REPORT ON

BIG
BASKET

Aswath R Mahadev
Jaideep Ghosh
Nikhil Kulkarni
Tarun Budhrani
Vikram T Prakash
 INTRODUCTION

In today’s emerging global economy, E commerce has progressively become a strong catalyst
for economic development as well as a necessary element of business strategy. E-commerce
owes it success, acceptability and swift penetration to its inherent flexibility. It offers a
seamless way for business to meet the challenges of the ever-changing environment. This
section of today’s market has evolved over the years to become a major channel through
which businesses can exchange goods and services, coordinate production and market to
customers. By harnessing the power of the internet, electronic commerce has changed the
way in which organizations conduct business. The ever-increasing sophistication of websites,
intranets and extranets has led to advanced web applications being used to address the needs
of customers.

What is BIG BASKET?

BigBasket is an Indian online grocery and fresh produce provider, founded in 2011 and
headquartered in Bengaluru. They sell fresh fruits and vegetables, meat and dairy, groceries,
personal care and household items through its website and mobile apps directly to customers
and also to businesses. In 1999, the founders of Big Basket, Hari Menon, Abhinay Choudhari,
V S Sudhakar, Vipul Parekh and V S Ramesh started Fabmart, one of the first online businesses
in India. But it failed because of the low internet penetration in India at the time and lack of
secure digital payment gateways which discouraged people from making online payments.
They regrouped in 2011 to try the online grocery market again and started Big Basket.

BigBasket comprises of two separate entities – Supermarket Grocery supplies Pvt Ltd (SGSPL)
and Innovative Retail Concepts Pvt Ltd (IRCPL). The BigBasket (from here on referred to as BB)
we know, includes the android application, web site and the last mile delivery functions.
These form part of IRCPL. SGSPL is the back end of the business. SGSPL comprises sourcing
products from farmers, FMCG companies and local manufacturer and the Business to
Business selling operations. BB currently operates in 29 cities in India with an annual revenue
of 3200 crore rupees. They sell more than 22,000 different products through its apps to
4 million customers across India.

BUSINESS MODEL
Problem Statement

An average shopper in an Indian city face a multitude of problems during the course of his
shopping. These include traffic snarls, crowded markets, limited SKU’s, poor quality and heavy
bags. To sum everything up - “Cumbersome shopping experience in Indian Cities”. This is what
BB tries to address. They offer “Transformational Shopping Experience at the touch of a
Button through BigBasket”.

Products Offered

Bigbasket, offers 20000+ products from 1000 brands. These include fruits and vegetables,
pulses, cereals and food grains, milk and dairy products, everyday household items, cosmetics
and toiletries.
Service categories

The service categories cater to a variety of customer needs based on quantity, quality, time
and convenience. BB operates the following different services.

 Business to Customers – This is also called as Full Slotted Delivery. Here the customer
can place an order and slot a delivery time in four delivery slots (7 am -10 am, 10 am
- 1 pm, 4 pm - 7 pm, 7 pm - 10 pm). Thus, the customer can ensure his/her availability
to collect the products when it arrives.
 Business to Business – The B2B model caters to the HoReCa segment namely hotels,
restaurants and caterers and to local Kirana stores. This is the whole sale arm of the
business
 BB Daily – This works on an entirely different platform. It caters to recurring daily
needs of customers (liter of milk, a kg of fruits) that will be delivered to your door step.
Users can setup their daily requirement using the BB Daily app and delivery happens
in the morning between 5.30 am to 7.30 am routinely.
 BB Instant – BB has setup their own vending machines in cities, mainly in large
institutions and corporate houses. This facility has been started only in a few cities at
present.
 Express Delivery – The customer can order for products at any time of the day. This
service is however mainly for fast moving and popular products. The typical delivery
happens from 90 minutes to 120 minutes.
 Specialty Store – This service is operational only in a few cities in India. BB has tied up
with popular local stores to deliver specific delicacies and products from these stores
to the customers. The service caters to brand loyal customers and those who are
willing to pay a premium for such a service.

