bigbasket comes to Kovai, eyes 25K users by Dec-end

TNN | Nov 26, 2015

COIMBATORE nline supermarket bigbasket on Wednesday launched its operations in Coimbatore, the seventh best business destination in the country. Coimbatore is the ninth city bigbasket has selected to expand its reach in the country.

"The city has close to 8.4 lakh people on Facebook, which is about 24% of population. So, we see a great potential for online grocery market here," said Meera Iyer, head of marketing, Bigbasket. It had launched its operations in Madurai on Tuesday.

The company has set up a 22,000sq. ft. storage facility on Thondamathur Road here. "We will be initially provide services at locations falling within the 40km radius of the storage facility," Meera Iyer told TOI.

Besides procuring items from renowned brands, Bigbasket would also tie up with local mills for commodities such as rice, pulses, masalas, idly batter, appallam and other local food items.

As far as fruits and vegetables are concerned, Bigbasket has set up a collection centre in Palakode near Dharmapuri, where farmers come and sell their produce. "In the case of shortage or additional demands, we will also tie up with local vendors. We will also have exotic and organic vegetables. For working couples, we will offer cut vegetables," said Meera Iyer.

The online supermarket would also sell fresh and frozen meat. "To start with, we will have chicken, mutton, fish and pork. We are in talks with companies, which can sell fresh meat to us, and once we are through, we may have more items," she said.

"Besides fresh meat, bb will also have processed and frozen meat. We will also sell gourmet stuff," Meera Iyer added.

Long-term sustainable business model is vital, says bigbasket chief

Our Bureau, Business line | Nov 23, 2015

(From left) Hari Menon, Co-Founder and CEO, bigbasket.com; Ravi Viswanathan, President — Growth Markets and Head, Chennai Operations, TCS; and Anusha Shetty, CEO, Autumn Worldwide, at a MMA-KAS conclave in Chennai on Monday BIJOY GHOSH

CHENNAI, NOVEMBER 23: E-commerce companies should focus on building a long-term sustainable model and stop depending on discounts for attracting consumers, says Hari Menon of bigbasket, an online grocery provider.

Speaking at a Madras Management Association conclave on ‘Game Grows Bigger Social Web 3’, Menon, Co-Founder and Chief Executive Officer, bigbasket.com, said most of the companies spend 70-80 per cent of their funding on acquiring customers.

“Though buying customers is important in the beginning, continuing that as a business model is not sustainable,” Menon said.

Even as the companies are moving away from discounting, funding scenario is also changing. The investors are clamping down on funding as their inclination is shifting towards business models that will ensure profitability.

Menon said though it might reduce the growth rate and affect valuations, it will aid in strengthening e-commerce business.

Stating that the companies should correct the current model and focus on long-term sustainability, Menon said the time has come for e-commerce companies to concentrate on unit economics and to begin consolidation.

Apart from funding, companies will witness data analytics playing a bigger role in the way a consumer shops. “We call this 360 degree approach to analytics that will see what a customer does in a shopping website,” Menon said.

An analytical platform can track consumers’ shopping habits and capture transaction details. Based on the buying history of a consumer, the system will populate the data when he shops the next time reducing the time taken.

“This will help the customer to discover new items that are introduced by market players,” Menon said.

Ravi Viswanathan, President – Growth Markets and Head Chennai Operations, Tata Consultancy Services, said analytics breaks down the vast amount of information available on the internet and helps researchers make sense of that data.

“Analysing what data lies underneath will help profiling a consumer. This will aid companies to increase customer spending through ads and marketing,” he added.

Hectic lifestyles force companies to innovate with products

Namrata Singh, TNN | Nov 12, 2015

MUMBAI: When time is of the essence, habits change quite easily. Having understood that today's consumer is in need of getting the desired results, albeit in a shorter duration, marketers are innovating with products and services to cater to this time-strapped buyer.

While consumers are multitasking with buying groceries and hailing cabs on mobile phone apps, food is getting delivered at record time and household chores are increasingly being outsourced. At the same time, the traditionally 'wet-meal' consuming double-income households are shifting to dry meals, giving rise to a new 'quasi' meals culture. On-the-go packs of juices too are selling more than large in-home packs, indicating the shift in consumption patterns. What's more, even salons are whipping up new express services that significantly cut down the time required for a certain grooming procedure (hair colour, facial, mani-pedi) to cater to the new generation of 'busy' consumers.

If a consumer was earlier spending 40 minutes on getting her hair coloured, she is only too willing now to spend more if there is a significant trade-off on time. Salons like Lakme are developing express services in manicure and pedicure, 10-minute hair colouring (as against the processing time of 40 minutes for regular colouring) and certain premium facials done in shorter durations which are priced higher than regular facials.

"Time is the new currency. Customers are keen to get a great experience with efficient results, which are time-saving. We have introduced hair and beauty solutions that offer substantial outcome in relatively less time," said Pushkaraj Shenai, CEO, Lakme Lever.

A clear pointer towards convenience driving consumption behaviour is that almost 60% of online grocery retailer bigbasket's orders are coming through the app and nearly 65% of its customers are browsing the app today. "The natural shift to mobile shopping indicates that customers today demand superior products and services that are extremely convenient to avail. And the meaning of convenience is almost synonymous to saving precious time,'' said Vipul Parekh, co-founder, bigbasket.

bigbasket's internal analytics has seen a gradual decrease in the average time spent by consumers across its website and app before making a purchase. Customers are spending 3.6 minutes on an average today versus 5.5 minutes in June this year, before making a purchase.

Marketers have also spotted an opportunity in quick dry meals. According to Geetu Verma, executive director (foods & refreshment), Hindustan Unilever, there is an emerging trend towards quasi meals. "We have been a culture driven by wet meals (dal, sabji, roti or rice-sambar) — three times a day. However, given that the pace of life in urban India has become hectic, there is an easy quasi meal kind of culture that is setting in. So rather than a roti-sabji, you could have a roll or a wrap. Afternoon or out-of-home meals are moving towards quasi meals. This has given rise to opportunities where newer formats and products can come in," said Verma.

