The Virtual Basket
In a country where consumers are accustomed to selecting their own tomatoes, Bigbasket.com, India’s first e-grocer is set to change the rules. With a commitment to offer best quality product assortment at unmatched prices, delivered on time at one’s doorstep, it currently caters to the city of Bangalore and hopes to expand to four other locations by December this year. The founders of Fabmart and Fabmall, after a decade, return with e-grocery retailing and once again have the first mover advantage in one of the largest consumption category in the country. Hari Menon, Chief Executive Officer - Big Basket.com shares its current position and future plans.
Shikha Krishna four delivery windows 7-9 am, 11.301.30pm, 3-5 pm and 7-10 pm, each allotted to take only a certain number of orders daily. “This ensures that we meet our commitment for on time deliveries and not overload our delivery schedules,” says he. Orders with bill value above Rs. 1000 are delivered free, else there is a delivery fees of Rs 20. The website is also optimized for privacy of customer details and security of online transactions. Besides, a number of customers prefer to use ‘cash on delivery’ or Sodexho Vouchers. So is there a minimum order value to be purchased from Bigbasket? “No, we don’t believe in it conceptually. We do not want to restrict our customers, and this is something that we have followed from our Fabmart days in 1999,” says Hari. “Customers can buy only one product, and we would deliver it in their chosen time slot and location.” But then “people don’t buy one product”, says his experience from Fabmart. “We have serious shoppers”. Today the largest segment of BigBasket’s consumer base consists of dual working families, who are busy and want their staples to be home delivered. Another segment includes mothers who cannot leave their babies unattended to at home. It is also a preferred choice for working people who find it convenient to place an order online for their aging parents. At present Bigbasket.com is an absolute pure-play business with about 7000 SKUs of basic products. It would accomplish its order fulfilment and order delivery through ‘hub and spoke’ model, in which a large warehouse is established in a city suburb, which in turn supplies to hubs that are within the city. Hari explains, “The customer orders arrive at the warehouse and are processed. They are then segregated by customer order number and the hub name. Thereafter it is delivered to the respective hub, from where they are finally delivered to customers. Today, the service doesn’t have its own warehouse so its backend is Safal for fruits and vegetables and Metro Cash and Carry for other products. It has three hubs at Yashwanthpur, Bannerghatta Road and Whitefield that cover all areas of Bangalore.” In the next 3 – 6 months time, BigBasket would have its own warehouse and would eventually deal with around 250 vendors and 12,000 – 15,000 SKUs. With about 20 delivery vans at present, the numbers would grow to 50 that would do the trips between the warehouse, the hubs and the customer, to ensure efficient flow of the inventory. In a retail category like grocery, which is visited by customers as frequent as twice a week, BigBasket being a pure-play model, has many advantages over its brick and mortar counterparts. However it has its own challenges that it needs to combat for its smooth survival. The biggest threat that the business faces at present is inefficient supply chains, where when BigBasket places an order of X number of detergents with its vendor, only X-5 is delivered. According to Hari, “Most often in a regular grocery shopping at a supermarket, items comprising only 80% of one’s shopping list are available. For the other 20% the customer has to go to her corner shop or look for alternate options, losing her time in parking, queuing up for billing etc. But while placing orders online, the customers expect all the products in their shopping cart to be delivered on time, as they want to avoid the hassle of going to multiple stores. Hence, to marry the risk of an inefficient supply chain and meet customer expectations in every order is the biggest challenge that we face at present.” He takes competition positively, rather encourages it as he believes that increase in competition would enable the whole category to grow. But believes that customers would be loyal to BigBasket, “if we provide them Value that includes good quality products, at a great price
Hari Menon CEO Big Basket.com