BUYING & MERCHANDISING

When BB started its operations, it adopted the ‘just-in-time model’ – wherein not only
unpreserved good but every item was bought against an order. In other words, they were
purchased-to-order. The delivery boy directly picks up the item from the retailer, and directly
delivers it to the customer. As their business grew, they switched to an ‘inventory model’ for
their products. Buying and merchandising function is delegated to regional heads and for bulk
contracts and strategic decisions at the national level. A regional manager can buy and stock
local products after consent from the Head Quarters.

Product Sourcing

BB forecasts consumer demand in a city and plans purchases accordingly. BB buys directly
from FMCG majors in bulk quantities and maintain a stock level in their warehouses. For fruits
and vegetables, BB buys 80 - 90% directly from the farmers and rest from the market (sabzi
mandis). BB also sources exotic fruits and vegetables internationally. Products bought locally
is also transported across the country to meet consumer demand. Buying and Merchandising
occurs at the regional and local levels and also centrally at the national level for bulk
purchases in case of FMCG goods.
 SUPPLY CHAIN & OPERATIONS

The supply chain structure for BB varies depending on the type of the product. A block
diagram representation is given below.

 Collection Centers – These are located near fruits and vegetable growing areas. The
farmers bring their produce at the collection center. A 100% check of the produce is
performed here. They are then dispatched to distribution centers. BB has also
positioned an agronomist at each collection center. The agronomist advises farmers
on the market demand forecast, type of fruits and vegetables in demand and guides
on best agricultural practices to improve yield.
 Primary Preparation Centre – This is co-located with the collection centers. They are
responsible for packaging the produce for further dispatch. From the Primary
preparation centers, they are directly sent to the B2C customers.
 National Aggregation Centre – The national aggregation center for BB is located from
Ananthpur. International fruits & vegetables, exotic fruits from across India are
brought here, packaged and sent to the various distribution centers.
 Distribution Centers – These are warehouses typically situated outside the major
cities where BB operated. Depending on the size of the city, there may be three or
even more distribution centers. The major inventory of FMCG items and all non-
perishables is held at the distribution centers. Fruits and vegetables from the mandis
and collection centers are also stored here. The FSD delivery service happens from the
distribution centers. The delivery to B2C customers also occurs from here. The
distribution centers across various cities exchange stock with each other to meet
demands. The distribution centers also replenish the stock of dark stores and hubs
which are located in various localities in the city. A detailed description of a
distribution center is given in the Appendix.
  Hubs & Dark Stores – These are located in close proximity to the customers and mainly
contain fast moving and frequently used products. Their stock is replenished by the
distribution centers. Also, certain products like milk, eggs and other standardized
products which have a very high daily demand are directly received at the hubs. The
hyper local deliveries, bike and van deliveries happen from these hubs and dark stores.
They cater to BB Daily and BB Express Delivery services. The hubs and dark stores
enable BB to meet delivery timelines of less than 120 minutes.

Last mile delivery

BB does not outsource the last mile delivery. They handle all logistics operations. They own a
fleet of bikes and vans for the same. Only national level movement of products are third party
contracts.

BB receives the customer orders at the distribution center, hubs or dark stores depending on
the type of product. Each order is picked and segregated into plastic crates. The crates are
color coded according to the product. Each crate contains a bar code which reveals
information about the order, customer and the list of items. For perishable items or items
which are required to be maintained at a low temperature, BB uses cold tubs which are
temperature regulated crates. The vehicle loads the crates as per the areas and the route to
follow is plotted automatically by LOCUS (route optimization software).

MARKETING

BB has more than 50% of the market share in the e-grocery segment. By offering different
types of services, BB has been able to capture a large portion of the market. BB offers a variety
of discount on its product daily. BB had just recently concluded its Big 47 sale (Nov 06 – Nov
18) where it offered 47% discount on many products. BB operates a large fleet of vehicles for
delivering its products across 29 cities. This significantly contributes to the popularity and
reach of the brand and.

