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CASE STUDY- How Big Basket has changed the Online Grocery Marketplace?

23/03/2016

bigbasket

What you will find in this Case Study?

1) About Big Basket
2) How BigBasket started?
3) Funding Received
4) Business Model
5) Current Scenario of BigBasket

 

About Big Basket

BigBasket

BigBasket.com with 18000+ products and 1000+ brands listed on their catalogue is known to be India’s largest online food and grocery store. It offers a wide range of options in every category to deliver you with the best quality products at the lowest rates including fresh fruits and vegetables, spices and seasonings, a category of packaged products, beverages, personal care products, even meats, and many more.

As of now, BigBasket is a purely internet based company and does not have any brick and mortar stores.

How BigBasket started?

It all started in 1999 when Hari Menon along with five of his friends- VS Sudhakar, Vipul Parekh, Abhinay Choudhari and V S Ramesh launched their online retail website known as ‘Fabmart’.

They failed to get some traction as their idea was way ahead of its time, so they could not work for the masses.

That was the time when they all decided to put the online business on the backseat and focus totally on ‘Fabmall’ with all their energy. Fabmall was their physical retail chain of grocery stores. They too merged this chain with another grocery retail chain known as ‘Trinethra’.

Implementing many strategies and with hard work, in a matter of seven years, they succeeded to expand their business to 200 stores across Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Around the same time, they also decided to sell-off the business to Aditya Birla Group.

Then the time came when they start thinking of getting back to their original idea of online grocery store. Discussion with serial entrepreneur Krishnan Ganesh was successful and they concluded to go ahead with it. The idea was collectively seeded by serial entrepreneurs and angel investors Krishnan and Meena Ganesh. And finally in December 2011, they launched BigBasket.com!

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Funding Received

Soon after their launch, they received their first funding of $10million from ChrysCapital co-founder Raj Kondur and Ascent Capital.

There were 15 funding rounds of more than $100 million in the whole year of 2014. So far this year, BigBasket has raised $150 million in fresh round of funding led by UAE’s Abraaj Group to expand its services into smaller cities. Existing investors Bessemer Venture Partners and Helion Advisors along with International Finance Corp and Sands Capital also participated in the round.

Business Model

Big-Basketapp

BigBasket has effectively used unmatched customer service with large variety of products using constant innovation using technology.

When BigBasket started its operations, it adopted the ‘just-in-time model’ – wherein not only unpreserved good but every item was brought against an order. In other words, they were purchased-to-order. In this model, the delivery boy directly picks up the item from the retailer, and directly delivers it to the customer.

As the time passed and their business grew, they proceeded to an ‘inventory model’ for most of their products, and BigBasket now buys products directly from suppliers like – HUL, P&G, farmers, mills, etc. and then stocks these in their  warehouses. And for the revenue generation, BigBasket adds a small margin to the cost price of the product before vending them.

But BigBasket also sources many of its products locally as well as nationally. Some items like onions, oranges, apples, etc. are purchased nationally from their major producing locations; while, many other items are sourced locally from ‘mandis’ (markets) or local farmers. This depends on the product and its surrounding factors.

Current Scenario

BigBasket has been implementing a Hyper-local strategy, wherein, it has joined hands with more than 1,800 neighborhood grocery stores across India to deliver goods within an hour.

Looking for the current scenario – BigBasket now processes almost 20,000 orders a day, with the involvement of 2000 team members.

Earlier they had acquired a hyper-local delivery start-up ‘Delyver’, to further strengthen its delivery service. Although, the company still functions as an independent firm, but the co-founders of Delyver have also been included in the management team of BigBasket.

This acquisition has helped BigBasket in their Express Delivery model, to delivery groceries in one hour.

Moving on, around the mid of 2015, BigBasket also roped in Bollywood actor – ‘Shah Rukh Khan’ as their brand ambassador, for an undisclosed sum; following which, they also launched a high volume television, digital and print media campaign as well.

They are now operational in 20 cities which include six metros, and are in plan to expand to 50 more tier two cities soon. They will also be opening 8 large warehouses in metro cities.

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