SUMMARY
The company is also restructuring its business model
It has raised close to $1.3 Bn funding since its launch
The company is backed by Alibaba and CDC Group
Online grocery delivery platform BigBasket has already achieved one of the milestones by entering the unicorn club in 2019. The company has used the funding to expand into 26 cities across India. Now, Big Basket is about to reach another milestone by achieving the breakeven point in 10 Tier 1 cities, including Delhi, Mumbai and Bengaluru, in the next three to four months.
By reaching the breakeven point, the Bengaluru-based online grocery store will generate enough revenue to cover all the operational costs they have incurred over marketing, delivery and discounts.
BigBasket’s cofounder, Hari Menon, said that the company will start discussing their way to profitability in 2020-21. Till then, the company has decided to micromanage the growth drive by looking at each city as an individual unit.
Moreover, it is also working on combining its two working models — 90 minutes delivery and next day delivery — as much as possible. The company has decided that it will push for 90 minutes delivery for almost 90% of the orders.
Menon told Business Standard that the agenda would be made possible by re-engineering its supply chain and logistics. The company said that it would combine all the large order together, which need to be delivered by van, whereas the small non-essential items will be delivered by bike riders within 2-3 hours from the time the order was placed. To make this possible, the company will set up a “smart algorithm” to decide what goes in the van and the bike.
Moreover, BigBasket is also opening quick-services warehouses called Dark Stores to ensure mass reachability and quicker delivery. The company believes that through these efforts, it will manage to optimise its services at a low cost and higher efficiency.
Founded in 2011 by VS Sudhakar, Hari Menon, Vipul Parekh, V S Ramesh and Abhinay Choudhari, BigBasket has managed to expand its catalogue by including household essentials and cosmetics, among others items of daily use.
It claims to process over 1.40 Lakh orders per day from its total user base of 1 Cr. Till now, BigBasket has raised over $1.02 Bn in funding from investors like Alibaba, CDC group, Mirae Asset Global Investments, Bessemer Venture Partners and Helion Venture Partners among others.
In the last financial year that ended in March 2019, BigBasket recorded over INR 3,250 Cr in sales, noting a 60% jump from FY2018. In the FY20, the company is targeting INR 5,300 Cr in revenue.
