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With Amazon Strengthening Its Grocery Delivery Army, BigBasket Makes Offline Foray With Kiosks

With Amazon Strengthening Its Grocery Delivery Army, BigBasket Makes Offline Foray With Kiosks

The Development Comes Just Over a Month After The Startup Raised $300 Mn From Alibaba, Others

Online grocery delivery startup BigBasket is reportedly looking to tap the offline market through kiosks that will stock fruits, vegetables, FMCG goods and other daily grocery items. The development comes just over a month after $300 Mn Series E funding in a round led by Chinese conglomerate Alibaba along with the participation of Abraaj Capital, Sands Capital and IFC.

As per sources in the know, BigBasket is planning to install the offline kiosks around residential apartments and office complexes.

To that end, the Bengaluru-headquartered online grocery platform has already launched a pilot for its new offline service and has also built a separate app known as BB Instant.

With the aim of further bolstering the service, BigBasket is looking to introduce a subscription programme for everyday, essential items like milk, bread, etc.

Confirming the development, Hari Menon, founder and CEO of BigBasket, said, “The pilot is underway at select apartments and office premises. We have kept it as a separate app and are looking to scale this up as it will solve a genuine user problem for items they need quickly.”

“Based on the initial feedback, we are looking to sell certain stock keeping units (SKUs) in these kiosks which can be instantly bought by a shopper after firing the app,” he added.

Menon, however, clarified that the move was not meant for onboarding offline customers. Instead, it is geared towards strengthening BigBasket’s instant delivery capabilities, in order to further boost sales.

According to sources, the move is in line with the company’s goal to touch $46 Mn (INR 300 Cr) in monthly sales within the next six months. At present, it boasts sales of over $30.7 Mn (INR 200 Cr) on a monthly basis.

As stated by Menon, the company is aiming to install several thousand of these offline kiosks across the country over the course of this year. At present, BigBasket offers express delivery of orders within 60 to 120 minutes.

Menon stated, “Unlike global markets, Indians like fresh items as far as fruits and vegetables are concerned. Items like milk would work on subscription. So, we would start with that and perhaps add a few more essentials to go with that which a user can add on top.”

From 6 Mn Registered Users To Breaking Even In Two Cities: BigBasket Stats

Started by Fabmall founders VS Sudhakar, Hari Menon, VS Ramesh, Vipul Parekh, and Abhinay Choudhari in 2011, Bigbasket is an online grocery delivery startup that boasts more than 6 Mn registered customers.

Currently, on an average, a user purchases thrice a month from BigBasket. The average ticket size of orders made on the platform ranges between $21.5-$23 (INR 1,400 and INR 1,500).

It currently offers about 20,000 products from over 1000 brands and has a presence in 26 cities across the country, including in Bengaluru, Hyderabad, Mumbai, Pune, Chennai, Delhi, etc.

The hyperlocal grocery delivery startup recently forayed into the HoReCa (hotels, restaurants, and caterers) segment to strengthen its B2B business. For the same, it partnered with SnapBizz, a retail-technology firm, in an effort to transform India’s kirana stores into technology-enabled modern retail stores.

As per the company, it closed the previous fiscal year with $220.38 Mn (INR 1,410 Cr) in revenue and broke even in two key markets – Bengaluru and Hyderabad in its slotted delivery business.

Since its inception, Bigbasket has been backed by a bevy of investors, including Brand Capital, Bessemer Venture Partners, Ascent Capital, GrowthStory, Paytm Mall, Alibaba Group and Abraaj Group, among others.

Most recently, in the first week of February, the Bengaluru-based company raised a massive $300 Mn Series E funding in a round led by Chinese conglomerate Alibaba along with the participation of Abraaj Capital, Sands Capital and IFC. Alibaba got the CCI nod to invest in BigBasket recently in December 2017.

Earlier, speculations also surfaced around Alibaba and Paytm Mall together aiming to acquire 35-40% stake in the hyperlocal grocery platform, against a total investment of $300 Mn. At that time, it was also reported that the deal would value BigBasket at $850 Mn.

Around the times that reports of BigBasket’s $300 Mn fundraise surfaced, speculations of Paym Mall planning to integrate with its major investor Alibaba’s latest investments, BigBasket and XpressBees, made the rounds.

The Growing Market Opportunity In The Indian Grocery Industry

As per a Goldman Sachs report, the Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022. Morgan Stanley expects the online food and grocery segment to become the fastest-growing segment, expanding at a compounded annual growth rate of 141% by 2020 and contributing $15 Bn, or 12.5%, of overall online retail sales.

The space is also attracting major traction from the country’s leading ecommerce players such as Paytm, Flipkart, and Amazon. Other startups in the online grocery sector include ZopNow, Satvacart, Godrej Nature’s Basket, Quikr, Grofers and DailyNinja, among others.

Recently, in the fourth week of February, Amazon announced the launch of 15 fulfilment centres to create a specialised network for its hyperlocal grocery delivery business on Amazon Now.

The new centres have come up in the four cities where Amazon Now is currently available: Bengaluru, Delhi, Hyderabad and Mumbai. Earlier, it became the first foreign company to start with its food retail venture in India.

With the entry of players from other segments, the Indian online grocery segment is set to witness intense competition in the near future. In this light, BigBasket’s decision to foray into the offline market is a strategic move to bolster its sales, while also strengthening its presence in the space.