- India’s largest grocery etailer, BigBasket, said it reached the $1 billion GMV run-rate mark and delivers 3.5 lakh orders a day
India’s largest grocery etailer, BigBasket, said it reached the $1 billion GMV run-rate mark on the back of very high demand in recent months, with more customers ordering online grocery stores after Covid-19.
In an exclusive interview with ET NOW, BigBasket founder and CEO Hari Menon also talked about getting Alibaba as an investor at a time when the ties between India and China are tense, saying that BigBasket is an Indian business with Indian management working with thousands of farmers in the region.
“We’ve seen really, really strong demand. We’ve grown by 20 plus percent last month, thanks to great tailwinds throughout these three months, we’ve now hit the billion-dollar mark on a GMV run-rate basis. We’ve closed May with Rs 650 crore sales. Sales keep on growing, we’re still growing and one of the things I want to talk about is that we think this will sustain.
Menon said many cities like Chennai, Mumbai, still face a lot of pent-up demand. The etailer has also turned a positive contribution margin, a measure similar to gross margins that e-commerce sites are closely watched on. “For three months now, we have been a positive contribution margin, because of the tremendous operational efficiencies we have achieved during this time.”
In the initial days of lockdown, BigBasket struggled to fulfill the orders, with persistent complaints that it was always out of slots. “We lost 80 percent of our workers 2 days after the lockout because they wanted to go back to their towns due to fear of the virus. We dropped from 2 lakh orders to 28,000 orders a day. One of the main things we focused on was how to get up and run quickly. We formed over 50 alliances to recruit locally-from factories to restaurants to cab aggregators.
The tensions between India and China have also placed the spotlight on India ‘s startup ecosystem, with more than half of the Indian unicorns backed by Chinese investors. BigBasket includes Alibaba among its investors. When asked if the changes in FDI rules and subsequent border conflicts will make financing difficult, Menon said, “We will follow the direction where capital needs to be raised. Capital can be raised from various parts of the world. We are a full Indian business, with Indian investors, managers, working with 15,000 farmers, we are trying to get as much as we can.”
Recently, Bigbasket acquired a 100 percent stake in DailyNinja, a daily milk delivery app located in Bengaluru. Since the launch of BB Daily in December 2018, Bigbasket has concentrated on expanding its subscription business to meet its clients ‘ recurring consumption needs at low delivery costs. Bigbasket customers are actually charging upper and lower delivery rates, which is ignored when a customer selects a subscription kit.