Decoding the exemplar business model of the Bangalore based e-grocery store Bigbasket
Bangalore based online grocery shopping website Bigbasket has been taking the Indian e-grocery market by the storm.
The business model of Bigbasket is made up of two elements- hyperlocal delivery and inventory led.
The e-grocery company has combined the two models in order to achieve dominance in the market it has today.
Bangalore based online grocery shopping website Bigbasket has been taking the Indian e-grocery market by the storm. The online food delivery market in India has been booming as well. The market is estimated to reach $5 billion by 2020. The F&G market in India is the 6th largest in the world. More and more customers in Indian are reaching out to packaged and ready to eat foods as India is getting more and more urbanized.
Bigbasket was started in 2011 by a team of five members- Mr Hari Menon, Abhinay Choudhari, Mr Vipul Parekh, Mr V S Ramesh and Mr V S Sudhakar in Bangalore. Prior to starting this website, the same team had started one of India’s earliest e-commerce sites, Fabmart.com. They also opened an e-grocery business as a part of Fabmart.com. However, this website failed to take off and had to be sold to Aditya Birla group. However, the team didn’t let this failure deter them from their path and they went on to start Bigbasket.com in a few years which was a high success. Let us take a look at the business model of the e-grocery giant.
The business model of Bigbasket is made up of two elements- hyperlocal delivery and inventory led. The e-grocery company has combined the two models in order to achieve dominance in the market it has today.
In the inventory model front, the company buys products from larger scale suppliers like farmers, mills, P& G and stores them in their large warehouses and go-downs. From these stored units the customers are served according to their needs. Hence the customers are buying the products that can be preserved directly from the manufactures. For the products that cannot be preserved, Bigbasket works on the purchase-to-order model. They are in touch with local suppliers and farmers. This model helps in reducing the inventory price as well as in avoiding wastage.
Bigbasket sources products both locally and nationally. Items like apples, oranges, onions etc are sourced nationally, whereas many items are purchased from small mandis and vegetable markets. The place from where a product might be sourced all depends on what the product is and the surrounding factors.
Another aspect of Bigbasket’s business model is the “hyper-local model” where they have partnered with more than 2000 local grocery stores so as to deliver products in the customer’s neighbourhood in less than an hour.
The company has also used technology along with effective customer service offered with a large number of choices in their products
The e-grocer relies on products from its own label to generate revenue and profit. Apart from this the company adds a small margin to the products delivered by them to generate revenue.
The business model of Bigbasket has been a huge success and now the online grocery delivery site fulfils about 20,000 orders daily and has a dedicated team of 2000 working for it. It also recently acquired a local delivery company “Delyver” so as to strengthen its delivery services.
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