Bigbasket : One-stop Destination For Online Groceries Shopping

Bigbasket: One-Stop destination for online groceries shopping

Introducing the idea

With more than 18000 products and 1000+ brands, BigBasket is leading in the digital world of online groceries in India. Started in 2011, it soon captured a great market and outshined very well in a very short span of time. It offers a broad spectrum of varieties from food including fruits, vegetables, rice, dal, spices, etc., to basic stuff for daily use including Personal care and maintenance, and many more.

They are continuously adding more and more categories and products to expand their business to a larger extent.

The initial journey

Well, the concept Bigbasket of started a long time ago in 1999. It was not named as BigBasket. It was called Fabmart during that time. Fabmart was a website for online retail started by Hari Menon and his four friends- VS Ramesh, VS Sudhakar, Abhinay Choudhari, and Vipul Parekh. They added groceries in the category section during 2001.

Being a new concept for the people and less familiarity with Internet services, the idea was not bringing many outcomes. Another reason for the falling of the idea was that the people were not trusting online products and they were more concerned about the products they buy from markets.

However, instead of dropping the plan, they shifted it offline. The five of them came to a decision to open an offline retail business that came to be known as ‘Fabmall’. It was the first Indian company that shifted from the online to the offline market. Fabmall got a lot of popularity in Southern parts of India. Getting good responses from the peoples, they merged themselves to another grocery supply chain ‘Trinethra’. With their hard work, they decided to expand it to 200 stores covering areas like Karnataka, Kerela, Tamil Nadu, and Andhra Pradesh.

But soon the business started becoming a miscarriage, they planned to sell it to Aditya Birla Group in 2006.

The comeback

After losing so much, the five of them didn’t lose hope. They believed that their idea was different and will definitely work. They only need the proper resources to make it function properly. Soon in December 2011, they made a huge comeback with the same idea of an online grocery market. This made the launch of India’s biggest online grocery store named ‘BigBasket’.

During the initial months of its launch, it faced several challenges in the market but they stood stuck to its idea and its implementation. They were only keeping their business limited to a single place that is Bangalore. After 6 to 7 months, they grew up to generate a revenue summing up to 30 crores. It made a boost in their market and they dared to expand it to two more cities:- Hyderabad and Mumbai during the second year of its launch.

After 2 more years, they expanded BigBasket to 26 more cities. They were consistent in their work and were working days and nights managing things. V S Sudhakaran once said that they set their goals according to a company ‘OCADO’ that was having a similar plan. OCADO was very popular at that time and was working worldwide. In 2018, BigBasket even exceeded the records of OCADO by its consistency.

Funding received

‘BigBasket’ received its first funding in the year 2012 during the months February-March. The amount was $10 million by Ascent Capital and Raj Kondur, the co-founder of Chrys Capital. It was series A round of funding.
The second funding was received as a series B group that amounted to $32.8 million by Helion and Zodius Capital.
The third funding that was series C amounted to $50 million from Bessemer.
The fourth funding received was even more amounting to $150 million from the UAE’s Abraaz Group, International Finance Corp, and Sands Capital. It was known as series D group funding.
The fifth funding was series E group and the amount was $200 million by Alibaba Group.

In total, BigBasket had received a funding of $526 million from the investors and there were 15 funding rounds by May 2019. It helped a lot to further expand to smaller cities. In the year 2015, it made a great leap by making Shahrukh Khan as its brand ambassador.

It became a unicorn during its funding in the F series round by getting a fund of a total of $1.02 billion. It is the first and only Indian grocery store that can become a unicorn.

Role of delyver

The first and foremost challenge in the business of fruits and vegetables, meat, and edibles of these categories is its freshness. Obviously, no one wants to eat altered and contaminated food. So, fast and on-time delivery of such products is very important otherwise it will make a bad impression on the customers.

Delyver, the delivery service was working on this. It helped a lot to BigBasket by providing its fast delivery services. They were able to deliver it within 1 to 2 hours of order. This was the acquisition that helped ‘BigBasket’ to grow.

The trio growth models

- Firstly, they were tying up with small retailers and vegetable and fruit sellers to deliver the orders they were receiving. But as the business grew, they shifted to the inventory model where they were directly contacting companies. This helps them to get the goods at much cheaper rates. Not only this, but these companies were also storing the food materials, and thereby, the quality was maintained. Also, there was no third party involvement for the sharing of the revenue. So, using this growth model, they were on a profit of some margin.
- Next, they kept a track of the insurance of all the levels of employees starting from the ground level employees or primary employees including the delivery persons and the ones who were involved in packaging and the secondary employees. Then, they shifted their concern to the selling of organic fruits and vegetables.
- They also took a major step in making cashless payments. It was done to decrease the farmer’s stress of taking cash payments. So, after each supply from the farmer’s side, the amount started getting credited to their bank accounts. Even during that time, they were benefitted from the scheme presented by the government of opening bank accounts of farmers. Over 80% of the BigBasket’s goods are supplied by the farmers.

The above three together make a trio growth model for BigBasket

Summing the things up

So, finally, a representation of the startup BigBasket is presented which made a boom in the Indian market. There are some of its competitors including Amazon, Grofers, Nature’s Basket, Zapnow, and many more. It depends on the work of BigBasket as to whether it is able to outshine among such a competitive market or not.

Lastly, are you interested in knowing whether the company is in profit or loss?

Well, it is sad to say that currently, it is going to a loss. There is a retail economy of $2 trillion and among it, only $300 billion is available online. However, it is hard to predict whether it will continuously be in a loss or make a good rise in the market.