BB spent 4.9% (9438 lac rupees) of total expenses on advertising in the year 2018. BB has
roped in Shah Rukh Khan as its brand ambassador and several ads are aired to promote the
quality of their goods. In the year 2017 BB launched an online campaign with the aim of
encouraging and empowering every member in a family to complete their everyday grocery
shopping needs conveniently. The company launched six videos which ran on its social media
platforms and YouTube. The videos indicated how BB is the “easiest way to shop for
groceries” and invites people to try the hassle-free experience on its platform.

The BB team, to ensure retention, built a ‘Cocaine’ model. The customers are classified under
trial one, two and three, and silver, gold and platinum. Trial one refers to the first order, the
second order moves to trial two and trial three is the third order. On the fourth order, the
customer moves to silver, and this is when the team knows they have got a customer. The
highest churn is from trials one, two and three, and the retention rate at platinum is at 95
percent. So, the team focuses on getting the customer to move higher up the chain by
incentivizing them. BB offers reward points based on purchase value and cash backs. BB has
an overall customer retention rate of 35 percent.
BB is active on FaceBook, Instagram, Twitter and Youtube. They regularly run video campaigns
and feature in a lot of Google searches and Ads. They are definitely leading in the social media
marketing in the e-grocery segment.

Customer Centric Approach

With analytics the company’s aim is to populate a customer’s basket based on their most
recent and frequent purchases, alert them if they have not added something, they usually
buy in case they have forgotten it and inform them if an item they normally buy is about to
run out. BB also has a feature called Smart Basket. The smart basket predicts 90 percent of
what a customer buys. Those who use Smart Basket feature spent 40 percent less time
shopping. This translates into time value for the customer. BB analyzes customer buying
patterns and uses different offers for different set of people to retain them.

INFORMATION TECHNOLOGY/MIS

The company relies heavily on data analysis, forecasting and optimization for daily operations,
short term & long-term planning, and increasing efficiency in operations.

Inventory Management System (IMS)

BB uses a custom-made software for inventory management, placing orders to suppliers and
following up on customer orders. IMS monitors stock levels, forecasts demand and places
order automatically to the suppliers. It contains the following modules
 Stock Module
 Purchase Module
 Flexiware
 Utilities

LOCUS

LOCUS application collates all the orders for a particular area of the city for a particular time
slot from the IMS mentioned above. It then runs its optimization algorithms and plots the
optimized route that the delivery vehicle needs to follow for the fastest delivery and least
cost.

Cropin

Cropin is an agri-tech company which provides SaaS (Software as a Service) solutions for
monitoring the quality, quantity and productivity of farms. In the initial stage, Big Basket faced
frequent issues of unreliable (quantity and quality) yield by farmers, which was adversely
affecting the performance and credibility of the company. BB partnered with CropIn Bigbasket
for increasing output from the farmers’ fields and also help them plan expected harvest
quantities. This was achieved through following.
 Digitization of farm data (using IoT devices)
 Maintenance of farmer databases and monitoring farm activities
 Tracking harvest projection by farmers and daily harvest summary
The harvest visibility is a priority for BigBasket in order to effectively fulfill customer demands.
CropIn provided harvest forecast to BigBasket Collection Centers for 129 organic crop
varieties. This report provides data on multiple parameters such as daily harvest, remaining
collection from the farmer etc. This enables BigBasket to take well-informed decisions and
helps balance its demand and supply numbers.

IOT Devices

Product Picker Device - BB uses hand-held scanners in its warehouses. The mobile device
(with inbuilt software) is used for allotment of orders to order pickers (material handlers).
Subsequently, the picker uses this device to scan products against a particular order, places
the item physically inside the basket on a moving cart (contain 09 baskets), maps the order to
the basket, maps the location of the basket on the cart to an order. These help material
handlers to locate the item in the warehouse, optimize route and also prompts to pick any
other items which are part of other orders along the way. The handler scans each item and
then places them in the basket. The system tallies it with the master order and confirms that
the right product has been picked. The mobile device gives an audio feedback to the picker to
verify that the correct item has been picked. The inventory level is automatically adjusted
once the item is issued against an order.

Thermal Sensors - BB uses IOT enabled temperature sensors in its cold tubs. They ensure that
products like ice creams and milk stay at the right temperature during transit to the customer.
It records the temperature at which the cold tub was opened when handing over the product
to the customer.

