Ever since the lockdown began on 26 Mar. ‘20 across India following the ongoing Covid-19 pandemic, there has been a dramatic shift in the way India shops, especially filling the kitchen and pantry. Not only were Indians getting used to shopping from home, there has been a huge leap in the digital ordering process of groceries. Many start-ups have built their businesses during this period. The biggies such as Amazon, Flipkart & Big basket on the other hand just got their businesses more refined, sharper and focussed. Last mile delivery platform Dunzo, which had just commenced operations a year before the pandemic fully spread, has scaled massively to become a leading player in the hyperlocal delivery business. BlinkIt, formerly Grofers, joined hands with Zomato while Swiggy has gone ahead to build a strong backend through InstaMart. Zepto, the youngest and latest kid in the block has redefined Quick-Commerce by offering deliveries in 20mins or less.
Big Basket, the pioneer in Grocery delivery began its journey in 2012 in Bangalore. Over the years, the company faced a number of challenges and eventually was acquired in 2021 by the Tata Group at a valuation of USD 2 Bn, giving away a majority stake to the powerhouse. Tatas already run Star Bazaar, an offline grocery retail hypermarket chain along with other retail verticals in fashion, electronics, etc.
For FY 21-22, Big Basket grew its revenues 17% over the previous year to reach Rs. 7,098 Cr while its expenses grew 26% to Rs. 7,931 Cr. Though the company raised Rs. 173 crores of advertising revenues through placing Ads in its app, it’s biggest expenditure was cost of goods which was Rs. 5,807 Cr. To compete with the Q-commerce companies, the company launched BB-Now by which it could deliver goods in 20 mins while it already had another model called bb Express which was a same-day delivery platform. Its original business model was inventory-led with deliveries run through a smart algorithm program which clubbed orders in the same pin code or their vicinity on the same day or next.
Tata NEU is the super-app which the group has launched where all its verticals participate. Users win Neu coins which is akin to a loyalty program and one can use these coins against future purchases. It is to be noted that the Tatas acquired India’s oldest serving airline, Air India, which was originally founded by the group patriarch JRD Tata. Other than this, the company also operates Air Vistara in association with Singapore Airlines and has a strategic partnership with Air Asia. From salt to steel to grocery to aviation, Tatas are having access to the way millions of Indians consume – everything from the kitchen to 35,000 ft above sea level. It would be interesting to see how Big Basket gets merged with the other entities and becomes a success story, just the way the group has built various business over the past several decades.