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As the Railways’ official kitchen manager, IRCTC, takes a cue from Indian housewives on hard-nosed bargaining for grocery and vegetable shopping, online grocery store BigBasket has popped up as one of the biggest gainers.
In the two years since BigBasket started supplying to the Railways, the Indian Railway Catering and Tourism Corporation (IRCTC) has emerged as one of its top 10 business buyers.
Starting with frozen chicken two years ago, the Bengaluru-headquartered e-commerce player has steadily increased the range of goods it supplies to the public transporter and added fruits and vegetables, pulses, dry-fruits and spices to its supply list. In addition, it has started supplying its private-label brands in some product categories.
To cater to the Railways, BigBasket participates in a reverse bidding process where it competes with brick-and-mortar grocery suppliers to quote the lowest price at which it can sell the product.
The e-commerce player hopes its business with the Railways will grow as IRCTC starts managing more kitchens. “How much we supply every month or quarter is decided based on bids held quarterly or monthly, for each city. In this process, we can revise our bids till the time the bid is open as it is an online platform,” Abhinay Choudhari, Co-Founder and head of new initiatives, BigBasket, told BusinessLine .
Heavy competition
In the race to provide the deepest discounts, BigBasket competes with other pre-qualified wholesale suppliers such as Big Bazaar, Metro Cash and Carry, NAFED and the National Cooperative Consumers Federation of India.
Currently, BigBasket supplies only to IRCTC kitchens at Noida, Delhi and Kolkata, which are operated directly by IRCTC. “We do business only with IRCTC, not with kitchens and canteens that the Railways has outsourced to others. As the Delhi kitchen is currently under renovation, we are supplying to the Noida kitchen,” said Choudhari.
The Noida Central kitchen is one of the IRCTC’s biggest, and sets the standards for other base kitchens. The kitchens catering to Delhi and Kolkata stations are among those that handle the maximum number of trains. “We will expand to other cities as IRCTC takes over other kitchens for modernisation. The Railways has such a plan for IRCTC and we hope to expand our business with the Railways,” added Choudhari.
BigBasket sources its products from 25 cities for IRCTC. Fruits and vegetables are procured from 4,000-odd farmers-collection centres. These products and raw materials have to meet IRCTC’s standards. The e-commerce player has appointed quality assurance teams at its collection centres and warehouses.
“For certain products, IRCTC specifies the brand; for others, there are specifications. In the case of oil and sugar, we supply the brands on demand; in the case of dals (pulses), spices, dryfruits, there are specifications that we meet,” Choudhari added. Interestingly, BigBasket has also started supplying its own brand private label brands like bb Royal, bb Popular and Fresho! to railways catering arm.
In the last one year, BigBasket has seen its business double for the large business and retail buyers. “We expect to see at least as much growth for Railways, which has zoomed from non-existent two years back to ₹ 50 lakh a month now,” aims Choudhari.
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