People are not only having quasi meals occasionally — quasi meals are seen to be replacing normal meals as well. "The more time people are out of home, the more meals become snacky," said Verma.

Take the case of Dabur's 200ml on-the-go pack of Real juices. It is said to be growing at almost three times the rate of the bigger in-home consumption packs of Real juice. "The rushed and time-pressed lifestyle that urban Indians are leading today has led to a demand for on-the-go and convenient breakfast and snacking solutions," said Sanjay Singal, marketing head (foods), Dabur India.

After many shutdowns, online grocery in India finally takes off

Athira A Nair | Sep 28, 2015

The world has changed radically for online grocery startups in India in the past few years. ?Three to four years ago the buzz was around grocery sites shutting down. Now, the survivors and new entrants are thriving.

The top five online grocery startups in India have raised over $120 million just this year. Four years ago, a number of startups had come up in this sector but most shut down pretty soon mostly due to lack of investment and customer base.

“Out of about 40 beginners, we are among the very few who survived,” says Hari Menon, Co-founder of bigbasket, which was founded in 2011.

Now bigbasket, along with other survivors ZopNow and Localbanya, and the new kids on the block like Grofers, PepperTap, and Jugnoo are expanding rapidly, launching in new cities, hiring new talent and raising fresh funds.

So, what changed

“The biggest change is the habit change of consumers—to buy grocery online. We are changing the way people shop for grocery,” says Mukesh Singh, Co-founder and CEO of ZopNow. The startup was founded in 2011 and had an inventory model. ZopNow changed this model earlier this year and now partners with hypermarkets to source products and is targeting over $80 million in revenue this fiscal. “The increased consumer traction has helped attract investment in this category which further accelerates the process.”

The food and grocery industry in India is now worth $383 billion and is expected to touch $1 trillion by 2020, according to a study by advisory firm Technopak. This is the market these startups are targeting.

Despite the large market size, experts like Arvind Singhal, Chairman of retail advisory firm Technopak, say the growth these startups have registered has been surprising. This is because grocery is a tough segment to crack online even globally. Poor execution had led many an e-grocer in the US–Webvan, HomeGrocer and PublixDirect—to bankruptcy in the last decade.

“This is a complex, execution-oriented business; understanding the execution and supply chain makes the real difference,” says Hari of bigbasket, the only major player that still maintains inventory. The company, the largest in this segment, operates in seven cities and is targeting $ 1 billion revenue by end of FY 2017.

Last-mile logistics and procurement are the two areas that complicate operations in this segment and each startup is tackling these challenges differently.

Bengaluru-based bigbasket is expanding its warehouse network and going to smaller towns. ZopNow’s new model has seen them partner with hypermarkets like More and HyperCity. Bengaluru-based ZopNow and its customers have real-time visibility of this inventory. ZopNow handles the pick-up and delivery.

The new companies have opted for a hyperlocal model. Grofers, which has raised $45 million in funding just this year, started out as a provider of on-demand delivery services to local stores. Late last year, the company launched its mobile app through which consumers can place their grocery orders.

“When we started off in 2013, nobody had built the logistics and supply chain needed for grocery delivery. Of course, to get here, we needed that initial e-commerce boom,” says Saurabh Kumar, Co-founder of Gurgaon-based Grofers, which fulfils orders by partnering with local stores.

The initial stages were tough as the e-grocers needed to educate and convince merchants of the advantages of coming on an online platform. Hiring and training the workforce—70% of which is delivery boys—was challenging too.

Inventory-model vs hyperlocal-model

Chandigarh-based Jugnoo and Gurgaon-based PepperTap too follow the hyperlocal model. Jugnoo, in fact, started out as a provider of auto-rickshaws on demand and then diversified into using this network to supply groceries.

Grofers, Jugnoo, and PepperTap are of the view that grocery deliveries for online players are more a logistics problem than a problem of procurement. “Hyperlocal is the way forward. The burden of inventory management is much reduced and it is more time efficient. The inventory model brings with it a limitation to scale,” says Samar Singhla, Founder-CEO of Jugnoo.

But Technopak’s Arvind believes that what will differentiate the leader from the rest of the pack is its ability to make an extra margin to cover the costs of infrastructure and logistics. For this reason, he believes that inventory model is the future. “Even the biggies will need dark stores or strategically placed stores of their own,” he says.

Rahul Chowdhri, Partner at Helion Venture Partners, which has invested in bigbasket agrees, “Delivery alone does not give enough margins to make a profit. Merely being a logistics firm does not help you beyond a point. Integration of backend services is very important.”

Localbanya’s Karan Mehrotra believes that hyperlocal is one part of the ecosystem. “You must build the product that best fits the market. Most recently, we started offering grocery shopping plans via subscriptions which have been well received by our customers,” says Karan.

Biggies enter the fray

Competition has increased for the online grocery-focused startups with biggies like Ola, Flipkart, and Amazon entering the space. However, the category-focused players seem unfazed. Jugnoo, in fact, looks at players in a similar space as potential partners. “We would love to do deliveries for Amazon at some point,” says Samar.

Also, there is a belief that just throwing money at the problem won’t work.

“We have tested and optimised our service in the last three years. Simply entering a market with brand and resources is not a factor for long-term success,” says Karan of Localbanya.

Logistics in grocery is a different beast. “Their (e-commerce biggies’) logistics and supply chain won’t help here. Their orders come to the warehouse, they plan and go. But groceries should be delivered immediately,” says Saurabh of Grofers.

