Proforma Cover SheetTopic #: 4 Students Name :- Saurabh Sudhir Girgune Roll No :- 08 Heading :- #4 Which of the current „start-ups‟ (in India) in e-retail/commerce domain are truly world class? Support your choice with desk-researched information, data and bench-marking. INDEX Sr.no Topics Page nos 01 About Big Basket 02 02 Big Basket Overview 02 03 Business Model 05 04 Current Scenario 07 05 Comparison with competitors 07 06 SWOT Analysis 08 07 Benchmark set by Bigbasket 11 Bibliography 12 1 01. About Big Basket BigBasket.com with 18000+ products and 1000+ brands listed on their catalogue is known to be India’s largest online food and grocery store. It offers a wide range of options in every category to deliver you with the best quality products at the lowest rates including fresh fruits and vegetables, spices and seasonings, a category of packaged products, beverages, personal care products, even meats, and many more. 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, Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore and Chandigarh Tricity You can pay online using your debit / credit card or by cash / sodexo on delivery. We guarantee on time delivery, and the best quality! As of now, BigBasket is a purely internet based company and does not have any brick and mortar stores. 02. Big Basket Overview Bigbasket.com is an online food and grocery store located in Bangalore, Karnataka, India Categories Delivery Service, E-Commerce, Retail, Shopping Founded Date Oct 1, 2011 2 Founders Abhinay Choudhari, Hari Menon, Vipul Parekh, VS Sudhakar Operating Status Active Last Funding Type Post-IPO Secondary Number of Employees 1001-5000 Also Known As Supermarket Grocery Supplies Private Limited Company Type For Profit Website bigbasket.com Contact Email
[email protected] Phone Number 1(860) 123-1000 At Bigbasket.com they believe in being smart, quick & efficient making your life as leisurely as possible. They understand that in this fast-paced world, time is always of the essence and hence want to make your grocery shopping easy and convenient so that no time is wasted in this process. So, no more hassle of going down to the grocery store and long queues for billing etc. You can browse through their varied range of products at bigbasket.com, order them and get them to be delivered at your own convenient time slot. 3 How BigBasket started? It all started in 1999 when Hari Menon along with five of his friends- VS Sudhakar, Vipul Parekh, Abhinay Choudhari and V S Ramesh launched their online retail website known as ‘Fabmart’. They failed to get some traction as their idea was way ahead of its time, so they could not work for the masses. That was the time when they all decided to put the online business on the backseat and focus totally on ‘Fabmall’ with all their energy. Fabmall was their physical retail chain of grocery stores. They too merged this chain with another grocery retail chain known as ‘Trinethra’. Implementing many strategies and with hard work, in a matter of seven years, they succeeded to expand 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. Then the time came when they start thinking of getting back to their original idea of online grocery store. Discussion with serial entrepreneur Krishnan Ganesh was successful and they concluded to go ahead with it. The idea was collectively seeded by serial entrepreneurs and angel investors Krishnan and Meena Ganesh. And finally in December 2011, they launched BigBasket.com Funding Received Soon after their launch, they received their first funding of $10million from ChrysCapital co-founder Raj Kondur and Ascent Capital. There were 15 funding rounds of more than $100 million in the whole year of 2014. So far this year, BigBasket has raised $150 million in fresh round of funding led by UAE’s Abraaj Group to expand its services into smaller cities. Existing investors Bessemer 4 Venture Partners and Helion Advisors along with International Finance Corp and Sands Capital also participated in the round. 03. Business Model bigbasket.com (Innovative Retail Concepts Private Limited) is India’s largest online food and grocery store. With over 18,000 products and over a 1000 brands in our catalogue 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. BigBasket has effectively used unmatched customer service with large variety of products using constant innovation using technology. When BigBasket started its operations, it adopted the ‘just-in-time model’ – wherein not only unpreserved good but every item was brought against an order. In other words, they were purchased-to-order. In this model, the delivery boy directly picks up the item from the retailer, and directly delivers it to the customer. As the time passed and their business grew, they proceeded to an ‘inventory model’ for most of their products, and BigBasket now buys products directly from suppliers like – HUL, P&G, farmers, mills, etc. and then stocks these in their warehouses. And for the 5 revenue generation, BigBasket adds a small margin to the cost price of the product before vending them.But BigBasket also sources many of its products locally as well as nationally. Some items like onions, oranges, apples, etc. are purchased nationally from their major producing locations; while, many other items are sourced locally from ‘mandis’ (markets) or local farmers. This depends on the product and its surrounding factors. How to order??? 6 04. Current Scenario BigBasket has been implementing a Hyper-local strategy, wherein, it has joined hands with more than 1,800 neighborhood grocery stores across India to deliver goods within an hour. Looking for the current scenario – BigBasket now processes almost 20,000 orders a day, with the involvement of 2000 team members. Earlier they had acquired a hyper-local delivery start-up ‘Delyver’, to further strengthen its delivery service. Although, the company still functions as an independent firm, but the co-founders of Delyver have also been included in the management team of BigBasket. This acquisition has helped BigBasket in their Express Delivery model, to delivery groceries in one hour. Moving on, around the mid of 2015, BigBasket 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. They are now operational in 20 cities which include six metros, and are in plan to expand to 50 more tier two cities soon. They will also be opening 8 large warehouses in metro cities. 