Ola begins pilot of quick grocery delivery service

New Delhi: Ride-hailing platform Ola has started piloting a quick delivery service for items like grocery, personal care and pet care products in Bengaluru, making a foray into the quick commerce sector, according to sources. The sources said Ola is starting a pilot of its ‘Ola Store‘ in Bengaluru starting off with a few key localities, and then to expand across major cities in India in the coming months.

The service is aiming for a sub-15 minute delivery timeline, they added.

When contacted, Ola declined to comment.

The sources said the service is available within the Ola app and is rolling out to select consumers in Bengaluru.

Customers will be able to order from an assortment of nearly 2,000 items across multiple categories including groceries, beverages, home and personal care as well pet care products. These will be delivered from strategically placed dark stores in key parts of the city, the sources added.

While traditional ecommerce deliveries take a day or longer, quick commerce (or q-commerce) enables customers to get small quantities of goods to customers in a shorter period of time. Some of the players in the segment include Dunzo and Swiggy Instamart.

According to a RedSeer report, the quick commerce sector in India is expected to grow to $5 billion by 2025 from the current $0.3 billion.

Trends like shift in consumer behaviour from value seeking to convenience seeking that has led to weekly, small-sized purchases compared to larger, monthly purchases; big players like BigBasket and Grofers; and rise of instant delivery platforms that has allowed consumers to complete top-up/unplanned (on-demand) purchases within an hour of ordering, are helping the segment grow.

Ola, which is operated by ANI Technologies, also has food delivery and financial services offerings. It recently launched a vehicle commerce platform, Ola Cars, to enable consumers to purchase vehicles.

The company has reported its first operating profit of Rs 89.82 crore on a standalone basis (ride-hailing business) with revenues at Rs 689.61 crore for 2020-21. On a consolidated basis, Ola saw its operational loss narrowing to Rs 429.20 crore in FY21, while revenue declined 63% to Rs 983.15 crore on a consolidated basis (including food and financial services businesses).

Ola is reportedly looking at raising $1-1.5 billion (Rs 7,324-10,985 crore) via an initial public offering and is expected to file the DRHP (draft red herring prospectus) in the December quarter.