Full steam ahead

All companies are rapidly expanding and the intent is to capture space in the wallets of as many consumers in the top geographies.

bigbasket is now in the process of creating three lines of business—the current full-service model; a one-hour service by two-wheeler, using the expertise of ‘Delyver’ which they acquired recently; and a marketplace for speciality stores by October in tier-1 cities. The company is also set to launch in smaller cities and already operates in Mysuru.

While not adopting different models for different cities, the companies have found the need for modifications in operational processes. For example, PepperTap’s catalogue has specific products according to the region: the catalogue in South India will have ready-to-cook idly-dosa batter. Tie-ups with local stores help this localisation, says Navneet Singh, CEO of PepperTap.

Even the hyperlocal companies who want to focus only on the logistics side have realised they will need some kind of warehousing. Grofers is now urging merchants to set up warehouses for them to speed up their procurement and delivery. “We now deliver within 90 minutes of placing the order. With more merchants, our travel time will decrease again,” says Saurabh.

Founders and experts alike believe the space is still evolving and we will see newer formats and models. Says Helion’s Rahul: “If today you walk-in and buy, tomorrow an organised retailer will let you order online and pick up offline tomorrow.”

Big Basket Earmarks Rs 100 Crore for Marketing in 2015-16

Devesh Gupta | Sep 28, 2015

Big Basket has released its debut television campaign with the Bollywood actor Shah Rukh Khan. Designed and conceptualized by Pentagon Communications, this campaign reveals the brand's fresh identity.

Founded in 2011, the online supermarket retailer, which claims to have 500,000 loyal customers across seven cities and clocks nearly 20,000 orders a day, is currently present in 27 cities and is planning to venture into tier 2 areas. As per the reports, Big Basket cracked a mega sale of Rs 250 crore last year. And now, with the launch of the latest debut campaign, the brand supposedly aims to clock higher revenues and far better sales.

We spoke to Vipul Parekh, Co-Founder, Big Basket and tried to understand why the company took so long to launch its first mass media TV campaign.

Q. What is the objective behind this television campaign? And why is Big Basket using this television medium now, nearly four years after launch?

Big Basket began operations in 2011 in Bengaluru and by 2012, we were present in Mumbai and Hyderabad. We stayed in these cities for a long time, but with only three cities of service, it was not right to go for a television campaign.

But today, we are present in seven cites, and are going to 27 cities by coming March. So amidst this rapid expansion, a television campaign will help us reach more people. Moreover, the cost of acquisition is also less on this medium, as local advertising mediums for each of these cities would have been extremely expensive for us.

Q. Why did Big Basket opt for a celebrity endorser? And why choose Shah Rukh Khan?

When we started thinking about the campaign, we didn't even think of a celebrity-based campaign. But while discussing the campaign, we arrived at the decision of launching one. However, we were very clear, that the endorser has to be someone like Shah Rukh Khan who has got a mass appeal or else we will go without a celebrity. SRK was an ideal choice because his popularity cuts across all age groups.

When we started operations, we initially focused on upper class or dual income working couple. But over the period, Big Basket has emerged as a mass market brand like a Spencers, More, or a D-Mart with the exception of being online.

Q. On the back of this campaign, the brand has also released its new identity. So, what was the idea behind the renewed identity?

There were two reasons. When Big Basket started, most of our traffic was primarily driven by desktop, but today we get 60% of our traffic from mobile. Seeing that the audience behavior is shifting from desktop to mobile, we felt that it is the time to change and create a brand according to the mobile audience. And as India is turning to be a mobile-first nation, we have to be with the times.

Q. Prior to this television campaign, what has been the marketing strategy for Big Basket?

We have been largely using print and radio. Now, we have added television to our portfolio. We use digital, also but offline push is stronger. Of the total marketing spends, we allocated nearly 20% to digital and rest to offline. This year, our marketing spends is to the tune of Rs 80 crore to Rs 100 crore.

Q. Isn't it ironic that you are spending less on digital despite being a digital brand yourself?

Grocery as a category is much different from other categories such as fashion, which has the target audience between 16 years and 40 years. Our target audience is between 27 years and 65 years. Though this age group is there on the Internet, they are yet not that digital-savvy as you'd like to believe. So, our ways of engaging with them ought to be different.

Q. Going ahead, what is the market size for the online grocery market?

The overall online grocery market is about a billion dollar in India. However, this is a small portion when you consider that the overall grocery market of the country is nearly $100 billion. We expect the online grocery market to grow to $20 billion market in the next three years. We believe that grocery is the single largest market in India and is much bigger than apparel, electronics or consumer durables put together.

Q. What are the category challenges for this business?

There are several key challenges in this market.

Firstly, since this is a food industry, so managing, perishability, expiry, quality and developing local supply chain is a big challenge. We had to acquire the domain knowledge of what one should buy, from where, in what quantity, and more importantly, understanding what drives the customer behavior in this category.

Secondly, logistics is very complex as we deliver large orders unlike a Flipkart or a Snapdeal that delivers only one or two items. Our average basket size is of 25 items, which includes frozen, liquid, chilled and perishable items. So, these need to be delivered at one time and in a proper manner as people do not like repeat or late deliveries.

Thirdly, it is a very people-intensive business like any e-Commerce player. It has a lot of blue collar workers, who are the face of the organization. So, we have to put in a lot of effort in training and building a staff.

Q. Are the local kirana (mom and pop) stores a threat to Big Basket?

Local kiranas are not the biggest challenge to the organized retail. Instead, these kirana stores are feeling the pressure from us as their inventory and variety is much less than us. They store only 500-1000 SKUs and we store at least 15,000 SKUs. So, our range, quality and price differentiate us from kirana stores who have not done very well in the physical space.

