Iranian Startup Online Supermarket

An online supermarket called Hyperka.com was launched at the end of 2016, according to local internet news agency Webna this week.

HyperKa is attempting to enter the increasingly busy online shopping market believed to be valued at $70 billion annually.  

The team, going through Avatech pre-accelerator mentoring is later expected to be admitted to the startup center’s fourth round of training this year.

As with all of Avatech’s teams the founders of HyperKa will be given tutoring on how to grow their business to market dominance.  

 About Hyperka’s Services  

Like much of the rest of the world, Iran is becoming a ‘web-first society’ with many services including taxis and hotel booking moving to online booking.

The one area in recent years which seemed too intractable to tackle was ordering groceries online.

Entrepreneurs in Iran first tried to open a chain supermarket in 2011. However, several issues including funding and deliveries led to the early demise of the project, according to people familiar with the matter.

But the young team behind this website believes they have cracked the formula in the local market by not having a warehouse, but like many other sites these days acting as an intermediary.

The service works thus: the user downloads the app or logs on to the site, they then select the groceries they wish to purchase and a partner supermarket will give them a delivery time. Et voila. Food at the door!

Payment can be made online, but in some instances, users can pay cash on delivery.

 Hyperka’s USP

According to the Persian language report, the online supermarket’s unique selling point (USP) is that with their partner supermarkets, they can offer up to 50% discount on some products.

Moreover, the website said it will deliver to five Tehran districts including areas one to six (minus district 4).

The targeting of the five areas is not without logic either, as the selected areas happen to be the wealthier districts of Tehran.

Iranians spend on average some $2,300 annually on groceries according to local statistics.

The new service has modest rankings according to online analytics company SW.  In December 2016, the website saw some 7,800 users log on to the site.

Moreover, the website’s ranking in Iran is 12,251, which is a long way behind similar services around the world.  

 Not Sold on The Concept

Some people in Tehran think the idea is not the right option for the already crowded market.

“I just don’t think Iran is ready for such online supermarkets,” according to one businessman in Tehran.

He added, “I am unsure what these services have to offer which is not already available in the local market [without having to use a computer].”

The commenter went on to make an interesting point about the way people shop in Iran.

Contrary to popular belief, and to the annoyance of the major foreign supermarkets, local neighborhood supermarkets have somewhat managed to hold their own against larger western-style supermarkets.

In fact, local corner shops still represent some 91.5% of the entire shopping experience in Iran. This figure increases in densely urbanized cities like Tehran due to the lack of space for larger hypermarkets.  

Another boon is that the local stores offer home delivery services with phone orders.

Ironically, these services remain competitive even with their price disadvantages against larger rivals.

 Competition

Another major hurdle for the supermarket startup is the offers they can give on a regular basis.

For example, in markets like the United Kingdom, Germany and France, online supermarkets were developed in the main by the existing players in the market.

Over the past decade, they witnessed a negative trend away from the ‘big weekly shop’, something which was pushed by the major stores to increase their revenue.

However, as living patterns have changed, all the major players in the market shifted to different models, including smaller corner stores and online delivery.

This knowledge is now being applied by one player in the market, Hyperstar Group, which is co-owned by the United Arab Emirates’ Majid Al Futtaim and Carrefour of France.

Out of all the major supermarket chains, Hyperstar is currently the only one to offer online ordering. Interestingly the company is managing to gain some traction with its online offering as it had 30,000 hits in December.

How web companies like HyperKa will affect the likes of French-backed Hyperstar is yet to be decided. However, increased competition and service quality is never a bad thing for the market.