Big Basket: After collecting revenues of $33m last year — when it was present in just five cities — it is projecting income of $126m in the financial year to March 2016 and $295m the following year.

Local Baniya, which started operations in Mumbai three years ago, operates in five cities, as does Zopnow, based in Bangalore. Investors such as Sequoia Capital, Saif Capital Partners, and Tiger Capital Partners are also backing other young on-demand grocery delivery services such as Pepper Tap and Grofers These use mobile phone apps to link consumers to local stores, including independent mom-and-pop shops, and handle deliveries for online orders.

With nearly 67 per cent of Indian retail spending still going towards food and groceries, analysts and investors see a huge potential for companies that can cater to urban dwellers who are short on time, and want a greater choice of products than typically available at mom-and-pop stores, traditionally known as kiranas.

But if the potential rewards are high in Online Retail and E-Commerce of Grocery (E-Grocery), so are the challenges. Online groceries require complex logistics, including local supply chains that must be developed city-by-city, with a reliable system that ensures rapid deliveries within precise time windows.