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BigBasket.

com (Innovative Retail Concepts Private Limited)



Introduction : Life is changing very fast. People used to be more traditional but now
they have become more professionals. They are ready to spent money in order to live a
convenient life. Internet has made very drastic change in ones life. People working in
MNs have no time to go and shop for their basic needs. Taking this as an opportunity !
entrepreneurs started e " commerce business which is also known as bigbasket.com. It is
portal through which you as customer can buy all the basic goods which are re#uired in
day to day activities.
$ig$asket.com %Innovative &etail oncepts Private Limited' is Indias largest online
food and grocery store. (ith over )*+*** products and over a )*** brands in our
catalogue you will ,nd everything you are looking for. &ight from fresh -ruits and
.egetables+ &ice and /als+ 0pices and 0easonings to Packaged products+ $everages+
Personal care products+ Meats " we have it all. They have a wide range of options in
every category+ e1clusively handpicked to help the customers ,nd the best
#uality available at the lowest prices. (e need to select a time slot for delivery and order
will be delivered right to your doorstep+ anywhere in $angalore+ Mumbai 2 3yderabad.
4ou can pay online using your debit 5 credit card or by cash 5 sode1o on delivery. They
guarantee on time delivery+ and the best #uality6
History : In /ecember 7*))+ . 0 0udhakar+ 3ari Menon+ .ipul Parekh and . 0
&amesh launched $ig$asket in $angalore. The idea was seeded by
serial entrepreneurs and angel investors 8rishnan and Meena 9anesh. This wasn:t
the founder team:s ,rst e;commerce venture. In )<<<;7***+ it had started a
company called -abmart. The $angalore;based ,rm sold various products online ;
music+ books+ groceries+ etc. 3owever+ given the low internet penetration in India
at that time+ the venture failed. In 7**=+ -abmart was rebranded as -abmall and
launched as an o>ine grocery store. 0ubse#uently+ it was ac#uired by the ?ditya
$irla group and is now called More. The online entity was ac#uired and merged
with @0;based IndiaplaAa. 0ince 7*)7+ $ig$asket has been present in 3yderabad
and Mumbai. (ithin a year+ the company started services in /elhi and hennai as
well. 0ubse#uently+ it will also cater to Pune+ ?hmedabad and 8olkata. B(e e1pect
to be present in )* cities in ne1t three years+B says Parekh+ co;founder and head
%marketing and ,nance'+ $ig$asket. urrently+ $ig$asket has a !**;strong team
across three cities. $ig$asket has started delivering perishable items+ too.
ompared to other e;commerce segments+ here+ it is critical to hit a minimal
basket siAeC else+ you end up with negative contribution margins+ says Navin
3onagudi+ investment director at 8ae apital.
Working odels : The company has two working models . (hen they started
the business they had the Dust;in;time model. This means that not Dust perishables
but everything they bring against an order. $ecause you dont yet have the
volumes for suppliers to supply in bulk and for you to stock in a warehouse. 0o
you consolidate orders for the day+ go and buy the products and deliver. (hen
you reach a particular volume+ you move from the Dust;in;time model to what is
called the warehouse stocking model. That is where they are as far as $angalore
is concerned. They now buy products directly from the supplies+ like @nilever and
Procter 2 9amble+ they buy from farmers and mills and stock the products in the
warehouse. They stock a certain number of days of sales+ depending on the
product and sales. They are able to set initial inventory levels and then decide
what the re;ordering levels are. 0o it is all completely automated. They buy
directly from the manufacturers or suppliers and add a margin to the product
price before selling. ?t a mature stage+ the blender margin stands at 7*;7E per
cent.
The company:s uni#ue selling point lies in its range of products+ both in fresh
and froAen categories. They have signi,cant e1perience in own;branded products
and that helps keep a check on #uality. Their delivery track record is strong ;
<<.<< per cent orders are delivered on time+ else they refund )* per cent of the
order cost to the customer:s account. They also track the delivery and update the
customer of the status. ?lso+ if the company cannot ,ll an item+ it refunds one and
a halftimes the item value back to the customer. If a product is returned+ the
money is refunded.

