BigBasket jumps into buzzy quick delivery segment; will bring all grocery services in one app

CEO Hari Menon told ET that the company will also be bringing all its grocery offerings in its main BigBasket app, which is being referred to internally as the ‘BB Super App’. BB Now, expected to be launched around the middle of December, will be part of BigBasket and the company has also started work to bring its subscription-based essentials delivery service, BB Daily, on to the main app, he said.

BB Daily competes with Swiggy’s Supr Daily, Reliance Industries’ Milkbasket and others. BigBasket’s other business-to-business (B2B) apps like BB Mandi may also be brought inside the BigBasket app.

“We realised it’s better to have all the offerings in one app. We will have a separate meat section as well. These are being worked out and will be launched soon,” said Menon, who cofounded the company which
Tata Digital bought in May this year. In comparison, Swiggy’s Supr Daily is a separate app, but Instamart is part of the main food delivery app.

ET first reported about
BigBasket’s plans to start express delivery in July. Menon had told ET then that BigBasket had gone deeper into the operational factors of delivering within three-four hours and now it was focusing on dark stores—delivery centres close to high demand neighbourhoods—bringing inventory and warehouse closer to the customer to power express delivery.

Online grocery adoption
has accelerated since the beginning of the pandemic and platforms are trying to woo users by promising to deliver groceries in 10 minutes.

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All of this comes when BigBasket is also emerging as the backbone of logistics for Tata Digital’s superapp services,
ET reported last month.

Offline Stores

On Wednesday, BigBasket
launched its first offline store for fresh fruits and vegetables in Bengaluru. The Bengaluru-based company plans to open 200 such stores by fiscal year 2023 and increase that number to 800 by 2026, Menon said.

The Fresho stores will essentially sell fresh fruits and vegetables in the store. However, to access BigBasket’s wider range of 50,000 products, customers can place orders online through the Fresho app and collect them at the stores at their convenience, Menon told ET.

It is still not decided if Fresho too will come to the main BigBasket app. Fresho is a private brand of BigBasket under which it sells fruits, eggs and vegetables on the platform.

“We want to be everything in grocery (business). This is very strategic in nature as a large portion of customers still want offline shopping for groceries and fresh supplies. The total addressable market is very big,” Menon told ET after the launch of the store on Wednesday. “There will be good chunks of users that remain physical.”

According to the company, this will help it reach out to as many as 500 million new users over a period of time. Menon said this is a significant growth opportunity.

Each Fresho store would be around 2,000 sq ft in size and requires an investment of Rs 50-70 lakh.

The Fresho store launched in Bengaluru has self-billing counters integrated with video AI tools that enable customers to pick items of their choice and weigh them at the counter through automatic computer vision and generate bills accordingly.

BigBasket had emerged as the second vertical etailer—after Flipkart’s Myntra—
to have clocked $1.1 billion in gross sales for the financial year 2021. It is on track to post around $1.7-1.8 billion of gross sales in the ongoing fiscal year 2022.

BigBasket had a 37% share in e-grocery, followed by Amazon (15%), Grofers (13%), Flipkart (11%) and Reliance’s JioMart (4%) in FY21, according to data from PGA Labs, the market intelligence unit of Praxis Global Alliance. This report predicted the Indian e-grocery market to touch $22 billion by 2025.

Similar to the click-and-pick model for Fresho, ecommerce major Amazon India
is also enabling pickups from the outlets of the More supermarket chain for its online grocery orders, ET had reported in August.

Amazon has done the same with Whole Foods in the US, where a consumer can order on Amazon Fresh online and pick it up from the nearest Whole Foods store in select cities. Amazon had acquired Whole Foods in 2017 for over $13 billion.