Going by the recent stats – the grocery retail market in India is seen to be growing at about 10% CAGR (Compound Annual Growth Rate) A large portion of the business of this market is likely to be availed from the urban cities.
Hence, to capitalize on this growing segment, we have seen a rise in the number of start-ups such as – ZopNow, Aaram-Shop, Farm 2 Kitchen, Local banya, etc… But the winner in this category remains – Big basket.com!
Let’s tell you the story of the company and the man behind it – Hari Menon!
Who Is Hari Menon And How Was Life Before Big Basket?
Born in 1963 – Hari Menon is the Cofounder, CEO and Head of Merchandising at Bigbasket.com!
Over some time, Hari had also been an integral part of quite a few companies. Before starting Big Basket, Hari along with the founding team of Big Basket had cofounded Fabmart, one of the pioneers in the e-commerce in India and its physical extension – Fabmall.
A lesser known fact is that Hari had also served as the Country Head at ‘Plantasia’ – which was one of the first Internet services businesses in India, and had begun his career with ‘Wipro’ as a Business Head in the Infotech business.
He considers himself to be a Music enthusiast and also wishes to play in a band someday. He is also an avid cricket fan and a member of the ‘Karnataka Cricket Association’ as well.
Hari was born into a middle-class family that lived in Bandra, Mumbai, and was always taught to lead a life that gave him a settled life, a stable job, etc… It was the urge to experiment that pushed him to try out something new.
Lastly, Hari is an alumnus of BITS Pilani and is married to ‘Shanti Menon’ – principal of ‘The Deen’s Academy’ (Bangalore). She is also the daughter of ‘E Sreedharan’, the man behind the Delhi Metro.
What Is Big Basket?
To begin with – BigBasket.com is owned and operated by ‘Supermarket Grocery Supplies Pvt. Ltd.’! bigbasket.com (Innovative Retail Concepts Private Limited) is India’s largest online food and grocery store. With over 18,000 products and over 1000 brands in our catalog, you will find everything you are looking for. Right from fresh Fruits and Vegetables, Rice and Dals, Spices and Seasonings to Packaged products, Beverages, Personal care products, Meats – we have it all.
Choose from a wide range of options in every category, exclusively handpicked to help you find the best quality available at the lowest prices. Select a time slot for delivery and your order will be delivered right to your doorstep, anywhere in Bangalore, Mysore, Hyderabad, Vijayawada-Guntur, Chennai, Madurai, Coimbatore, Mumbai, Pune, Nashik, Ahmedabad-Gandhinagar, Vadodara, Delhi & Lucknow. You can pay online using your debit/credit card or by cash / Sodexo on delivery.
We guarantee on time delivery and the best quality!
With more than 14000 products and over 1000 brands listed on their catalog – BigBasket is known to be India’s largest online food and grocery store. It offers a wide range of options in every category to provide you with the best quality products at the lowest prices which include – fresh Rice and Dal, Fruits and Vegetables, Spices and Seasonings, Packaged products, Beverages, Personal care products, Meats, and many more…
What Is Their Business Model?
Big Basket has effectively managed to attain and maintain their success by using various strategies which mainly surround three important factors: –
New additions to the ‘basket’
Big basket is operational in seven cities (including six metros) currently and with fresh funding, it plans to expand to two more metros and 50 tier two cities. The funds will be used towards:
- Warehouses: The company is in the process of opening large warehouses (approximately 100,000 square feet) in the metros of Bengaluru, Hyderabad, Mumbai, Pune, Chennai, Delhi-NCR, Ahmedabad and Kolkata. These eight warehouses will also cater to cities that fall within a 250-300 km these metros. For example, the Bangalore warehouse is serving Mysore at the moment, similarly, Chennai can be a feeder to Madurai, Trichy Ahmedabad to Surat, Baroda and Hyderabad to Vijaywada, Vizag and Guntur. There will be a support network of 60 smaller warehouses getting direct supply from the large warehouses.
- Expansion: Big basket will be launching in Kolkata and Ahmedabad by October. By the year end (March 2016), Big basket aims to be present in 35 cities. Hari says
- One hour express deliveries: For emergency items, the company is introducing an option of one hour express delivery using a two-wheeler network of Delyver, the startup acquired in January 2015. Big basket is setting up dark stores or small warehouses with 1000-2000 SKUs, for the same which will get a direct feed from the main warehouses.