In!rastructure : It is not necessarily very infrastructure;heavy. Fne of the things
that they invest heavily in is technology. The only area where they have
infrastructure is essentially is in warehouses. urrently they are in a )*+***
s#uare feet warehouse and are moving into a 7!+*** s#uare feet warehouse in
the ne1t couple of months. In the warehouse they have e#uipment that helps us
pick products against an order. It is all completely automated. They use handheld
devices that allows the picker to choose the right product. Fn the delivery side
they have vehicles but again these are not infrastructure;heavy because we lease
them or you can outsource the entire Geet. $ig$asket has a warehouse each in
$angalore+ 3yderabad and Mumbai+ as well as hubs %where delivery vehicles
wait'. 9oods are sent to hubs and from there+ to customers. The routing is done
automatically and the vehicles are 9P0;tracked. Hach city is split into Aones and
each Aone has a hub.
"unding I Initially+ venture capitalists weren:t very comfortable with the business
model. Fften+ they drew parallels with (ebvan+ a @0;
based online grocery store that lost a reported JK** million %about &s L+KK* crore'
in venture capital and initial public oMering proceeds before being shut in 7**).
In -ebruary 7*)7+ $ig$asket raised J)* million %&s !) crore' from ?scent apital
in series;? funding.
9rocery is a J)!*;billion %&s <N!;crore' opportunity+ where the online model
could potentially be a scalable and capital eOcient to overcome many challenges
organised retail faces. The success of Fcado and Tesco in the @8+ 4ihaodian in
hina and -resh/irect and ?maAon -resh in the @0 pointed to an emerging
untapped opportunity.B
"uture Pro#ections: They have a very bright future ahead because they have
identi,ed the needs which will rise and they have made plans to adopt those in order
to survive in this competitive world. ?s we know young generation is more health
conscious so they are planning to add organic food in their portfolio+ pesticides free
fruits and vegetables. Though they may be bit e1pensive but will have a huge
demand. Not Dust that they planning to keep freeAe foods in their cart so that people
can order the same and eat the same without spending much time in cooking it. They
are also planning to add international brands in their kitty. ?lso+ planning to e1pand
their business in diMerent cities like Mumbai etc. $y doing the same+ they will increase
their brand value+ revenues and pro,ts would automatically increase.
C$allenges :
Fne thing that has not changed in all these years is the ineOciencies in the supply
chain.
$ut that is a universal challenge. There are other challenges which are speci,c to their
online format.
)' Puality ontrol pick errors ; The picker picks and packs the wrong product. 3owever+
this has now been addressed. They have invested in special scanners which record the
order and if the picker scans the wrong product
7' The second and most pressing is to get ,ll rates right+ which currently stand at <*;<E
percent for $ig$asket.com. Qonsumers are e1pecting to get a )** percent ,ll rate and
that puts pressure on them. People buy online for convenience and even if one item is
short+ they dont mind purchasing everything o>ine.
=' 0uggesting alternatives for stock;outs and at present+ $ig $asket.coms platform
doesnt have the intelligence to do so. -or the time being+ its tackling the issue by
mentally preparing customers before delivery. Not surprisingly+ the company has
invested heavily in technology+ especially for back;end logistics. ? routing software helps
them divide the number of orders serviced by each van+ which are ,tted with 9P&0
systems to monitor movement in real;time.
%W&' ()(L*%I% &" BI+ B(%,-'.C&
() %'R-)+'H%:
(.) 3uge investment capacity+
(/) onvenience for ustomers+
(0) 3igh Puality Products+
(1) Low inventory cost+
(2) Low delivery charges+
(3) 9ood relationship with 0uppliers+
(4) ustomiAation+
(5) loser working relationship with customers+
(6) ? vast variety of stuM available+
%.7' an be start with very low investment.
B) W-(,)-%%-%:
(.) No economies of scale+
(/) Limited -inancial &esources+
(0) Lack of staM+
(1) (eak brand name+
(2) 0ometimes the transportation cost increases the product cost.
(3) Number of potential customers who can buy through Internet is not still enough.
C) &PP&R'8)I'I-%:
(.)H1panding Fversea+
(/)Product e1tension+
(0)0trategic ?lliances+
(1)Licensing+
(2).enture capitalists+
(3)Hveryday number of Internet users is increasing in a rapid way.
9) 'HR-('%I
(.)ompetitors go online+
(/)hanging 9overnment policies.