HUMAN RESOURCE

Out of the 25,000 total employees at BB, 21,000 are from the Low-Income Group. They form
the major chunk of their work force. These include the delivery boys, drivers and material
handlers at the distribution centers, collection centers, hubs and dark stores. The operational
efficiency of the business relies very heavily on the commitment and dedication of this work
force. It is therefore paramount to inculcate a sense of family, organization so that they work
towards the common goal of serving the customer.

The company has hired the labor force and majority are full- time employees. They enjoy
medical insurance, edu-claim and other benefits offered by the company. The company has
formed a trust that supports workers’ families and ensures there are no extra working hours.
BB has taken a lot of measures to ensure the wellbeing of the employees. The company
sponsors a fully paid trip to all its employees across India to their Bengaluru office and
organizes a Rock Star concert every year. 8% of the total expenses of the company is spent
towards employee benefits and wages.
 FINANCIALS
Funding

The company is primarily financed by equity infusion from venture capitalists. The company
is a unicorn and is valued at 1 billion dollars+ after the latest round of equity. The major
investors in the company are Alibaba, Helion Venture Partners, Ambraaj Group, CDC Group,
Bessemer Venture Partners and Mirae Asset Naver Asia Growth. The company has obtained
a total funding of 727 million US dollars as of Nov 2019.

Funding in million US dollars

800

700 2019, 726.9

600

500

400

300

200

100

0
2011 2012 2014 2015 2016 2017 2018 2019

Existing Added

Balance Sheet

From the Balance Sheet of year ending 2017 and 2018, it is seen that company had an infusion
of equity to meeting operating costs. There has been a substantial increase in short term
investment (mutual funds) by the company compared to the previous accounting year.
Though this points to reduced working capital, the company has current assets which can be
liquidated to meet operating costs. The total assets of the company have increased by 143%
from 2017 to 2018 mainly through capital investment. The borrowings of the company have
decreased from the previous year by 26%.

Profit & Loss Statement

There has been a 34.1% increase in total revenue from 2017 to 2018. Growth in revenue for
the past five years are shown on the next page. The CEO of the company has set a target sale
of 6000 crore rupees for FY’ 2019-2020.
 Total Revenue(in crore rupees)
7000
6000 (Target)
6000

5000
3200(estimate)
4000

3000
1605.66
1197.3
2000
579.96
1000 177.53
70.91
0
2014 2015 2016 2017 2018 2019 2020

There isn’t any significant change in total expenses BB incurred in financial periods ending
2017 & 2018. The bulk of their expenses is towards purchase of goods. An approximate
breakdown of expenses of the company is shown below.

Heads % of Total expense for 2018

(approx.)
Purchase of goods 76.9
Employee Wages/Benefits 8.0
Advertising 4.9
Office expenses 2.8
Contracts 1.6
Rent 1.6
Transportation 1.4
IT 1.0
Others (Packing, Insurance, 1.8
Power, Finance, Travel)
Total 100% (191596 lac rupees)

The company is incurring a loss of 31030.14 lac rupees as on Mar 2018. The increase of
expenses is in proportion to the increase in revenue. The company has written of its
investment in Delyver which the company acquired in 2015. There has not been a significant
increase in operating costs.

Leverage Ratio

The Total Debt/equity ratio, Total Assets/Equity ratio and Total Debt/Total Assets ratio is good
and comparable to industry standards. The company doesn’t have long term borrowings and
operates primarily on equity investment and returns from financial assets.
Liquidity Ratio

The quick ratio (Liquid Current Assets/Total liabilities) for the company is 5.38. The current
ratio (Current Assets/Current Liabilities) for the company is 7.83. The company has good
liquidity and is able to meet short term capital requirements.

Performance Ratios

 The Gross margin percentage of the company 9.77% is comparable with other
competitors. The margin has been increasing for the past three years.
 The days receivables outstanding is very high for the company. It indicates that the
company is not able to collect their dues efficiently. This may give rise to bad
debts/collections in the future.
 The days of inventory for the company is 29. The company holds items on shelf for a
maximum of a month before being sold.