Q. Who are your competitors in this category?

We follow a unique model where we have our own inventory and thus, a large range. Other players such as Grofers, Localbanya and Pepper Tap are mostly hyper-local. They pick up from the neighborhood stores and deliver it. But they have to depend on the inventory of store they are associated with, and hence, sometimes they have to collect stuff from several stores to complete one order. It affects quality also. Many times such players are not delivering complete orders.

On the other hand, Big Basket delivers over 99% orders completely and we claim to return 50% of the price of the item that we did not deliver after promise.

Our average order size is between Rs 1,500 and Rs 1,600, which is 200% more than what others' deliver. This is only possible if one has a large inventory and a great range.

Q. What makes you think that entering tier-2 cities is a good proposition?

I would not say that tier-2 is a difficult market, but yes it is definitely a different market. The rhythm and need is different than what people want in the tier-1 markets. The need in the tier-2 markets is to deliver the same range and quality as we offer in tier-1.

Here the need is to get the product rather than offering convenience. For example, we have recently launched in Mysore, with over 50,000 products, similar to what we offer in Bengaluru. No other store in Mysore has a better offering in the grocery space than us.

We are planning to launch in more such cities and hoping to build a strong grocery brand there.

Online grocery store bigbasket ropes in Shah Rukh Khan as brand ambassador

Varun Jain, TNN | Aug 12, 2015

NEW DELHI: Online grocery store bigbasket.com has roped in actor Shah Rukh Khan as brand ambassador for an undisclosed fee. The company announced it through a series of tweets on Saturday.

"We've got a brand new look! Experience the all new Big-Basket!" the tweets said. This was followed by another— "Shah Rukh Khan is a bigbasketeer! What about you?"

Vipul Parekh, cofounder of bigbasket, declined to give the financial details of the deal. "The endorsement fee is under NDA (non-disclosure agreement), so I may not be able to give you an accurate figure. However, it is not as little as we would have liked and not as much as what everybody believes it to be," he said.

ET had reported earlier that actors Shah Rukh Khan, Aamir Khan and Amitabh Bachchan are learnt to charge .`8-12 crore annually for e-commerce endorsements, which is 20-25% higher than rates for some well-known offline brands they currently endorse.

"We have selected SRK because of his universal appeal, which cuts across age, gender and geography. For a mass market national brand like bigbasket, that was very important since we appeal to an equally wide audience," said Parekh.

"SRK has the ability to get into the skin of the character and embody it with a lot of believability. We felt it was important that people could relate to the bigbasket brand ambassador." The company is doing a campaign that covers all channels — print, TV, outdoor and radio.

"We will be breaking our television commercials featuring SRK next week and expect to make a significant impact on our business with them. We have a long-term contract with SRK which is renewable annually. We expect him to be a consistent brand icon for us," said Parekh.

E-grocer bigbasket eyes $1bn value, raises $50m

Boby Kurian & Samidha Sharma, TNN | Aug 12, 2015

MUMBAI: Online grocer bigbasket has raised $50 million (Rs 315 crore) from its existing investors led by Bessemer Venture Partners even as the Bangalore-headquartered startup has mandated Citigroup to raise $150 million (Rs 950 crore) from a set of new investors, people familiar with the matter said.

The fund-raising process currently underway - to propel forays into 50 tier-II cities - is expected to value bigbasket at $1 billion, sources added. The latest financing round from existing investors valued the country's largest e-grocer at about $400 million.

bigbasket said it would exit the current financial year with a revenue run rate of $400 million, a four-fold jump from the $100 million in August. "Our revenue run rate projection for the next financial year, FY17, is $1 billion," Hari Menon, CEO, bigbasket, told TOI.

bigbasket's private labels bring in about 33% revenue at the moment, which may touch 40% by the end of this financial year. This is crucial in bigbasket's valuation numbers as top internet investors pour over the company's books. Menon declined to comment on the specifics of the $200 million (Rs 1,260 crore) fund-raising, including the internal round from current investors.

bigbasket's fund-raise comes amid heightened activity in the express delivery category since the beginning of this year. Hyperlocal delivery startup Grofers claims to have clocked 4 lakh orders in July, a four-fold jump from June, having already raised $45 %million from Tiger Global and Sequoia Capital in a fast-%growing market.

Even the big e-commerce players are now drawing up plans to enter this space. In March, Amazon piloted 'Kirana Now' in Bangalore, while homegrown e-commerce major Flipkart is reported to be testing what it calls fQck.

A recent Goldman Sachs report suggested the domestic online retail industry is "evolving into a hyperlocal, on-demand market". India's e-commerce market is estimated to grow 15 times to $300 billion by 2030, the report added.

Menon, Vipul Parekh, V S Ramesh, V S Sudhakar and Abhinay Choudhari co-founded bigbasket in December 2011, when they were backed by Growthstory, the family office of serial entrepreneur K Ganesh. Its other investors include Ascent Capital, Zodius Capital and Helion Venture Partners. bigbasket operates in eight cities with operations being rolled out in Kolkata and Ahmedabad currently.

The e-grocer, which primarily caters to planned buying by customers, is launching a one-hour delivery service for top-up and emergency purchases. But bigbasket's biggest bet will be its forays into the next 50 cities, which has started with Mysore.

bigbasket to unleash 2-wheeler deliveries as hyper local model catches grocers' fancy

Sindhu Bhattacharya | Jul 28, 2015

New Delhi: The convenience of getting groceries delivered to one's doorstep is no longer good enough. Now e-tailers in the online grocery space are going a step further by adopting the hyper local model. This leads to shorter delivery times, brings in more efficiency into the whole bargain and these e-tailers get a bigger share of the customer's wallet.

The hyper local model seems to have caught investors' fancy too, with several such startups getting quick rounds of funding. So two trends are clearly visible now: First, new entrants into online groceries tie up with local kirana or established hypermarkets at the very outset and facilitate deliveries rather than owning a large inventory of staples. Second, the e-tailers already doing full service grocery are now also getting into hyper local models to cover the entire grocery value chain.

