The Economic Times daily newspaper is available online now.

    Big dreams for Big Basket: Aiming to double turnover to Rs 1,200 cr in 2016

    Synopsis

    "Grocery is not an easy category to work with. Delivering perishable items, managing same-day delivery targets for a wide range of products and providing uninterrupted inventory supply becomes the key to building the right kind of customer satisfaction in this business."

    ET Online
    Name of the Company - Big Basket
    Founder/CEO's Name - Vipul Parekh, Hari Menon, Abhinay Choudhari, Sudhakar VS, Ramesh VS
    Funding Raised in 2016 - $150 million
    Overall Funding Raised Since Starting Up - $243 million
    Growth - 326%
    Revenue - Rs 667 cr (FY16)
    Jobs Added - 6500 (FY 16)
    Location - Bangalore
    Industry - Online grocery
    Launched - 2011

    Grocery shopping is mundane and regular with absolutely no excitement attached to it. Long queues, parking woes and even wailing babies mean you cannot find comfort in the confines of a supermarket. With about 400 million people living in urban India, grocery shopping going virtual made sense. With more and more businesses entering this ecommerce space, one player has distinctly led the pack.

    Started in December 2011 by Vipul Parekh, Hari Menon, VS Ramesh, VS Sudhakar and Abhinay Choudhari, Big Basket today has over 18,000 products in its catalogue, including fruits and vegetables sourced directly from farmers.

    Explains cofounder Parekh, "Grocery is not an easy category to work with, especially from a supply-chain perspective. Delivering perishable items, managing same-day delivery targets for a wide range of products and providing uninterrupted inventory supply becomes the key to building the right kind of customer satisfaction in this business." But, the grocery player has little to worry about. Its progress has been hard-won with about 2.5 million customers on its platform today, compared to just a few thousand when it started off - that is, from about 100 orders a month at the outset, it is now closing close to a million orders for the same period.

    Read the full ET SmallBiz State of Startups 2016 report here

    Storing credit
    Whether this has anything to do with its inventory-led model is contestable, but it is impossible to ignore this case in a market where Big Basket is the only player which maintains its own warehouse over others that typically run on hyperlocal models.

    "Having our own inventory allows us to guarantee better control over the customer experience," says Parekh. "We have seen significant growth in business on the back of this model and hence will continue to work around this," he adds.

    According to Parekh, Big Basket has been growing between 200 to 300% every year. Compared to the first year of operations when revenue was about Rs 2 crore, last year the company clocked Rs 650 crore. In fact, the company is aiming to cross Rs 1200-crore turnover mark by the end of this year, as it will expand to 25 cities.

    Ka-ching!
    "We have raised four rounds of funding starting with the $10 million Series A in January 2012 to the latest round of $150 million in March this year," explains Parekh. "These funds are broadly being deployed in three places - supply chain network, technology and marketing. We have constantly tried to maintain and upgrade our warehouses and collection centres to match up with our logistics and delivery services. Building the technology that allows such seamless functions to run also requires a lot of resources. Lastly, it is also important to market a product well to get customers to use them," he adds.

    "The sector was at a very nascent stage five years back when we started off - even globally. In hindsight, I do not think many believed that people would actually buy groceries online," he says. But the online grocery delivery space in India has come a long way since its days of inception, following global trends where there have been some successful businesses running worldwide including Alibaba in China and Amazon in the US. "It is a promising industry and one that I believe could even be worth $50-60 billion in the next five years," he signs off.
    SIDBI MSME Conclave 2024 |Register Now.
    ...more
    The Economic Times

    Stories you might be interested in