FirstClub, an online grocery play from India’s FirstCry team has established a stronghold in this space. Unlike many of the competitors, it’s willing to put quality over speed. The company has seen its valuation spike recently to $120 million. This increase comes after a successful $23 million Series A funding round that builds on an $8 million seed round raised at a $40 million valuation back in December. The firm aims to reach the top 10% of Indian households—that’s 10× households, or roughly 20 million families—by design. It provides them with high-quality products and a beautifully curated shopping experience.
FirstClub is powered by a conscientious, stable workforce of 185 individuals. This included 75 operational staff, who play a vital and expansive role in building the infrastructure to support its business model. The startup stocks more than 4,000 curated stock-keeping units across categories such as packaged foods, fresh produce, dairy, and nutrition. A critical component of FirstClub’s success is their rigorous vetting process on every product. They’ve eliminated more than 200 toxic and unhealthy ingredients from their supply chain to ensure the safety of their consumers and the quality of their products.
FirstClub operates four such “clubhouses” in heavily populated areas of Bengaluru. These act as dark stores, getting customers convenient access to their higher quality offerings. The company plans to grow its network to 35 such clubhouses in Bengaluru by year-end. From there, they’ll travel on a national tour with stops in other cities.
FirstClub provides a new way to experience online grocery shopping. They need a high cart value of ₹199 (~$2.40) just to make your checkout profitable. This plan aligns seamlessly with the new target audience. This group typically has a mean annual household income of ₹1.5 million, approximately $17,000. In comparison, FirstClub claims a healthy ₹1,050 ($12) average order value with an impressive 60% repeat purchase rate.
The firm plays up the exclusivity of its product selection, touting 60% of products as exclusive to its platform. FirstClub founder and CEO Ayyappan highlighted their commitment to quality over quantity by stating, “We are not indexing on the delivery speed, but we are saying that the products you get here, you would not find elsewhere, whether it is offline or online.”
FirstClub’s unique product curation process means every product is tested and voted on by intrepid members of a diverse consumer panel. For example, it does blind tests for quality on paneer (cottage cheese) from different brands. They narrow it down to the top three based on taste and quality. Ayyappan explained this strategy: “If I take an example of, say, paneer, 20 products from very different brands are tested by this consumer panel… whatever comes as the best… these will get onto the platform.”
FirstClub takes pride in providing our customers with quality products. They focus on developing a unique shopping experience that includes a higher level of service and vibrant customer interaction. “Based on the last three months’ data, it’s quite clear that consumers are happy to wait if they are getting a very differentiated selection,” Ayyappan noted.
FirstClub is experimenting with new delivery methods to increase customer convenience and maintain a competitive edge. This can mean things like subscription services and slotted delivery times focused on fitting hectic consumer lifestyles. Ayyappan stated, “Probably a slotted delivery, subscription delivery, offline, so all of these would come into the picture as well.”
Though competitors have taken notice, launching their own digital play into the fast-paced grocery market FirstClub is undeterred and continues forward with its laser focus. His company went with quality instead of speed. Even as its competitors race to ever-shorter delivery times, it forces every item to pass through stringent quality control. Ayyappan commented on this philosophy: “Everybody’s like, ‘I’ll offer a large selection and let the consumer choose what they want,’ versus the platform taking ownership — saying every single product it sells has to be top-notch quality.”
FirstClub, which is growing quickly, It’s set to radically change the way India shops for groceries, and set a new standard for online shopping experiences.
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