You must have heard about BigBasket, one of the leading online grocery stores. BigBasket provides home delivery of all grocery and fast moving consumer goods, but what is BigBasket’s business model.
Let’s discuss how BigBasket earn? Let’s understand how Big basket earn but before that, we need to understand about the company and all the services and products they provide.
Table of Contents
- About Founders and CEO.
- Services they provide
- How does they capture a big market in comparison to its competitor?
- How does they earn?
- Future Aim
About Big Basket and its Founder and CEO
BigBasket is one of the largest online food and grocery store in India which provide home delivery of more than 18000 products and over 1000 brands. The legal name of BigBasket is Innovative Retail Concepts Private Limited.
The company was co-founded by VS Ramesh, Hari Menon, Abhinay Choudhari, Vipul Parekh, VS Sudhakar in October 2011 in Bangalore. Moreover, the co-founders of the company are experienced and industry experts.
He was the CEO of Indiaskills which was the Vocational Education JV of Manipal Group with City and Guilds, UK, and also the co-founder of Fabmall.
Not only this but he served as the Country Head at Planetasia, which was one of the India’s first Internet service businesses. Mr. Menon also worked in top IT companies like Wipro as a business head. He is BITS Pilani alumnus.
Mr. VS Sudhakar
He was one of the co-founder in Fabmall and prior to BigBasket, he was the CEO of Plantesia, the first online service business in India. He has significant experience in IT at a senior level.
Mr. Vipul Parekh
He was one of the co-founders in Fabmall. He is serving as a Head of Finance & Marketing at BigBasket.com. Prior to BigBasket, he was an Investment Director at Peepul Capital, a leading Private Equity Fund. Moreover he served as a business development head in the Wipro Infotech Group. He is a IIM Bangalore alumnus.
Mr. Abhinay Choudhari
He was one of the co-founders of Fabmall and is currently serving as the Head of New Initiatives at BigBasket.com. He is also a founder of stylecountry.com. Prior to BigBasket, he worked in leading IT companies in consulting engagements with key retail majors like Tesco and LEGO across the world. Also he is IIM Ahmedabad alumnus.
Mr. V S Ramesh
He was also a co-founder of Fabmall and is currently serving as the Head of Logistics & Supply Chain at BigBasket.com. He had good experience in many fields especially in operations and logistics for a large fleet of ships for a shipping major.
Mr. Ramesh has over 21 years of experience in the Indian Navy handling Operations and Logistics. He holds an Electronics Engineering degree from the Karnataka University.
|Co-Founders||VS Ramesh, Hari Menon, Abhinay Choudhari, Vipul Parekh, VS Sudhakar|
|Chairman & CEO||Hari Menon|
|Chief Marketing Officer||Vipul Parekh|
History Of BigBasket
BigBasket starting story is quite interesting which was story of passion and belief. In 1999, Mr. V S Sudhakar, Mr. Hari Menon, Mr. Vipul Parekh, Mr. Abhinay Choudhari and Mr. V S Ramesh started first online business in India which was Fabmart.com.
In 2001, they launched an online groceries business as a part of Fabmall. Fabmall performed very well in the market, so they decided to setup a retail chain called Fabmall which was chain of grocery supermarkets in South India.
But, the business was acquired by Aditya Birla Group in 2006. But the founders were passionate about the business idea, so they launched BigBasket under Innovative Retail Concepts Pvt Ltd in 2011.
Until now, BigBasket had raised total funding of $1.1 Billion from many investors.
|Aug 2015||$50 m||Bessemer Venture Partners, Helion Venture Partners, Ascent Capital Group, Zodius Capital|
|Mar 2016||$150 m||Bessemer Venture Partners, Sands Capital Management, International Finance Corporation, Helion Venture Partners, Ascent Capital Group, Zodius Capital, Abraaj Group|
|Mar 2017||$6.9 m||Bessemer Venture Partners, Trifecta Capital|
|Sept 2017||$280 m||Sands Capital Ventures, Alibaba Group, Abraaj Group, Paytm Mall|
|Oct 2017||$5 m||Bessemer Venture Partners, Helion Venture Partners, Brand Capital, Ascent Capital, Trifecta Capital|
|Oct 2017||$8 m||Bessemer Venture Partners, Sands Capital Ventures, International Finance Corporation, Abraaj Group|
|Feb 2018||$300 m||Bessemer Venture Partners, Sands Capital Ventures, Alibaba Group, International Finance Corporation, Abraaj Group|
|Feb 2019||$150 m||Alibaba Group, CDC Group, Mirae Asset Global Investments|
|Apr 2020||$60 m||Alibaba Group, CDC Group, Mirae Asset Venture Investment|
Before further moving on, watch this video for understanding more about BigBasket business model.
