, told ET.

The e-grocery store in Hyderabad launched just two weeks ago, is receiving a good response, both on the Web and the call centre, with about Rs 15,000 worth orders per day. The company is expecting it to grow multifold to at least 120 orders worth Rs 600 to 700 each per customer per day.

Fabmart is also tying up with corporates here, offering employees lucrative discounts on online purchases at their e-store, and with restaurants such as Utsav and The Riviera for cross promotions.

"Convenience is the main advantage we offer, and we are targeting a different section of the customers. Therefore, hypermarkets can't be our competitors. We aren't playing the price card. Discounts are just part of our services, convenience is the major advantage," he said about competition posed by RPG group's Giant hypermarket which opened in Hyderabad today.

The e-grocery store, offering 3,000 items excluding perishables such as vegetables, eggs and frozen items, is offering delivery within a maximum of six hours, for a nominal delivery fee of Rs 5, regardless of the value of purchase. The mode of payment is credit card on the Web or cash/cheque on delivery.

"The main business is online ordering on the Web, but there are Internet penetration issues, as well as issues pertaining to bandwidth and download time. And telephone penetration is much higher, and more women and house wives prefer to pick up the phone and order, so it makes sense to introduce telephone ordering too," Mr Vaitheeswaran said defending the telephonic channel of ordering for an online store.

"If we solely wait for the Internet penetration to pick up, scaling up of business takes time. Phone becomes the first access device to experience Fabmart as a service provider," he said.

The company, which hopes to break even on operation basis within three months, is optimistic about the potential of the etailing market (currently worth Rs 15 to 20 crores) in India, because of its exponential growth.

Fabmart's revenues are growing at 30 to 35 per cent on a quarter-to-quarter basis, and in the first year of operation ending April this year, the company grosses Rs 3.2 crores, becoming one of the largest B2C ecommerce players in the country, he added.