7 05. Big Basket Comparision with competitors:- 06. SWOT Analysis of Big Basket:- Strengths in the SWOT Analysis of Big Basket : 1. Product Range: Big Basket offers a huge range of products which stretches to about 18000 products. 2. Exotic Range: It also offers exotic fruits, vegetables and imported groceries which are not easily available in nearby retail outlets. This gives them an edge in catering to customers who like buying such stuff. 3. Discounts: Big Basket offers huge discounts on various products. They also have the product bundling technique to maximise sales and offering maximum discounts to the customers. This makes them a lucrative option for customers to buy. 4. Convenience: Big Basket offers an escape from the hassle of standing in the queues of malls or going all the way to the retail stores. They give the products right at the door step and offer multiple payment options. The on-time delivery guarantee makes them a lucrative option, Customers, especially in big cities 8 where life is very fast and it is difficult to reach thThe customers, can shop at any time of the day. 5. Target Group: They have selected their target customers very carefully and have established a footing in the metropolitan and some tier-I cities. They operate in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Mysore, Vadodara, Patna, Indore, Vijaywada, etc. They are currently operational in about 25 cities. 6. Low Fixed Cost business model: Most of the items that Big Basket offers are perishable hence they depend on the retail stores they are coordinating with for the products. This means they have no inventory cost and makes their business model more profitable. Weakness in the SWOT Analysis of Big Basket : 1. 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. So customers prefer this instead of waiting for 24 hours. 2. 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. 3. 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 a customers. 4. Be at home: Customers have to be at home when Big Basket is about to deliver. This means the customers have to plan according to the delivery time. If by some means the order gets delayed customer gets angry and unhappy by the service. On top of this they have to pay a little add on price for the home delivery. 5. Order Cancellations: They 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 9 to deliver them. This sometimes tend in cancellation of orders. Out of stock issues tend to make the customers unhappy and repetitive of such issues makes the customers reluctant to reuse the service. Opportunities in the SWOT Analysis of Big Basket : 1. Market: Indian retail market is valued at more than approx. $550 million and grocery alone covers 60% of this share. Hence it’s a huge market with many players to accommodate and customers to cater. 2. Grocery 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%. 3. Expansion: Many cities are still not covered by these startups and Big Basket can target them and gain the first movers advantage. They can expand to tier-2 cities and increase their market. 4. Cross selling and Value Packaging – Cross selling is a major advantage for Big basket as it can sell multiple products by product bundling. Threats in the SWOT Analysis of Big Basket : 1. Competition: It has small presence in terms of cities covered hence, it is getting a huge competition from other startups like Grofers, PepperTap, Nature’s Basket, Zop Now, Aaram Shop, Mera Grocer, etc. 2. Bigger Players: Bigger players in terms of financial backing and presence are also entering this lucrative industry. Players like Amazon, Flipkart and Google have also entered this industry. This may prove fatal for smaller players like Big Basket to compete with them. 3. 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. 4. Customer Retention: It is very difficult to retain customers. They would tend to move with the service provider that offers the most discounts. 10 07. Benchmark set by Bigbasket Alibaba, the Chinese e-commerce giant, has led a $300 million funding round in India’s online grocery start-up bigbasket.com. The Bengaluru-based bigbasket said other investors, including Abraaj Capital, Sands Capital and International Finance Corporation (IFC), a member of the World Bank Group, also participated in the round. The online grocer managed a mega feat this month by crossing the 5 million customer benchmark. When it comes to sales the e-grocery firm has seen more than 300 percent growth over the course of the past year. On a monthly basis, growth is continuous at a 10 percent rate. The firm said it planned to use the money to build farmer networks, expand deeper into existing cities and become the most preferred employer for blue- collar jobs. “The funds will be directed towards bettering our technological, analytical, and infrastructural prowess, all of which will enable the company to move up the curve The firm was currently partnering about 1,800 farmers throughout the country and would increase the number to 3,000. Big basket, which operates in 30 cities in the country, said it closed the previous fiscal year (2016-17) with 1,410 crore in revenue. The firm said it was clocking ₹200 crore in monthly run-rate. This was expected to increase to 300 crore in August 2018 and ₹500 crore in March 2019, according to the company. 11 Big basket, signed a three-year e-procurement deal with SourceEzy Technologies Pvt. Ltd, an e-procurement software and consulting firm here to source over 100 crore in the next three years. 12