BigBasket records sales of over INR 2,000 crore
Published Date | 2018 November 16
Fast moving consumer goods companies have also been increasingly launching products exclusively for online platforms.India: BigBasket, India’s largest online grocer, said it crossed INR 2,000 crore in sales and almost doubled the number of customers in the year ended March, indicating a growing preference for online grocery-shopping in the country. “We hope to clock INR 3,500 crore in the current fiscal and invested heavily on marketing, analytics and creating the infrastructure to help maintain our focus on customer experience,” said Hari Menon, founder of the company, which raised USD 300 million from Alibaba earlier this year. BigBasket had previously raised funds from investors such as Sands Capital, International Finance Corp., and Dubai-based private equity investor Abraaj Capital. BigBasket has two operating entities. Supermarket Groceries sources products and sells them to Innovative Retail Concepts, which runs the consumer-facing portal and makes last-mile deliveries to comply with foreign direct investment norms in direct online retail. The company didn’t disclose its earnings but said it is profitable at an operating level in most regions. “Every transaction we do, we make money. Most of our established markets such as Bengaluru and Hyderabad are profitable at an operational level and we hope to achieve break-even in the next 2-3 years at an entity level,” Menon said. The seven-year-old e-grocer signed up Bollywood actor ShahRukh Khan as its brand ambassador in 2015 and has seen sales doubling almost every year. The retailer now has almost 10 million customers. According to BlueWeave Consulting, Grocery is the largest consumer segment by far; Indians spend more than 50% of their monthly income on groceries. It’s a must-capture space for all retailers, be it offline or online. Online grocery refers to the purchase of fresh and packaged food through online portals. Ways of buying groceries have evolved over a period of time, owing to the easy availability of products through stores and online platforms. The online grocery service is a niche market; however, it is anticipated to witness robust growth in the coming years. Nowadays, people opt for online grocery shopping as it is convenient and offers a wide variety of products, which can be delivered to the consumer’s doorstep within a stipulated time. In addition, customers are able to keep a track of their spending as well. Online grocery covers wide-ranging products such as bakery & dairy products, cereals, vegetables, and fruits. Retailers in this market offer services such as click & collect option and subscription option to ease the consumer’s online grocery shopping experience. E-commerce’s contribution to total fast moving consumer goods sales is currently about 1.3% and is expected to reach 11% by 2030. According to the upcoming report by BlueWeave Consulting on “Global Online Grocery Market, By Type of Shopper, By Category, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2025”, the global online grocery market is estimated to grow at a significant rate due to hectic schedules, growing working population, and tedious commuting provide opportunities to businesses and entrepreneurs to set up online grocery stores. With the evolving technology and increasing penetration of internet services, there is rising awareness among consumers about the different shopping trends prevailing in the society. Millennials and Generation Z are the most attractive consumer segments in the market. These are the most tech-savvy users and are ready to pay a premium to avail same-day delivery of products. However, concerns regarding the freshness of fruits and vegetables, and high delivery charges act as threats for market growth.