bigbasket: The New-Age Phygital Grocer

bigbasket: The New-Age Phygital Grocer
bigbasket's journey has essentially been the story of the evolution of online grocery retail in India.

By Charu lamba , Deputy Editor

17 Aug 2022 | 19 min read

bigbasket’s journey has essentially been the story of the evolution of online grocery retail in India. When it commenced operations in 2011, only a few believed that such a business could be successful, especially in a country where people tend to rely on local Kirana shops for their daily needs. Most people considered that fruits and vegetables will never be purchased online. However, the online grocery retailer persevered with its vision and has now become India’s largest online supermarket and a full-stack online business with over 50,000 SKUs.  Its turnover is expected to cross Rs 13,000 crore this year. Fruits and vegetables contribute more than 15 percent of its sale.

After the initial launch of bigbasket, it introduced various services to enable customers to order in whichever way they want their groceries to be delivered. This includes the subscription service bbDaily for products like milk, vegetables, eggs, etc.; India’s first unmanned cashless smart store bbInstant for fast 2-minute shopping; and the more recent bbNow, through which 3,500 grocery items can be delivered within 20-30 minutes of placing the order.

“We have also launched our physical retail outlets, and have 90 operational at present with plans to scale the number to 600 by March 2024. Alongside, we have also achieved several sustainability landmarks such as having the largest EV fleet in our segment and usage of innovative technologies to achieve our sustainability goals. Recently, we started delivering fruits and vegetables without packaging to reduce waste generation and usage of plastic. We are proud to be the leaders in a hotly contested market and look forward to a lot more achievements in the times to come,” stated Hari Menon, Co-Founder, and CEO of bigbasket.

The aim of the brand is to reach out to the customers seamlessly and expose customers to the convenience of shopping on bigbasket and avail assortment and prices irrespective of the channel they shop on.

“For our brick-and-mortar network, we have already established about 40 stores, and we will scale to about 600 stores in two years. This will give us 100 percent coverage across the existing customer base. Unlike a city-by-city approach, we have adopted a strategy of addressing pin code clusters and setting up stores to cover each cluster. Through this strategy, our 90 stores are already covering 50 percent customer base, and soon we will have a physical presence to connect to 100 percent of our customers,” he added.

Delivering Complete Assortment

The core value proposition of bigbasket is to deliver a complete assortment of fresh and healthy consumable items at competitive prices to customers’ doorsteps in a hassle-free, transparent and sustainable manner. All this is enabled by its technological capabilities right from the start of the supply chain. With it, customers get the largest range of products and freshest fruits and vegetables pan India within hours.

“We are present in the entire spectrum of grocery retail in India now. We started out with our main bigbasket portal which is the one-stop shop for the entire grocery needs of a household. It continues to be our best-performing service and has become India’s largest online supermarket. We also have the subscription-based bbDaily platform for routine needs such as milk, bread, fruits and vegetables, eggs, and meat, the quick-commerce service bbNow as well as the unmanned cashless stores called bbInstant. Further, we are also establishing our chain of physical stores all over India. As of now, our plans are to consolidate the business and expand market coverage in the existing categories,” Menon asserted.

“For us, the majority of the category addition this year will be in meat and beauty,” he further added.

The e-grocer had just rolled out a separate meat entry point ‘Fresho Meats’ on its app which enables customers to discover its entire meat assortment quickly and shop for them separately. It has a large range of fresh chicken, fish, and mutton sourced directly from farms and fishermen and also marinated range like Chicken Malai Tikka, Amritsari Achari Tikka and BBQ Pepper fish, and sausages, kebabs, etc. which enables people to prepare their favorite chicken and fish in quick time. All meats ordered on bbNow and Fresho Meats are delivered in 20-30 minutes using its bbNow platform.

“Apart from this, we have 20,000 plus products in the Beauty category comprising makeup, skincare, men’s grooming, deodorants, and perfumes. During the next year, we will be continuously adding to our range of beauty products as well expand the number of cities in which we provide the complete beauty assortment to all pin codes across the country,” he explained. 

