The days are long gone, when we had to wait for our turn in the long queues at a grocery store after roaming around and shopping for hours. Since online trading has seized a more significant part of marketing, the grocery stores are also getting modernised. Online retail witnessed a revolutionary change and a lot of online grocery stores came up in the digital market. Still, only a few could stand high after suffering business turmoil, especially after the dot-com boom.
BigBasket is one of those successful start-ups that has become India’s largest online supermarket over the past couple of years. Though the founders of BigBasket started their start-up journey around the time of the market crash in 2000, they were able to establish as one of the leading online grocery stores.
The online F&G delivery market alone is estimated to be around $600 million in India and was expected to touch $5 billion by 2020 at a CAGR of 72%. The Indian food and grocery market is believed to be the sixth-largest in the world, with retail comprising 70% of sales. Following rapid urbanisation, there has been a significant consumption of packaged and ready-to-eat foods by Indian consumers. BigBasket has established them as the game-changer of the online retail experience in India. The start-up’s five founding members already had enough experience in this industry and were skilled in their fields.
“You can raise capital, but if you don’t have the ecosystem to support you, the business mostly doesn’t thrive. You need an idea, and it needs to be executable.”
– Hari Menon (Founder & CEO)
Mr. Hari Menon, the current CEO, and one of the founders, was also the erstwhile CEO of IndiaSkills, Co-founder of Fabmall, Country Head at Planetasia and Business Head at Wipro. The four other founding members of BigBasket include Mr. V S Sudhakar, Mr. Vipul Parekh, Mr. Abhinay Choudhari and Mr. V S Ramesh. Each of the founders has a unique vision about the business,
and their ideas complement each of them. Sudhakar has a vast experience in the IT sector, and he is also the founder and CEO of Fabmall. Parekh is the Head of Finance and Marketing at BigBasket, whereas Choudhari serves as the Head of New Initiatives. With 21 years of experience in the logistics sector of the Indian Navy, Ramesh is currently the Head of Logistics and Supply Chain of the company. The five founders started Fabmart.com, in 1999, their first online venture. Fabmart’s online grocery division was launched in 2001, and the company grew exceptionally. They also started a succession of grocery supermarkets called Fabmall in South India, which was acquired by the Aditya Birla group in 2006, rebranding it as More. But the founders were still adamant about establishing something more prominent in India’s F&G market and finally launched BigBasket in 2011.
The company primarily delivers grocery goods found in convenience stores, home essentials, and food supplies to its customers. It was founded by V S Sudhakar, Hari Menon, Vipul Parekh, Abhinay Choudhari, and V S Ramesh in 2011 and presently has its headquarters in Bangalore, India. BigBasket currently operates in 30 cities namely Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore, and Chandigarh Tricity city limits.
Customers order groceries online; BigBasket employees then secure the items from their warehouse and deliver the items to the consumer. BigBasket has partnered with the Bayer CropScience project which has over 8000 local farmers across India that help harvest crops that are processed at their collection centers. In December 2018, BigBasket launched BB daily service to deliver milk to its customers, and in June 2018, they launched BB Instant.
Even in the Coronavirus pandemic, BigBasket along with Grofers and Amazon India is among the few online grocery platforms that continue to operate in India. They are currently partnered with American firm Uber and Indian company Rapido to deliver essentials to people.
The company raised around $10 Million in the first round of funding from Ascent Capital. By 2014, the company was growing massively in three major cities, confirming over 5,000 orders every day. In March 2016, the company raised $150 Million from Abraaj Capital in Series D funding. In the same year, the company also crossed targeted 10 Million orders and also received 1 Million orders in a single month.
By June 2017, the company raised around $290 Million in total from 8 rounds of funding and 11 investors. In the same year, the company’s most lucrative investors were Paytm and Alibaba, from whom the company raised $280 Million in Series E funding. Some of the investors who participated in the investment rounds of BigBasket are Bessemer Ventures, Helion, Zodius, LionRock Capital, and Meena Ganesh.
With all the investments it received, BigBasket decided to expand the business in other cities of India, too. The company also built several warehouses and invested in cold room facilities to enhance the range of fresh products. It also invested in technology to make delivery more efficient and shopping more comfortable, both from the browser and mobile application. But amid the growing competition in the market form other companies; BigBasket started focusing more on personalized shopping.
After in-depth research of 5 years, BigBasket figured out that the products in demand varied from city to city. This has helped the company to put more emphasis on those products and expand the number of brands. For example, for the town with more demand for dairy products, BigBasket has introduced an extended range of brands of milk products for that particular city. This strategy has escalated the profit of the company and helped outdo its rivals.