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More preferring online grocery shops: BigBasket

BigBasket said it’s using its partnership with Chinese e-commerce giant- Alibaba to improve delivery and logistics.The retailer, which has shifted from dark stores to large warehousing format, has also implemented Alibaba’s bulk storage mechanism ...

, ET Bureau|
Updated: Nov 09, 2019, 10.00 AM IST
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With the highest frequency across categories and potential for private labels, online grocery can grow to $99 billion over the next decade from less than a billion dollar, according to CLSA.
BENGALURU: BigBasket, India’s largest online grocer, said it crossed Rs 3200 crore in sales by growing over 60% during the year ended March 2019, indicating an increasing preference for online grocery shopping in the country.

“We hope to clock Rs 5300 crore in the current fiscal and already have 12 million customers. Operationally, we will break even in the next 4-6 months,” said Hari Menon, founder, BigBasket, which counts Mirae Asset- Naver Asia Growth Fund and Alibaba among its investors.

The eight-year old e-grocer said it is using its partnership with the Chinese ecommerce giant to improve delivery and logistics. “We learnt a lot about how express delivery works from Alibaba. Earlier, we used to deliver independently- one was van delivery and the other was bike delivery. Now we have integrated the two to optimize delivery.”

The retailer, which has shifted from dark stores to large warehousing format, has also implemented Alibaba’s bulk storage mechanism to optimize space. Experts feel logistics and distribution is the key differentiating factor for online grocery business. "Perishable nature of grocery makes it more important to have tight control over supply chain, inventory and distribution."

"BigBasket has its own technology routing software to manage logistics. Moreover, it maintains warehouse in all 26 cities where it operates and uses farm-to-fork model to deliver fresh products," wrote Rajiv Sharma and Vandana Soni of SBICAP Securities in an investor note. Just 0.2% of India's grocery market is online but participants are growing nearly 50% annually in a category that has been the monopoly of neighbourhood stores.

With the highest frequency across categories and potential for private labels, online grocery can grow to $99 billion over the next decade from less than a billion dollar, according to CLSA. “Amazon and Flipkart are big players but they will need to focus on sourcing of vegetables and meats which is a new skill set for them,” said Abneesh Roy, executive vice president at Edelweiss Securities.

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