bigbasket enters two more cities in Kerala, projects annual turnover of ₹300 cr in two years

Leading -grocer bigbasket has announced entry into Thiruvananthapuram and Kozhikode in Kerala, extending its service beyond Kochi, where it has already had a presence. Co-Founder and CEO Hari Menon said here the Tata Group enterprise has set itself a 37 per cent-plus market share in Kerala within 24 months by achieving a turnover of ₹300 crore. 

Hari Menon, Co-Founder and CEO, bigbasket | Photo Credit: Vinson Kurian

Kerala’s significance as a crucial market for bigbasket is undeniable, Menon said here. Expanding to Thiruvananthapuram and Kozhikode is a natural progression, driven by the region’s growing infrastructure and demand. The response from Kochi had helped solidify the company’s belief in the potential of these two cities as well. 

bigbasket is currently present in 400 cities across the country and its online app has a rating of 4.7. Servicing 15 million customer orders per month, its current revenue stands at approximately ₹13,000 crore. This is sought to be doubled in the next two years, TK Balakumar, Chief Operating Officer, said.

‘Minimum support price’

TK Balakumar, Chief Operating Officer, bigbasket | Photo Credit: Vinson Kurian

The company boasts a customer retention rate of 85 per cent, among the highest in the industry. It has taken a big dive into sourcing local brands in Kerala just as does in other markets, in addition to private labels. From local, the company has now made a focused and targeted shift to going hyper-local. 

bigbasket has a 30,000-strong farmer connect programme with 65 collection centres across the country. They get paid the same day or the second day at best at prices 8-13 per cent higher than the ruling Mandi rate, says Menon. During times of glut and low prices, bigbasket offers farmers what it calls a ‘minimum support price’ that keeps them going for up to two months. 

Enhanced farmer-connect

Menon claimed that bigbasket has been able to retain its ranking as the largest e-grocer in the country and third largest retailer in the larger ecosystem after Reliance and DMart. Fruits and vegetables account for 15 per cent of its full-service model business. In quick commerce segment (delivery within an hour of placing order) this can go up to 50 per cent in some cities, he added. 

At least 85 per cent of fruits and vegetables are purchased direct from farmers. Apart from the full-service model (monthly orders/pantry stocking), bigbasket also offers BB Daily (milk, bread, eggs, dairy, snacks and beverages) and BB Now (express delivery service). These are available in Kochi in their full compliment, but Thiruvananthapuram and Kozhikode will deploy only the first model for now. 

Satellite city service

Menon said the ‘a single extended mega market’ that Kerala offers is what led bigbasket model to start operations in the three cities which could service satellite cities as well. It has learnt to live in ‘perfect harmony’ with kirana stores and the neighbourhood ‘pop-and-mom’ stores. In fact, its business model finds itself networking with 3.5 lakh kirana stores across the country. 

According to Balakumar, kirana stores continue to account for 95 per cent of the organised Indian grocery market. Supermarkets make four per cent of the whole, while e-grocery may have just broken the psychological one-per cent barrier. Product types/segment such as staples and cooking or breakfast and dairy have mostly held on to their usual raking in aggregate demand, said Menon.

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