Take the case of ZopNow, which started three years back with an inventory lead model but has now transitioned to a hyper local store. It now promises grocery delivery within three hours, free of cost for any order size. Founder Mukesh Singh says the company's operations in four cities are expected to become profitable this fiscal; Bengaluru is already profitable. ZopNow has raised $10 million in funding till now and is looking at raising $40-50 million in the next round. It offers 1300-1400 SKUs (stock keeping units) for customers to choose from.

"For six months last year, we experimented between the warehousing and the hypermarket sourcing models since we wanted to expand beyond Bengaluru. So half the city was serviced from our warehouses and the other half by tying up with Hypercity. We realised that expansion to other cities will be more economically viable by junking the warehousing model wherein we owned the inventories. Operating warehouses is time consuming and requires more capital. Hyper local model works well for us now," Singh says.

So how is ZopNow different from the bigger online grocery stores which have not gone hyper local till now? These stores keep up to 10 times more SKUs but do not promise such strict time based deliveries. Most importantly, they carry their own inventories and sometimes manage their own delivery metrics too.

Navneet Singh, co-founder of Peppertap (another hyper local grocery platform), says his hyper local model has no warehouses of its own. "We use existing local stores as our fulfillment centres and in the process we help to get them online too". Peppertap gives a two-hour delivery guarantee and aims to bring the delivery time down to just 30 minutes within the next two years. Peppertap was started just six months ago and is already present in four cities with Singh claiming his company services 6000 orders daily. Peppertap has raised $1.2 million from Sequoia Capital last November, then $10 million from SAIF Partners and Sequoia together in February this year. It is obvious from this furious pace of fund raising that investors are also quite keen on the hyper local delivery model.

Shailendra Singh, MD of Sequoia Capital says "Hyperlocal is going to be the next big shift in the e-commerce space and grocery is a hot category that can grab a major chunk of this prevalent market. E-commerce 2.0 is hyper local commerce. On-demand fulfillment is a trend thanks to the proliferation of smart phone technology and escalating use of apps 24*7."

So what have the full service, bigger online grocery guys like bigbasket done to tackle the onslaught of the hyper local soldiers? Hari Menon, co-founder of bigbasket, says his company acquired one of the earliest hyper local grocery companies, Delyver, a month back and will use this acquisition to additionally do time-based deliveries.

The current model of bigbasket is full service - it has upwards of 15000 SKUs, owns its own inventory and delivers using four wheelers across multiple cities with deliveries done by staff.

Under the new vertical, bigbasket will set up 50 'Dark Stores' across six cities. Dark Stores are small stocking points, with just about 1000-1500 SKUs from where deliveries can be done quickly on two wheelers to nearby addresses. Menon says this hyper local model is starting out in Gurgaon in the next two weeks and will be implemented in six cities within a month, in eight cities by September. Under this model, bigbasket will promise deliveries in an hour.

Why does bigbasket want to compliment its full service model with this two wheeler very delivery model? Menon says typically, families buy most groceries in bulk orders by the beginning of the month but for topups, which happen almost every week, a visit to the local store is still required. This topup business is what bigbasket is eyeing by launching faster deliveries using a far smaller product store.

Does this mean consolidation is on its way as far as hyper local grocery platforms are concerned? Will the startups promising time-bound deliveries and sourcing from local stores ultimately merge into the full service ones like bigbasket? This is anybody's guess.

bigbasket attempts a Blue Apron in India

Online grocer to sell ready-to-cook meals, hawking pre-packed ingredients and freshly cut vegetables with recipes

Suneera Tandon, LiveMint | June 26, 2015

bigbasket has tied up with local food delivery start-up Chefkraft in Bengaluru to create HappyChef, a brand that will deliver gourmet salads and packaged portions of fresh ingredients of Thai, Mexican and Italian dishes along with recipes to its customers.

Online grocer bigbasket.com will now sell ready-to-cook meals, hawking pre-packed ingredients and freshly cut vegetables with recipes, in its latest offering to attract newer, younger consumers in metros looking for faster and more convenient forms of food consumption.

The concept, said a top executive at the retailer, is borrowed from American start-up Blue Apron, a $2 billion food delivery firm based in Silicon Valley. It ships portions of ingredients and vegetables chopped and packed to be cooked at home.

“We want to do what Blue Apron has done in America and no one has consolidated that space in the Indian market,” added Hari Menon, chief executive officer of bigbasket.com.

The retailer has tied up with local food delivery start-up Chefkraft in Bengaluru, to create HappyChef, a brand that will deliver gourmet salads and packaged portions of fresh ingredients (vegetables, meats) of Thai, Mexican and Italian dishes along with recipes to its customers who can prepare the meals at home.

For the first month, bigbasket.com, which has so far raised about Rs.370 crore from investors such as Helion Ventures and Zodius Capital, is looking at at least a 100 deliveries a day, a 2% conversion rate of its grocery orders in Bengaluru that are estimated at 6,000-6,500 a day.

Food delivery start-ups such as Chefkraft in south India and Cookfresh in Delhi have emerged in dense pockets of the country where young, middle-aged, working individuals are willing to outsource such services at a cost.

The market for out-of-home consumption of food is pegged at Rs.6,000 crore.

The concept that started in Bengaluru, will be replicated in Mumbai over the next month, as Menon recruits more such start-ups, specially in the National Capital Region to service the six cities it sells groceries in.

It will initially sell ingredients for cuisines such as Italian, Chinese, Mexican, with dishes such as cranberry and pear salad, lamb burgers with garlic curry mayo, lentil tacos with tahini yogurt among others, priced at Rs.260-600. Indian dishes will soon be inserted in the menu. “It clearly looks like a niche segment that might generate consumer interest, say over the weekend,” added Raja Lahiri, partner (advisory services) at Grant Thornton.