“We are expanding our non-food offerings with time, but food category products are our mainstay. We have entered the market with a vision to transform grocery retail in India with the aid of technology and quality. At present, the majority of our products and all our services are focused on fresh raw food items, agricultural products as well as processed and baked foods. In the visible future, we aim to further expand our offerings in the food category as well as the market coverage. Thus, even when the non-food category evolves, fresh and high-quality food items will continue to be our champions,” he further added.

Currently, the e-grocer is delivering about 15 million orders a month. The average ticket size varies based on format from Rs 400 to Rs 2,000 per order.

Private Label Offerings

The approach of bigbasket to the private labels is different from the market. Typically, retail brands offer private products as low-cost packaged alternatives for higher-priced popular brands. However, bigbasket has consciously focused on building its private labels as high-quality premium brands which may not be cheaper, but offer superior quality to the customers.

“We have various private labels in almost every category of groceries, raw foods as well as in ready-to-eat and bakery products categories. For instance, we have Fresho which offers milk, bread, cheese, eggs, meats, fruits, vegetables, etc. bbRoyal is our private label brand which comprises quality staple products such as rice, atta, and dal, dry fruits, and spices. Two new additions in the range of our private label are bbGooddiet and Tasties Origins,” he said.

BBGooddiet is a brand of Healthy Foods like snacks, cereals, nutrition bars, ready-to-cook products, and superfoods that appeal to the health-conscious millennials and Gen Y/Z customers.

Tasties Origins is a range of ethnic snacks which cover ethnic snacks from all states of India. For example; one can get their favorite Banana Chips from Kerala, Murukku from Tamilnadu, Jhal Muri from Bengal, or Khakra from Gujarat from any city.

“We are constantly scaling our private label sales, and expect the segment to contribute to about 40 percent of our revenue by coming fiscal compared to about 37 percent of our revenue as of now,” he shared.

Leaders of the Category

Unlike other brands, bigbasket is an end-to-end daily needs platform. It is not just quick commerce, slow commerce, or subscription-based player. It has evolved as a diverse and multi-faceted platform, and it is this versatility of offerings that other players don’t have.

Explaining it further, Menon said, ”Further, we have invested heavily into technology and infrastructure over the years. We have our own dark stores, logistics services as well as physical outlets. This has given us the unprecedented capability of managing and expanding the entire farm-to-table ecosystem. We also have our high-quality private labels and subscription-based services which are rapidly gaining customer acceptance and we have a very high retention rate. Alongside this high growth rate, we have also constantly focused on our environmental impact, and are one of the greenest e-commerce players in the country.”

“bigbasket has also been the pioneer in introducing a back-end farmer supply chain program called Farmer Connect. About 85 percent of our produce comes directly from farmers. This program was thus introduced to cut the supply chain and ensure the quality of fresh produce. As a result, it helps increase farmers’ income by 10-15 percent. We have set up 65 collection centers across the country and source 85 percent of fruits and vegetables directly from farmers. We have always strived to put our farmers and customers at the forefront. bigbasket guarantees an instant and remunerative payout to farmers and ensures safe, fresh, and best quality of harvest to consumers at competitive prices,” he added.

Along with this, the customers stick to its platform due to the consistent quality of fresh fruits and vegetables, bread, meats, and the BB Royal range of rice, atta, and dals.

By covering all delivery options i.e. 30 min quick delivery, subscription model for products like milk, eggs, bread, etc. which enables customers to subscribe for products to be delivered at a certain frequency, and a complete assortment of 50,000 items that are delivered within 1-2 days, the e-grocer is ensuring that the customer doesn’t need to try any other channel or store for their grocery requirements.

“Our ‘Har Din Sasta’ promise ensures that the customers do not need to look elsewhere or for particular times of the year to get offers/ discounts on the products. We provide competitive prices for our assortment throughout the year,” he said.

Technology: The Game Changer

As a digital-first grocery retail platform, it has deployed the most advanced, customer-friendly, and diverse technologies, right from the outset and through to the entire supply chain.

“We have apps and websites like our main bigbasket platform and the bbDaily app. We also recently launched bbNow, our quicker-service app that enables under 30-minute deliveries apart from other services such as bbInstant,” Menon asserted.