The financial position of the company is good. The company has capital to meet its operating
cost. It’s a going concern. The company as on Mar 2018 was running under loss. The profit
margins associated with the e-grocery segment is very low as the initial setup costs are high.
The company cannot increase their selling prices to increase revenue as it might lose its
competitive advantage. The company can make profits only by

 Scaling up operations
 Increased customer base
 Reduce operating costs.

Once the company breaks even and covers its initial setup cost (Fixed cost for a city), the
company can increase profits minimal further increase in investment. As per the statement
of Mr. Menon, CEO of the company, they have crossed Break-even point in Bengaluru city.
Based on the interactions with the Ahmedabad team, the region is also expecting breakeven
in 4 to 5 months.

BUSINESS STRATEGY

Which Business Model to Adopt?

Online grocery may appear as a simple business of delivering fruit and vegetables, staples and
dairy to customers. Delivering what the customer needs in time across a big city is a tricky
proposition and BB has given a lot of thought in evolving and identifying the most viable
model.

BB initially went along with a Just in Time hyper local delivery model. There was no holding of
inventory. BB bought items as per the customer orders and supplied them. After operating
with this model for some time BB realized that without control of inventory, it is not possible
to retain customers. It was much harder to achieve fill-rate, slotted delivery times, and quality
control with an asset-light model that relies on picking up items from multiple stores instead
of own stocks. The fill rate is the percentage of the customer demand that BB can meet. If a
customer’s complete needs are not met by BB, he/she will go to another store, online or
offline, and buy everything there.

BB moved onto a mix of Inventory and hyper local delivery to meet the goals of a high fill rate,
quick delivery, retain customers and control quality. “We have 99.5% fill-rate, which is
globally the best," says CEO Mr. Menon. BB maintains stock of a wide range of SKUs (stock-
keeping units) in warehouses, and hubs across all the operating cities. Grofers initially
operated on an asset light model, but soon moved into an inventory-led model with
warehousing and dark stores which was a vindication of the decision BigBasket founders
made in 2015. By that time other players realized it, BB had achieved first mover advantage
in the market.

Whether to Scale up and Expand?

A national supply chain will not work for the sourcing and distribution of groceries as they are
perishables. So, for in each city they operate, BB essentially has a different supply chain
infrastructure that works like a different business. A localized supply chain is required for
every region.

Bigbasket had originally planned to expand to 50 cities in total but has now scaled that back
to the 29 it currently operates in. Their lateral expansion has been put on hold for now. Any
rapid expansion or scaling up will cause the business to implode. BB therefore is concentrating
on a few cities, and is trying to make them sustainable and profitable. BigBasket plans to go
deep into these cities and start making each city work well before scaling up. They want to
increase the customer base in every city they operate rather than go for a country wide
expansion.

Acquisitions/Partnerships

BB has acquired other start-ups to boost their overall capability. They have partnered with
technology firms to give them the edge. Some of the acquisitions and partnerships are
mentioned below.

 Acquired Delyver in Jun 2015 to boost its hyperlocal delivery capability. Delyver was
an online grocery store and its specialty was using local stores to deliver groceries to
people on two wheels.
 In 2017 Big Basket partnered with MUMBAI-owned Bengal Chemicals and
Pharmaceuticals Limited (BCPL) to deliver its industrial chemicals, pharmaceuticals,
and home products to its customers in Kolkata.
 In April 2017, Big Basket partnered with Snap Bizz, a retail technology firm to automate
supply chain and inventory management system.
 Kwik24 was acquired in Jun 2018. It’s a smart vending machines startup. BB has
installed around 100 smart vending machines in Bengaluru for their BB Instant service.
 Morning Stars Retail Private Ltd was acquired in July 2018. Morning Cart is an online
platform that allows users to shop for milk, bread, newspaper and eggs.
 RainCan was acquired in Oct 2018. It is a mobile application-based subscription service
provider that delivers dairy, bakery, meat, fruits and vegetables.
  Cropin is an agri-tech company. BB has partnered with this company for monitoring
the quality, quantity and productivity of farms.
 There have been reports in the media that BB is in talks with another E-grocery start-
up Daily Ninja and are planning to acquire them.

