Ali Hasan
Introduction – BigBasket is an Indian online grocery delivery service that was founded in October 2011 and is headquartered in Bangalore, India. It has a total of 12 team members, including Co-Founder and CEO Hari Menon. It has 1 board member or advisor, Ganesh Krishnan.
We all knew about BigBasket but usually never ordered anything. But that’s not the case after the pandemic. After the pandemic, they have been the primary source of ordering groceries for many people living in big metro cities.
Today we will discuss about the impact that they have made in the grocery delivery segment.
Early Days – The story begins in 1999 when dot com boom was at full bloom and BigBasket was the 1st e-commerce company in India who planned to sell stuff via the internet. After 2 years, they added grocery in their listing.
In 2001, they were generating a lot of traffic since they had the 1st mover advantage but no one was buying from them due to many reasons. The reasons were as follows:-
- People were not familiar with the internet
- They didn’t trust shopping online
- Online payments were very rare
- India’s internet penetration was very low
- Digital infrastructure was quite weak
After realizing the obstacles in online selling, they pivoted to offline selling and were quite successful in South India. But even then they weren’t generating adequate profits and Aditya Birla Group bought the company in 2006.
They made a comeback in 2011 as an online grocery seller and received funding for the business. Initially they acted as an online aggregator which received orders and forwarded it to nearby local shops.
Later when they received more funding, they switched to an inventory model where they bought directly from the manufacturer and sold directly to the customers. This helped them in higher profit margins and better quality control.
Marketing Strategy – Shah Rukh Khan is their brand ambassador and frequently appears in their ads. They claim to be India’s biggest online supermarket and provide free delivery on all orders that are above Rs 1,000.
They market their services in 3 different categories such as:-
- Slotted Delivery – This is a normal deliver where they deliver groceries at a desired time slot.
- Express Delivery – This is a fast delivery service that’s only available in a few cities where they deliver groceries to your doorstep in 90 minutes.
- BB Specialty Stores – This will also get your groceries in 90 minutes but from a nearby store that’s verified by them.
User Base & Valuation – BigBasket delivers to a total of 25 cities across India where they claim to have more than 20,000 products and 1,000 brands. So far they have served 4 million customers.
On Google play store, their app has been downloaded more than 10 million times. Big Basket records 84% jump in new customers after the pandemic.
They have a valuation of $2 billion approximately.
Funding – They have raised a total of $1.1 billion in funding over 17 rounds. Their latest funding round was held on April 15, 2020. There are a total of 17 investors. The lead investors are as follows:-
- Alibaba Group
- Trifecta Capital Advisors
- Mirae Asset-Naver Asia Growth Fund
- Helion Venture Partners
- Paytm Mall
- CDC Group
As of 2020, BigBasket is looking for an additional funding of $350-400 million at a valuation of about $2 billion. This comes at a time when the demand for online grocery has skyrocketed due to the pandemic.
The Tata Group is eyeing a minority stake in online grocery firm BigBasket. The two sides are in initial stages of discussions which could lead to Tata picking up a 15-20% stake. The news was true and now Tata may buy close to 80% for $1.3 billion.
Revenues & Losses – BigBasket saw its revenue from operations jump by 74% to Rs 2,754 crore in FY19 from Rs 1,583 crore in FY18. The firm’s expenses also surged during the fiscal year. Its total expenses increased by around 80% from Rs 1877.5 crore to Rs 3,376.3 crore in FY19.
This increased spending to fuel demand pushed its losses to grow 2.1X to almost Rs 572 crore in FY19 from Rs 272 crore in FY18. Meanwhile, outstanding losses for the firm at the end FY19 stood at Rs 2,247.4 crore.
Its losses jumped to Rs 348.27 crore while revenue increased by 69% amounting to Rs 2,380.95 crore during FY19.
Acquisitions – BigBasket has acquired a total of 5 startups which are as follows:-
- DailyNinja on April 24, 2020
- KWIK24 on October 19, 2018
- Morning Cart on October 19, 2018
- Raincan on October 18, 2018
- Delyver on June 12, 2015
Controversies – BigBasket has faced a potential data breach which could have leaked details of around 20 million users, according to cyber intelligence firm Cyble.
The company has filed a police complaint in this regard with the cyber crime cell in Bengaluru and is verifying claims made by cyber experts. Cyble said that a hacker has put data allegedly belonging to Big Basket on sale for around Rs 30 lakh.
“In the course of our routine dark web monitoring, the research team at Cyble found the database of Big Basket for sale in a cyber crime market, being sold for over $40,000. The size of the SQL file is about 15 GB, containing close to 20 million user data,” Cyble said in its blog.
It added the data put on sale includes names, email IDs, password hashes, contact numbers (mobile and phone), addresses, date of birth, location, and IP addresses of login among many others.
The 2nd major controversy was when Facebook user Saurabh Trivedi shared horrifying pictures of a delivery boy working with popular brand Big Basket.
In the post, Trivedi said that he was literally “bending forward” with the weight of the bag and was sweating as the temperature outside was 43 degrees. Trivedi wrote, “He told me that his income is based on the number of order he delivers in a day and company is not concerned about their plight.”
He goes on to tag the Ministry of Labour to take an action against the company that treats employees no less than animals. It’s heartbreaking to see delivery boys working in such appalling conditions that governments must regulate rules to make their lives easier.
Future Goals – The CEO, Hari Menon said that BigBasket is focusing on turning profitable in the next 2 years. The company is expecting revenues of Rs 5,000 crore in FY20 and Rs 7000 crore in 2021.
Conclusion – Concluding this blog, BigBasket has come a very long way since 1999 and today has positioned itself as the leading grocery delivery startup in India.
With the help of the pandemic, they have grown many folds and have solidified their online presence in the marketplace which will grow further in the future.
We hope one day, we all will be able to order groceries at our doorstep without any hassle.