Services BigBasket Provides
As we all know that BigBasket business model is to provide all groceries and FMCG products. In other words they provide fresh Fruits and Vegetables, Rice and Dals, Spices and Seasonings to Packaged products, Beverages, Personal care products, Meats, etc.
In the meantime, BigBasket works only in few metropolitan cities like Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore and Chandigarh.
How Does BigBasket Captured A Big Market in Comparison to its Competitors?
BigBasket used the pricing marketing strategy.
BigBasket is still a market leader after a tough competition with its competitors and this is so because, they provided product in very cheap rates and decided a nominal price for delivery which is Rs. 20 if order is below Rs. 1000.
They provide some discount if order amount exceeds Rs. 3000 or Rs. 5000. They mark the prices of groceries a little higher in compare to cover their variable cost but you can find that sometimes they give great discount on some products whose prices are very high in market but they provide them in less price.
This is because of mainly three reasons.
- Firstly, they had the product in their inventories which cost them less than the actual market price.
- Secondly, they try to acquire customer by changing the thinking of customer by making them products available cheaply in compare to market price.
- Lastly, they compensate the loss of one product from another product you purchase from BigBasket which make customer satisfy as customers get a product in very cheap price in compare to market price.
How Do BigBasket earn?
BigBasket business model and revenue model is simple. They had tied up with local vendors and whole sellers. They simply purchase product from them and deliver it to the customer and have a good supply chain for better delivery experience.
For proving better service and for this purpose, they follow an inventory-based model, in which they store products in their warehouse and directly deliver to consumer from warehouse.
Further they earns from the brands as they increase their sales and which help the brands to grow. This helps BigBasket grow.
Since the revenue of BigBasket in financial year 2017-18 was $221 Million which was corrected a lot in financial year 2018-19, which is, $386 Million. There was a 77.66% of growth in the revenue of the company.
The targeted revenue of company for financial year 2019-20 is Rs. 6300 crores.
The company is aiming to grow their reach in many more cities therefore they were recently in talks with its rivals Grofers for a possible merger and if the merger goes through, SoftBank Group, which is an existing investor in Grofers’, will participate in a $60 million to $100 million funding round in the merged company.
In another news it was reported that Jeff Bezos led Amazon was in talks to acquire BigBasket in order to strengthen its hyperlocal delivery systems and to give a tough competition to its Indian rival Flipkart. Thus, if the current deal happens, the Bigbasket Grofers deal is less likely to happen.
Note- The report is according to the techstory.in.
Here is a table to illustrate about BigBasket easily: –
|Co-Founder||VS Ramesh, Hari Menon, Abhinay Choudhari, Vipul Parekh, VS Sudhakar|
|Headquarters||Bengaluru, Karnataka, India.|
|Area served||Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore, Kochi and Chandigarh|
|Chairman and CEO||Hari Menon|
|Products||Groceries and FMCG Products|
|Revenue (FY 2018-19)||US $386 Million|
|Owner||Innovative Retail Concepts Private Limited.|
|Number of Employees||3,713|
Hence, the company Innovative Retail Concept Private Limited, owns BigBasket, is an online grocery store which provide home delivery of products. After a tough competition still they are the leading grocery website in India and had conquered the market with its marketing strategy and price-leadership.
In addition, it is backed by Alibaba, which is a global e-commerce giant.
Now as a result company is aiming to expand its business in many parts of India and grow the business.
FAQ related to BigBasket
BigBasket have hubs from where multiple delivery vans pick their orders and then head on for delivery.
According to the reports, bigbasket need to capture more market and which will be leading to more expenses which lead to incur loss.
Both grofers and bigbasket are a great platform. But both have some pros and cons.
Firstly, Grofers don’t have their own inventory whereas BigBasket have their own inventory which makes it more reliable
Secondly, BigBasket is comparatively cheaper than Grofers.
Bigbasket aims its FY2020 target revenue is Rs. 6200 Crore where as Grofers target is $2.5 Billion.
Currently, BigBasket is the leading player in online grocery market.
If this helped you learn anything, do let us know in comment section. And if you want us to write about a specific company’s business model, leave a comment below.
Alibaba has is one of the best and diversified business model, check it out here: https://indieseducation.com/alibaba-business-model