BB has added more assets to build a more efficient delivery fleet. BigBasket announced plans
to turn towards e-mobility for its last-mile delivery operations across metros. The company
said that it currently had 150 e-vans and 50 e-bikes. It aimed to increase this to 1000 vans and
2000 bikes within the next one year. BB is working with multiple e-van OEMs like Gayam
Motors, Euler Motors and introducing e-bikes from brands including Hero, Okinawa, Li-on,
and Greaves Cotton in its operations.

BigBasket adopts a customer centric approach. It focusses on retention of customers on its

platform. Along with retention, BB wants customers to do all their purchasing from their apps.
“There is a strong focus on convenience, but customers are also wary of missing or not getting
deliveries on time,” says their CEO Mr. Menon. Building trust and loyalty is therefore critical
for BigBasket. “If a customer buys twice from BigBasket in a period of three to six months,
then he is your customer” says their CEO Mr. Menon. Towards building customer loyalty, BB
needs to customize the experience for each and every customer. BB have loyalty programs
and offers customized to each customer. Data plays a major role in making this happen.
Analytics is an area the market leader is leveraging to improve everything from inventory and
delivery to customer experience.

SWOT ANALYSIS

Strengths

 Product Range - Big Basket offers 22000 SKUs to customers. This is considerably
higher than one would expect at any Kirana store. They also offer localized products
and local brand names on their app.
 Exotic Range - It also offers exotic fruits, vegetables and imported groceries which are
not easily available in retail outlets and Kirana stores.
 Discounts - Big Basket is able to offer huge discount on their products. This makes it a
lucrative option for customers.
 Convenience - Big Basket offers an escape from the hassle of standing in the queues
of malls and going to the retail stores. They deliver the products at the doorstep. The
customer can also choose a time of his choice. For some products, they promise
delivery within two hours.
 Target – BB has carefully chosen the cities to operate and are focusing on improving
penetration in individual cities before scaling up. Their different services like BBDaily,
FSD, Express Delivery are targeted at different customer groups.
 Sound Business Model - BB operates on an Inventory model. BB stocks a lot of SKUs
in their warehouses. Due to bulk purchases from suppliers, BB can better bargain for
costs and increase their profit margins.
 Social Acceptance - Bigbasket sources a majority of the products from local vendors
and farmers. They are able to provide better prices to the farmers and local vendors.
They offer insurance and education claim benefits to their employees as well as the
 farmer community. Through these measures, they have developed a lot of trust,
loyalty and commitment to their business from the local community and their
employees.

Weakness

 Delivery Time - Big Basket delivers the groceries the next day. Many retailers have
started the facility of home delivery to nearby societies and customers in just few
minutes to hours. Customers prefer this instead of waiting for 24 hours. BB has
merged its services to bring delivery times to within four hours for all its products.
 High Variable Cost - Cost of running many delivery guys, delivery trucks, storage for
perishable items, wastage during transportation makes the business run at a high
variable cost. They have to bleed more money and will take longer to break even. Even
a small reduction in operating efficiency will cause a big dent on their profit margins.
 Minimum order quantity/price compulsion - Big Basket does not offer home-delivery
below a certain set order price limit. This means that customers would be forced to
add a product or two just to avail the service. This makes them lose customers. It also
gives an opportunity for smaller start-ups to gain a foothold.
 Order Cancellations: BB depend on stores that they have tied-up with to provide
them the items. If they do not have the items available, they won’t be able to deliver
them. This sometimes tend to cancellation of orders and it becomes to retain
customers.

Opportunities

 Market - Indian retail market is valued at more than approx. $550 million and grocery
alone covers 60% of this share. Online grocery platforms and supermarkets cater to
only 5% of the total grocery segment in India. 95% of the segment is still controlled
by kirana stores.
 Growth - India is the 6th largest grocery market in the world. E-commerce grocery
market is growing with a year on year growth rate of 19%.
 Expansion - Many cities are still not covered by these startups and Big Basket can
target them and gain first mover advantage.
 Cross selling and Value Packaging - Cross selling is a major advantage for Big basket
as it can sell multiple products by product bundling.
 Technology – BB can use IOT and data analytics to automate several ware house
functions, optimize operations and improve forecasting.

