Story of Bigbasket – India’s Largest Online Grocery Delivery Company

Posted on June 24, 2022

Bigbasket is the biggest player in online grocery business in India.

It delivers grocery items to most of big Indian big cities and it is spready across tier II and tier III cities also.

Bigbasket started as fabmart.com in 1999 when the dot com was in full swing.

Online payment was unheard of in those days and though fabmart.com got a lot of traffic, they did not get orders.

The founders understood the problem of online payment after some time and started an offline Fabmall to offset the same, in Southern India.

Fabmall was running successfully but the founders sold the company to Aditya Birla after some time.

Year 2011, the co-founder of fabmart.com noticed a new online trend. Amazon was doing well, so were many others.

People were getting comfortable using online payments methods.

The co-founder Hari Menon, along with a few others founded Bigbasket in the same year (2011).

After launch, the company came face to face with infrastructure related problems.

There was not enough cold storage of grocery items at that time. Then there were no chilled rooms or refrigerated trucks.

The founders spent next 3 – 4 years improving the infrastructure.

In 2016 they started delivering some important items like milk, bread and egg to people within 90 minutes.

Online grocery business runs in three model – inventory model and marketplace model and hybrid model.

Bigbasket started with the marketplace model. Orders used to come in through the App when then was forwarded to listed vendors and the order was fulfilled by vendor.

The margin of profit was low in the marketplace model.

Later Bigbasket switched to inventory model. Under this model, then bought grocery in bulk and then stored them their cold houses and later fulfulled demands as they came in.

The inventory model was giving bigbasket a good margin as they received discounts for bulk purchases.

Marketing strategy

The delivery of essential items like break, egg and milk within 90 minutes was a masterstroke and got them many customers.

Bigbasket roped in Indian superstart Shah Rukh Khan to endorse their product.

The company focused on customer satisfaction. They created a big team of 700 – 800 people to answer customer queries quickly and resolve any issue.

They also offered discounts for late delivery.

Business model

Bigbasket sources grocery items from vendors and farmers in bulk and stores the same in their warehouses. They have in-house cold storage facilities to store the items.

Buying in bulk gives them better margins.

Bigbasket’s 2015 acquisition of Deliver helped them improve their delivery channels.

The company sells the grocery items to customers through their app. They have created custom categories to put a customer in.

When the customer is new, he/she is put into the silver category. The other two categories in the list are gold and diamond.

Bigbasket tries to retain and move the customer upto the diamond level. For this purpose they provide customer satisfaction through various discounts and facilities.

Stats

At present the company has presence in more than 32 cities of India. They have around 50,000 storage units and some 12,000 farmers are associated with them.

Acquistions

Bigbasket has made 6 aquisitions till now.

2015 – Delyver, a hyperlocal delivery company.
2018 – Morning Cart, a milk delivery startup.
2018 – Raincan, a milk delivery startup.
2018 – Kwik24, a smart vending machine startup.
2020 – Daily Ninja, a milk delivery app.
2022 – Agrima Infotech, a food and retail AI company.

Out of these startups, Delyver in particular helped the company to upgrade their delivery system.

Funding

Bigbasket has been acquired by TATA group in 2019.

The company sought to improve their operations model, delivery and and upgrade the technology to increase their margins and retain a competitive advantage.

Bigbasket received their first funding of around Rs. 45crore, in the year 2012 from Ascent capital.

In the latest round they have raised around Rs. 350crore from Supermarket Grocery Supplies – a TATA venture.

The highest funding received by the company stands at around Rs. 2200crore from Alibaba Group.

In total Bigbasket have raised some 19 funding from various investors which also includes a few debt financing.

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