- Delyver co-founders are now a part of the management team of Big basket and the rest of the team will be supporting the one hour express delivery feature.
Size of the basket
Hari mentioned that Big basket is processing almost 20,000 orders per day. The 2000 member team has a 70 percent blue collar workforce. Hari believes that the recent second line hires of the company including the head of merchandising, VP of engineering and HR Director are well set to take the company to the next level. While the revenues of the company in FY 2014-15 was 210 crores, Hari is expecting the March 2016 revenues itself to be 200 crores($30M) exiting the fiscal year with a run rate of $400 million.
Now looking at their strategies – a grocery business (that too an online one), unlike many other sectors, deals with many constraints (in different ways) due to which must be expanded city-wise.
It deals with many perishable products which have a short life, plus the needs and demands of the consumers also change from city-to-city.
Hence, it is of utmost importance to create a strong Supply-Chain network and develop links with large suppliers. This strategy has helped Big Basket maintain its operational superiority.
It has also helped them greatly, in offering a wide range of products at competitive prices in a low margin industry.
What Is The Story & How Has Their Growth Been So Far?
It all began in 1999. Hari Menon along with five of his friends – VS Sudhakar, Vipul Parekh, Abhinay Choudhari and V S Ramesh launched their online retail website called ‘Fab mart’.
Even though they did manage to get some traction but since their idea was way ahead of its time, they could not shake the masses. And to worsen the whole deal, the dotcom bubble burst happened.
That is when they decided to put the online business on the backseat and focused all the energies on ‘Fab mall’, their physical retail chain of grocery stores. Anyway, in a matter of seven years, they expanded their business to 200 stores across Andhra Pradesh, Tamil Nadu, Karnataka, and Kerala. Around the same time, they also decided to sell-off the business to Aditya Birla Group.
That is when they thought of getting back to their original idea online grocery store. As their discussion deepened with serial entrepreneur Krishnan Ganesh, they concluded to go ahead with it. The idea was collectively seeded by serial entrepreneurs and angel investors Krishnan and Meena Ganesh. And finally, on December 2011, they launched BigBasket.com!
According to Hari, the first six to nine months were the most challenging ones. Since they had already faced the heat once with Fab mart, the pressure was even more. The biggest challenge for them was to create and maintain a building capacity to meet customer demand.
They successfully pulled this off and were able to grab a growth of 25-30 % in their demands, and 60-70 % repeat customers M-o-M (Month-on-Month).
This was even more commendable since they were barely advertising about the brand and mainly relied on word of mouth. As per their stats, more than 45 % of their customers came through references.
By the next year, they had already expanded to Hyderabad and Mumbai and were also planning to further increase their services in Delhi, Chennai Pune, Ahmedabad and Kolkata as well.
The future, of acquisitions, profitability and next round of funding!
Hari had earlier shared Big basket’s vision to become profitable by 2016 end. He now says that that may be delayed by a few months with this round of funding. This is due to the new businesses getting added. The company has revamped its branding recently and also roped in Shah Rukh Khan as their brand ambassador.
Big basket is looking at achieving the following targets in the next year:
- Automation in warehouses.
- Scale the footprint to 35 cities with 60 dark stores.
The next round of funding may take Big basket’s valuation to anywhere close to $1 billion. Though Hari is not too concerned about the valuation, he’s clear about continuing with his focus on the groceries segment (and kitchen care) and does not intend to diversify the business much. After all, a $300 billion market is by no means insignificant.
They closed the FY14 with revenues worth Rs. 210 crores!
Talking about the present year – Big Basket now processes almost 20,000 orders per day and has a team of 2000 members.
They have also acquired a Hyperlocal delivery start-up called – ‘Delyver’, to further strengthen its delivery service. Although the company still functions as an independent entity, the cofounders of Delyver have also been included in the management team of Big Basket.
Moving on, around the mid of 2015, Big Basket also roped in Bollywood actor – ‘Shah Rukh Khan’ as their brand ambassador, for an undisclosed sum; following which, they also launched a high volume television, digital and print media campaign as well.