Threats

 Competition - The entry barriers to launching a e-grocery start-up is very less. BB

operates only in limited cities in India. There are already other players in the market
with a good customer base. Some of the successful start-ups include Grofers,
PepperTap, Nature’s Basket, Zop Now, Aaram Shop, Mera Grocer, etc. Bigger Players
like Amazon, Flipkart and Google are also entering this segment which will pose a
challenge for Big Basket.
  Smaller Players - Many other localized shops have picked up on this trend and have
started home delivery service to nearby customers thereby killing groups of target
customers across regions and cities.
 Customer Switching - It is very difficult to retain customers. They would tend to move
with the service provider that offers the most discounts.
 Expansion – BB has presently put hold on plans of expansion. Making the expansion
sustainable and profitable in the long run needs to be seen

The Way Ahead

 Technology/Automation – BB needs to invest in data analytics, to better demand

forecasts and map customer preferences to create valuable offers and discounts. BB
can automate a great amount of manual processes in their ware-houses and collection
centers. This will reduce operating costs and increase efficiency.
 Delivery times – To compete with newer players, BB needs to better its delivery
timelines
 Quality – BB must ensure that the quality of the products is maintained with the
increasing scale of their operations. Even a minor quality slip-up will cause customers
to switch to rival service providers.
 Tie- Ups – BB can explore associations with local kirana stores and merchants for
hyperlocal delivery and reduce inventory carrying costs. This would ensure deeper
relationships with vendors and assured supply of items.

SOCIAL IMPACT OF BB

 BB has had a good impact on the society at large and this has contributed to its positive
brand image. They have followed a sustainable business model with expansion only
after consolidation at each level.
 The sourcing of fruits and vegetables are done directly with the farmers. In the process
farmers who used to get 10-20% of the final selling price as profit now get a return of
40-50% on the selling price. By associating agronomists in the supply chain process,
farmers are able to increase their yield and reduce fertilizers and pesticides. This in
turn translates to better quality produce and happy customers for BB.
 BB promotes organic farming and supplies organically grown fruits and vegetables at
a premium price on their app. This encourages more farmers to organic cultivation
which is good for the environment in the long run.
 BB pays farmers with 48 hours of collection of their produce and all payments are
done directly into the farmers accounts. This has removed several layers of middle
men and commission agents and increased the transparency in the system.
 BB employs a total of 21,000 LIG workers in their warehouses and supply chain. They
are full time employees of BB and now have access to education claim and health
insurance offered by the company.
 CONCLUSION

BB which was founded in 2011 has grown into a major player in the e-grocery segment in
India. Its revenue crossed 3000 crores in the FY 2019. It has more than 50% market share in
the 29 cities it operates. The company which started as a hyper local delivery service has now
moved into a mixed Inventory & hyper local delivery platform. The company is looking to
consolidate its present position before further expansion. The company was operating under
losses for the past 7 years has now broken even in some of the cities. Although there is stiff
competition in the e- grocery segment, BB has a first mover advantage. It has already put in
the basic infrastructure in place for its operations. With the increase in digitization in India,
rise in income, and stigma of online grocery shopping diminishing slowly, the demand for
online purchase and door delivery of groceries is showing an upward trend. BigBasket is
perfectly poised at pole position and become the market leader its founders envisioned
in 2011.
 Photographs

Inventory Management System of BB

Trolleys and Color-coded crates for picking consumer order

Photographs (Continued)

BB Distribution Centre- Moraiya

BB Distribution Centre- Moraiya

 Photographs (Continued)

Cool Tubs for storing perishable items during transit

Cool Tubs contains IOT thermal sensors for temperature monitoring

Hand-Held IOT device used to process orders at Distribution Centre

 Photographs (Continued)

CropIn Software Interface for monitoring farms

CropIn Software Interface for monitoring farms