Take Sahiba Singh, a 29-year-old professional choreographer in Bengaluru, who would on occasion indulge in such a cooking exercise, as long as the cost benefit is intact. “I would love to, just so I can avoid going out and shopping for the ingredients,” she added, “but I would compare the cost of eating out versus cooking in.”

According to Lahiri, the ready-to-eat category sees far more adoption, but Menon is not keen on that market, since he feels it is too crowded.

bigbasket, India’s Largest Online Grocer, Expands Its On-Demand Delivery Service

Catherine Shu, techcircle.com | June 15, 2015

bigbasket, India’s largest online grocer, is boosting its logistics network to compete with companies that offer very fast deliveries. The Bangalore-based company, which was founded in 2011, will open ten new warehouses in each of the major cities it serves (Bangalore, Hyderabad, Mumbai, Pune, Chennai, and Delhi), as well as 50 smaller towns.

This may help bigbasket ward off competition from hyperlocal startups like Sequoia-backed Grofers and PepperTap, which are smaller but expanding rapidly and offer deliveries in less than two hours.

bigbasket currently offers four delivery slots throughout the day of an hour and a half each, with same-day delivery is available for orders placed before noon.

The rise of hyperlocal food delivery startups is fueled by India’s highly fragmented retail market, where the vast majority of stores are family-owned and few major players dominate. Hyperlocal startups make it easier for customers to do their regular grocery shopping and competition means that companies like bigbasket will have to either offer increasingly short delivery times to keep up or consolidate with other players.

Last week, bigbasket acquired Delyver, a hyperlocal food delivery startup also based in Bangalore. While the two companies will maintain separate operations, bigbasket can now use Delyver’s fleet, which promises delivery within an hour in almost 40 Bangalore neighborhoods.

bigbasket founder and chief executive officer Hari Menon told the Economic Times that its new warehouse will allow the company to expand its business model. While most of its orders come from people doing their regular grocery shopping, bigbasket’s smaller warehouses called “dark stores,” will be able to handle smaller, last-minute purchases more efficiently.

In smaller towns, bigbasket’s dark stores will enable shoppers to receive purchases overnight. The company plans to expand into Mysore, Coimbatore, Madurai, Trichy, and Vizag starting next week.

Unlike Grofers and PepperTap, which partner with small local stores, bigbasket carries its own inventory, which is a more expensive business model but gives the company greater control over its products. According to Crunchbase, bigbasket has raised $35.8 million in funding so far.

Big-Basket buys Delyver in a cash-and-stock transaction

bigbasket will use the Delyver fleet to reach orders within 90 minutes, directly competing with other delivery platforms including Grofers, PepperTap and Local Baniya.

Aditi Shrivastava, ETRetail.com | June 12, 2015

BENGALURU: Online grocer Big-Basket has bought logistics provider Delyver in a cash-and-stock transaction as it seeks to strengthen its capacity to deliver in quick time to customers across 50 cities and compete with a slew of nimble rivals. Company executives declined to reveal the value of the transaction between the two startups which are both backed by serial entrepreneur and investor Krishnan Ganesh.

bigbasket will use the Delyver fleet to reach orders within 90 minutes, directly competing with other delivery platforms including Grofers, PepperTap and Local Baniya. "We will retain the brand name and use their two-wheeler fleet to do hyperlocal deliveries across all cities," said Hari Menon, CEO of bigbasket which has received over Rs 300 crore of funding in the last eight months. The company's invest ors include Bessemer Venture Partners, Helion Venture Partners and Zodius Capital. It was valued at Rs 1,400 crore during its last round of fund raising in January. Delyver has so far raised an undisclosed amount of funding.

bigbasket to tie up with 1,800 grocery stores in private-label push

Firm to launch products in categories that see more repeat purchases and where it can ‘create a differentiation’

Sayan Chakraborty, LiveMint June 9, 2015

The big private-labels push will also entail expanding bigbasket’s 40,000 sq. ft Bengaluru warehouse to 75,000 sq. ft by August. Photo: Hemant Mishra/Mint

Bengaluru: Online grocery store bigbasket will tie up with about 1,800 grocery stores to sell its private-label products across categories such as vegetables, staples and bakery in a move aimed at increasing revenue four-fold and improving profitability this financial year.

The company sells fruits, vegetables, meat and bread under the brand name Fresho and staples under the Popular and Royal brands through 250 stores, apart from its website. It aims to close 2015-16 with revenue of Rs.800 crore as against Rs.210 the previous year.

Retailers do not manufacture private-label products. These are made by a third-party manufacturer exclusively for a retailer.

bigbasket, which started operations in Bengaluru in December 2011, also plans to expand its private-label portfolio; typically private-label products have gross margins between a fifth to a third higher than other products. The company will launch its coffee brand on 15 June, and follow with flavoured tea and cookies. Private-label offerings account for about 35% of bigbasket’s revenue.

bigbasket’s CEO Hari Menon said his company will launch products in categories that see more repeat purchases and where it can “create a differentiation”.

The big private-labels push will also entail expanding the company’s 40,000 sq. ft Bengaluru warehouse to 75,000 sq. ft by August. According to retail advisory firm Technopak, Indians spend around $370 billion a year on food and groceries. Experts say private labels seem to be made for e-commerce. “Besides earning higher margins, online stores can also run promotions on private brands as they earn more on such products,” said Anand Ramanathan, director at KPMG Advisory Services.

Still, not every company has the scale to run a successful private-label business. An aggressive push on private labels may antagonize other suppliers and brands.

“Until you stop selling all other brands and sell only private labels like a Marks & Spencer does, it does not add much value in the early stages,” said Harminder Sahni, managing director of advisory firm Wazir Advisors. “You also compete with other suppliers on your platform and antagonize them.”

bigbasket is present in six cities—Bengaluru, Hyderabad, Chennai, Delhi, Pune and Mumbai—and will expand to 50 more by the end of this financial year. The 50 new locations will be categorized into clusters, each comprising 5-6 cities around six central locations. Products will be transported to the clusters every day from the central locations.

