BigBasket is likely adopting the acquisition route to strengthen its position against upcoming players such as Flipkart and US retail giant Amazon’s pantry services in the egrocery space. According to an ET report, the egrocery platform is currently eyeing a stake in Bengaluru-based smart vending machines startup Kwik24.
Earlier reports had surfaced that BigBasket was in talks to acquire milk-delivery company RainCan as well as looking to foray into medicine delivery through a possible acquisition.
BigBasket is likely considering acquiring a stake in Kwik24 to increase its reach to offline customers. The egrocery company recently ran a pilot with Kwik24 to deploy smart vending machines in five apartment buildings in Bengaluru, a part of it’s ‘BB Instant’ service. Customers can order via the BB Instant app and can then pick up the products from the vending machines.
BigBasket is said to have received 90% repeat customers with this approach and is now looking to have Kwik24 on board full time to work on customised vending machines.
Founded in 2016 by Neeraj Ray and Samir Duggal, KWIK24 aims to transform the food retail market with India’s first patented, checkout-free Smart Connected Stores in offices, apartments, and colleges. These Smart Stores are accessible through the KWIK24 mobile app, which lets its users check what is available in each smart store, interact, and pick up products such as meals, snacks and beverages.
No checkout is necessary as the payment is processed in the background. The startup has installed these machines at over 30 corporate locations in Bengaluru, apart from deployments in residential areas through BigBasket, according to media reports.
After raising $300 Mn from Alibaba and other existing investors in February this year, BigBasket wants to expand its verticals and revenue sources. Despite attaining profits, losses increased significantly in FY17 for the egrocery platform.
As Inc42 reported earlier, the wholesale B2B arm of online grocery delivery startup BigBasket — Supermarket Grocery Supplies — increased its overall losses by almost seven times, reaching $96.35 Mn (INR 653 Cr) in FY17 from $14 Mn (INR 95 Cr) the previous year. Further, Innovative Retail, which runs the online grocery portal, registered a loss of $28.19 Mn (INR 191 Cr) compared to $15.25 Mn (INR 103.4 Cr) in FY16.
BigBasket is also eyeing expansion of its portfolio with private labels of cosmetics and meat. For its offline push, BigBasket has already started working through kiosks that will stock fruits, vegetables, FMCG goods, and other daily grocery items for sale through the BB Instant app.
A report by Kalagato revealed that as of March 2017, BigBasket held about 35% market share in the online grocery segment, closely followed by Grofers at 31.5%, and Amazon at 31.2%.
However, a lot has changed since then. The way etailers are now heading towards an omni-channel or a pivoted offline strategy, it seems that the days of ‘online only’ model will be soon over, atleast for low-margin categories like milk delivery or egroceries. Going ahead, how well this potential acquisition will be able to help BigBasket in its offline push to its grocery business will be interesting to watch.