“We have also introduced a range of technology-driven physical stores as bigbasket ‘Fresho’ outlets. These are smart technology-driven, self-service outlets. To assure the customers of freshness, Fresho stores offer the option to check when the produce was harvested. There is the name of the farmer and the date of harvest on the products, making it the most transparent and trackable supply chain in the country. The stores have merged technology such as ‘Self-Billing Counters’ with ‘Video AI’ to allow customers to select items and weigh them at the counter. The computer vision-equipped system automatically identifies products and generates bills accordingly. The entire process is seamless, efficient, and convenient as well as accurate for the customers,” he added.

For online customers too, the e-grocer has already begun integrating all its existing apps and services into a single super app. This will further enhance the customer satisfaction that bigbasket is known for.

“We have created our stores as AI-driven, self-service outlets. The customers select products that are identified using computer vision and weighed accordingly at the self-billing counters. The entire process is automated, seamless, and convenient. Further, we have introduced unmatched transparency of supply chains at these stores. Each product at Fresho stores comes with the date of harvest and the farmer’s name on the packaging. Thus, customers can be absolutely certain about the freshness of the products they purchase,” he stated.

Q-Commerce: The Emerging Trend

Quick-commerce is not going to replace or transform the existing grocery logistics, as currently, the entire market for this is just about 20 percent of the overall grocery ecosystem. The majority of the customers are completely satisfied with 1-2-hour deliveries for groceries, and the key to sustainable operations is to ensure the delivery of quality products in a convenient and customer-centric manner.

“The over-emphasis on shortening the delivery timelines is going to further make logistics players continue to burn cash instead of achieving profitability. Having said that, there will surely be a market maturity soon and we can look forward to a sustainable scenario where the right technology and delivery network will reduce the cash burn,” explained Menon.

“Quick-commerce as a separate industry vertical is a bit of a misnomer. At bigbasket, we already have a major network of dark stores and delivery logistics in place. Our service bbNow delivers to customers in under 30 minutes, and depending on the customer’s location, it is common for us to deliver within 10-20 minutes as well. Thus, with our humongous range of product offerings across thousands of SKUs, and such a robust infrastructure, we are already a key player in the segment. However, we are not aiming to target the 10-minute delivery race as that is not only unsustainable but also unnecessary more often than not. As long as we have a robust delivery mechanism of 20-30 minutes deliveries and the right product range to offer, we will continue to grow faster than the competition,” he further added.

Future Plans

It is aggressively aiming to retain its pole position in the Indian grocery delivery market. It is going to expand its 30-minute delivery option to the majority of pin codes within each city.

“We are going to expand the number of cities where we are present from the current 43 cities to about 100 cities this year and also expand our delivery to small towns and rural areas within the catchment of these cities. Through all these initiatives, we look forward to achieving a turnover of Rs 13,000 crore in FY 2022,” he stated.

“We are planning to expand the network to 70 cities. There are multiple channels that we are focusing on to help us achieve this growth. We are expanding our dark store network to cover 90 percent of the pin codes within the 43 cities This will enable us to cater to the requirement of 90 percent of our customers within 30 minutes. The superior convenience and humongous product range offered by bigbasket alongside the multiple delivery options is helping us steadily grow the brand and the strategy will continue to support our growth plans in the future as well,” he added.

bigbasket’s journey has essentially been the story of the evolution of online grocery retail in India. When it commenced operations in 2011, only a few believed that such a business could be successful, especially in a country where people tend to rely on local Kirana shops for their daily needs. Most people considered that fruits and vegetables will never be purchased online. However, the online grocery retailer persevered with its vision and has now become India’s largest online supermarket and a full-stack online business with over 50,000 SKUs.  Its turnover is expected to cross Rs 13,000 crore this year. Fruits and vegetables contribute more than 15 percent of its sale.

After the initial launch of bigbasket, it introduced various services to enable customers to order in whichever way they want their groceries to be delivered. This includes the subscription service bbDaily for products like milk, vegetables, eggs, etc.; India’s first unmanned cashless smart store bbInstant for fast 2-minute shopping; and the more recent bbNow, through which 3,500 grocery items can be delivered within 20-30 minutes of placing the order.

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