Co-promoted by serial entrepreneurs K. Ganesh and his wife Meena Ganesh, bigbasket is the most well-capitalized among all domestic online grocery stores. The company has so far raised about Rs.370 crore from Helion Ventures, Zodius Capital, Ascent Capital and LionRock Capital in a sector that has attracted more than Rs.750 crore from investors in the past 18 months.

Grofers, an app-based service, has raised more than Rs.270 crore in 2015 while ZopNow and PepperTap have raised Rs.62 crore each. The space is expected to become even more competitive with taxi-hailing services Ola, which has raised more than Rs.3,700 crore since October last year, launching a pilot for its grocery business in early June.

After metros, bigbasket sets it sight on tier-II cities

Plans to launch in around 50 smaller cities in a year's time; to launch pilot from Mysuru this month

Surabhi Agarwal, Business Standard June 8, 2015

Hari Menon, chief executive officer of online grocery retailer bigbasket.com, is in a hurry.

As he speaks over phone, he says there is a huge backlog of emails for him to vet, and speaks so fast, it gets difficult to keep pace.

The reason is clear. The Bengaluru-headquartered entity, launched in December 2011, began operations in the National Capital Region, Pune and Chennai last month and would soon be expanding into Ahmedabad and Kolkata.

And, it is ready with a plan to go deeper into the country, by expanding into tier-II cities. It looks at using its existing warehouses in the eight large cities where it already has a presence to cater to the neighbouring smaller ones.

Menon said the first of this model would be flagged off on June 15 from Mysuru and gradually extend to Coimbatore, Madurai and Trichy in Tamil Nadu, and Vijayawada and Visakhapatnam in Andhra. “Over the next 12 months, we want to reach 50 smaller cities,” he told Business Standard.

The company follows a hub-and-spoke model for the metros, to be put into play for expansion into smaller cities as well. For instance, it has a large warehouse in this city at Dwarka in the southwest, which caters to orders from Delhi and also supplies to the two smaller hubs in Noida and Gurgaon.

For last-mile delivery, bigbasket has a fleet of mini vans that deliver groceries and vegetables under a time slot chosen by the consumer.

The consignments go to the hubs two times a day and are redistributed via the smaller delivery vehicles through an automated algorithm, which assigns tasks for the vans based on orders and the clusters. Each vehicle delivers up to nine orders in one slot. The consumer has the option to choose from four time slots, two in the morning and two in the evening.

Menon, who terms the response in Delhi the best so far, says bigbasket is delivering almost 11,000 orders each day in the region, despite the fact that the operations were launched only three weeks ago. “What would have taken us eight to 12 months elsewhere we have hit in the third week itself,” he said. He attributes this to the company’s strategy to start marketing from day one as compared to previous launches, where the firm took time to fine-tune operations before launching the consumer campaigns.

It is also deploying what it has learnt from previous launches, helping to scale up faster. For instance, Menon reveals in its initial days, bigbasket was combating a perishability challenge. A significant portion of the goods it delivers — fruits, vegetables, milk-based products, confectionery — have a low shelf life. The company addressed that issue with freezers and chillers at each stage of its procurement, processing and delivery. Its warehouses have three large cold rooms with three varying temperature chambers — +5, -5 and -25 degrees (for ice-creams). Vehicles in which the last-mile delivery happens also have DC-powered chillers and freezers. An order takes a maximum of 2.5 hours to get delivered, to ensure against any thawing. “In that sense, we are the closest to the ‘farm to fork’ concept,” said Menon.

Menon’s biggest challenge is personnel. It has around 1,800 people, about 70 per cent being blue-collar workers. The company is looking at sourcing 500-1,000 people from tier-II cities and looking at options to provide subsidised accommodation and food to attract and retain them.

bigbasket aims to close this financial year with a revenue of around Rs 1,000 crore. It raised about Rs 200 crore last September from investors, including Helion Ventures and Zodius Capital. Menon said the Bengaluru operations were already in the green.

“We expect the overall company to be profitable in about 24 months.”

PLANS AHEAD

• Plans to enter Kolkata and Ahmedabad soon
• To use existing warehouses to cater to the neighbouring smaller ones — model to be flagged off from Mysuru
• Will gradually extend to Coimbatore, Madurai and Trichy in Tamil Nadu, and Vijayawada and Visakhapatnam in Andhra
• Expects the company to be profitable in about 24 months

Online grocer bigbasket plans to work with offline partners to secure its delivery dominance

Aditi Shrivastava & Evelyn Fok, ET Bureau Apr 6, 2015, 05.35AM IST

Online grocery retailer bigbasket.com today announced the availability of its services in Pune with the opening of a central warehouse. This is the fourth city after Bangalore, Hyderabad and Mumbai to have this facility. In the coming months, the company expects to establish its presence in Chennai and the National Capital Region.

"With launch in Pune, we have now begun the process of being a national player. From procurement to warehousing to delivery, a fleet of delivery vans and a team of 500-plus people manage everything in-house. Same day delivery has now become a necessity for today's time-strapped customers and we expect most of our customers to use this service consistently. Groceries can also be ordered on smartphones via bigbasket app available for Apple and Android devices,” says Seshu Kumar, national head, merchandising, bigbasket.com.

Currently, it has a customer base of 3.5 lakh with an order growth rate of 30 per cent every month. With a catalog of over 10,000 products, the brand offers products in categories such as fruits, vegetables, rice, spices, meat, beverages and personal care.

It has tied up with local transporters for delivering goods and currently has 12 delivery vans.

