BigBasket: India’s Largest Online Grocery Store

Every entrepreneur’s journey, when retold with the benefit of hindsight, can throw up valuable lessons on several aspects of managing a business. However, many such stories often tend to simplify the hardship that is entrepreneurship. The journey is often seen as a set of events that shaped up the venture to what it is today; but in reality, it is much more complex than that. There are several unexplained events, day-to-day challenges that often get left out in such narratives and most importantly, the role played by the team members in executing a strategy is often overlooked.

The Journey of a Maverick

Having said that, when an entrepreneur looks back at his or her own journey and asks the question “what could I have done better?” it gives a whole new perspective to the narrative. One such story to share here is that of a serial entrepreneur, Hari Menon, Co-founder & CEO of BigBasket.

Born in 1963, Hari is an alumnus of BITS-Pilani and started his career with ORG Systems, subsequently moving on to work with many of the best and respected names in the country. Prior to starting BigBasket, Hari along with the founding team of BigBasket had co-founded Fabmart, one of the pioneers in the e-commerce in India and its physical extension, Fabmall. And before venturing out with BigBasket and Fabmart, Hari was the CEO of ‘Indiaskills’, the Vocational Education Joint Venture between the Manipal Group and City & Guilds (UK), as well.

A lesser known fact is that Hari had also served as the Country Head at ‘Planetasia’ which was one of the first Internet services businesses in India, and had begun his career with ‘Wipro’ as a Business Head in the Infotech business.

Pitching the Idea

In December 2011, Hari co-founded BigBasket with a vision of setting up India’s largest and finest online food and grocery company. BigBasket is owned and operated by ‘Supermarket Grocery Supplies Pvt. Ltd.’ with operations having commenced in 25 cities in India. It delivers the entire range of groceries, fresh fruits and vegetables, fresh meat, dairy products, breads, processed foods, toiletries, personal care products, gourmet foods and a wide range of household products. Their range has about 18,000 products, which includes a wide range of private labels sold under the BigBasket brand like Royal, Fresho, Happy Chef, etc. As of now, BigBasket is a purely internet based company and does not have any brick and mortar stores.

Indelible Moment

Hari got a call in July 2011 from his colleague and co-founder, Sudhakar, thanks to K. Ganesh reaching out to him on a potential opportunity in the online grocery space. It took exactly 2 to 3 minutes for him to say yes. The sheer joy of having to do a start-up again, together with the same friends from the earlier journey and in the same grocery space was fantastic. And that was the beginning of many memorable experiences that followed.

Ideology of BigBasket

BigBasket allows you to walk away from the drudgery of grocery shopping and welcome an easy relaxed way of browsing and shopping for groceries. Discover new products and shop for all your food and grocery needs from the comfort of your home or office. No more getting stuck in traffic jams, paying for parking, standing in long queues and carrying heavy bags – get everything you need, when you need, right at your doorstep. Food shopping online is now easy as every product on your monthly shopping list, is now available online at bigbasket.com.

They are India’s best online food and grocery store. With over 25,000 products and over a 1000 brands in their catalogue, you will find everything you are looking for. Right from fresh Fruits and Vegetables, Rice and Dals, Spices and Seasonings to Packaged products, Beverages, Personal care products, Meats – they have it all. One can choose from a wide range of options in every category, exclusively handpicked to help you find the best quality available at the lowest prices.

Main Triggers of Growth

In 2016, BigBasket is currently at 40,000 orders a day. The main triggers for them would be customer’s need for convenience and superior service, technology, digital connectivity and a more cohesive e–ecosystem.

Approaching the Latest Trends

The online grocery business is fast becoming a mainstream retail channel. And in the next 4/5 years, one will find at least two or three large multibillion-dollar companies in the country. As the leader of the company, Hari is pretty sure that big basket will be one of them. He also believes that the largest online grocery companies will be as large as the physical retailers that they have today. This is happening rapidly because for one, customers are adopting it as a mainstream channel. They are already seeing it as their market shares are as high as physical grocery retailers in the top metros. And that trend will take an even stronger foot over the next few years.

Green Basket

Being green is part of the culture at BigBasket. An offline grocery store requires stocks to move from a regional distribution centre to the individual stores, and then someone from each family has to make multiple trips to the store to do their shopping.

Supermarkets consume a lot of energy for lighting, air-conditioning and powering their refrigerators and freezers. They bypass these, bringing products to you straight from the wholesaler to your doorstep which cuts down on a lot of carbon emissions generated by the traditional supply chain and also reduces the number of cars on their roads.

BigBasket minimizes the use of paper and plastic bags while delivering their products, rather all products are delivered in crates which are taken back and reused. Their fruit and vegetable trays are recyclable and they request their customers to return them so that they can reuse them.

Crossing the Hurdles with Confidence

One thing that hasn’t changed much is the inefficiencies in the supply chain. However, this is a universal challenge; there are three specific challenges that are unique to the e-format:

People: 70% of their employees are blue collar workers. Getting the right people at the right time is obviously an ongoing problem; in addition, retaining them is also becoming a tricky problem. As the catchment dries up, they now go to smaller cities to hire them and provide them with affordable housing in the city of operations. This helps a lot in retention.

Perishable Items: Sourcing, storing and handling fresh produce is one end of the problem; the other end is that fresh produce comes with an inherent problem of lower shelf life leading to high wastage. As a Co-founder, Hari thinks that they are one of the few in the world who are doing this well, with only 3% overall wastage. Their main focus has been on reducing the time between harvest and consumption. They are also committed to build a sustainable organic F&V and staples ecosystem.

Perception: An online grocery is relatively new to the customer – inducing trial especially for perishables is a challenge. They have learnt that offering guarantees such as a no questions asked return guarantee on any product reduces the risk perception in customer’s minds and makes it easier to induce trial. The other lesson that they have learnt is that customer’s respond to a well-designed product- in the case of grocery delivery this means offering a wide range of products, offering convenient delivery options, offering competitive pricing and providing a consistent user experience.

The Customer Base

To enhance the customer experience, BigBasket is in the process of making a transition to a larger warehouse, one which will allow them to stock a much larger range, thus improving availability and also allow them to move towards offering you same day delivery anywhere in the city. In addition, they are enhancing their technology back-end to do a fully automated picking process linked to real-time stock availability. This will allow them to make their order pick process error free.

During this transition period, BigBasket is consciously reducing their capacity to handle orders to ensure that they do not fall short of their commitment to deliver all their orders on time. As a result, over the next one week, one may see that slots are not available next day. And also find that some products may be out of stock during this transition period. They expect to stabilize their entire process within the week and to resolve all issues related to availability and also increase their capacity by then.

BigBasket currently offers their services in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi-Noida, Mysore, Madurai, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, Nashik, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore and Chandigarh Tricity city limits.

Roadmap to Flourishing Future

In the coming years, it is believed that the largest online grocery companies will be as large as the physical retailers that they have today. This is happening rapidly because for one, customers are adopting it as a mainstream channel. They are already seeing it as their market shares are as high as physical grocery retailers in the top metros and that trend will take an even stronger foot over the next few years.