The company has targeted sales of $ 1 billion by end of 2018. It sources most of products locally and has tied up with local vendors for grocery products. According to Seshu, fruits and vegetables are the most frequently ordered products. Started in December 2011, bigbasket.com runs its own end-to-end logistics.

From procurement to warehousing to delivery, a fleet of their own delivery vans and a team of 500-plus people manage everything in-house. The company has raised $ 32.8 million in funding. This series B round of funding has come in from Helion Venture Partners and Mumbai based Zodious Capital.

The grocery market in India is worth an annual $10 billion and is growing by 7-8 per cent. bigbasket competes with other online Localbanya.com and MyGrahak.com. bigbasket is co-promoted by serial entrepreneur K Ganesh and Meena Ganesh.

bigbasket.com expects to break-even in 36 months

The company expects to reach a turnover of Rs 1,800 crore by 2016-17

BS Reporter | Chennai March 6, 2015 Last Updated at 20:38 IST

Private equity-backed online grocerer bigbasket.com is targeting an over seven-fold jump in sales to Rs 1,800 crore in the next two financial years.

The company expects to clock Rs 1,800 crore turnover by 2016-17, said Hari Menon, CEO of bigbasket.com, who had launched its services in Chennai.

The online retailer expects to end the current fiscal with a turnover of Rs 250 crore. For the next two fiscal years, it is targeting an increased turnover of Rs 800 crore and Rs 1800 crore, respectively, relying on the huge market potential, said Menon.

In the process, it hopes to achieve operations-level breakeven in the next three years.

The company has a same-day order delivery in cities such as Bangalore, Mumbai, Hyderabad and Pune and had launched operations in Chennai by setting up a central warehouse and processing centre in the city.

Menon said at the city level they would achieve business breakeven much earlier than anticipated.

It has an over 10,000 product range, including fresh fruits and vegetables, grocery and staples, personal care, home and kitchen products. Prices are fixed similar to the brick-and-mortar shops or slightly lower.

It is expected to launch its services in the National Capital Region this month, followed by Kolkata in the later part of the calendar year. The company claims it had a customer base of more than 450,000 with a monthly order growth rate of more than 30 per cent. It is also looking at launching a data analysis business, Brand Intelligence, to offer information related to customer trends related to brands.

bigbasket.com had raised around Rs 400 crore in three rounds of funding, including from Ascent Capital, Helion Venture Partners, Zodius Capital and Bessemer Venture Partners.

Grocery etailer bigbasket finalising new round of financing; to bring in
Rs 100 crore

Madhav Chanchani & Aditi Shrivastava, ET Bureau Jan 19, 2015, 11.44AM IST

BENGALURU / MUMBAI: bigbasket, India's largest grocery etailer, is finalising a fresh round of financing that is expected to bring in $15-16 million (about Rs 100 crore) to the company as it looks to expand its food services business and cover more cities.

Silicon Valley-based venture capital firm Bessemer Venture Partners is likely to lead the new round, which is expected to see the valuation of the company cross Rs 1,400 crore, four people involved in the deal told ET.

"The round with Bessemer closed in the last week of December," said one of the people, who spoke on the condition of anonymity.

"Even though bigbasket has enough cash in the bank, the val uations and attention it's getting from investors is making it raise more money ." The deal will make bigbasket one of the most valued vertical players in the segment after fashion etailer Jabong, which is pegged at over $500 million or more than Rs 3,100 crore.

The development comes af ter bigbasket raised Rs 200 crore from Helion Venture Partners and Zodius Capital in September 2014. "The deal is mostly an extension of the previous round. Bessemer has committed to invest more in the company ," said another person.

Other investors include LionRock Capital, Ascent Capital and serial entre preneur K Ganesh's star tup factory GrowthStory.

The company had raised a total of Rs 278 crore in funding before this transaction.The official announcement may be made after a few more new investors come on board, a third person said, adding: "bigbasket has exceeded all revenue and growth targets it set for itself and without spending too much cash on customer acquisition. This makes it an attractive opportunity for investors. "An email sent to bigbasket cofounder and CEO Hari Menon did not elicit a response till late Sunday evening.

Bessemer's India managing director Vishal Gupta declined to comment on ET's queries.

essemer Venture Partners has backed companies like Snapdeal and TaxiForSure in the country. Its US portfolio includes Blue Apron, one of the largest ready-tocook meal delivery service players.

bigbasket, which operates in Bangalore, Mumbai, Hyderabad and Pune, plans to venture into Delhi and Chennai in the coming months. It handles more than 6,000 orders a day on its peak days, with Rs 1,500 per order on average, indicating an annualised gross merchandise value (GMV) of about Rs 200 crore. The company's founders - VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari - had given grocery etailing a shot in 2001 when they founded Fabmall. But they soon turned it into an offline retail store chain, which was acquired by Aditya Birla Group in 2006. "We were able to do the due diligence without meeting the CEO, which is very rare," said an investor who backed the company last year.

Among the factors that work in the company's favour is that its competitors including EkStop, LocalBanya and ZopNow have not been able to expand beyond their single cities yet. While organised retailers make up only about 2% of grocery sales in India, the market is expected to grow 118% to $847.9 billion (about Rs 52 lakh crore) by 2020, according to food and consumer research firm IGD. This underlines the attractiveness of the sector for entrepreneurs and investors.

Several brick-and-mortar retailers such as Aditya Birla Group, HyperCITY, Spencer's, Reliance and Trent have been expanding in grocery etailing, but these firms together accumulated losses of more than Rs 13,000 crore in 2013-14, according to credit rating agency Crisil. While Reliance has launched online grocery delivery in Mumbai, others are looking at this channel.

Private labels could be the key to profitability as bigbasket has found out, with this category accounting for 40% of its sales in fruits, vegetables and meat. "Globally , major retailers generate 20-30% revenues from private labels. In India the proportion is currently negligible," said Crisil report.