Bigbasket or Grofers case study

Hello friends my name is Gauhar Ali

we gonna discuss about bigbasket business model,our grocery leader in India

so the story starts in 1999

when there was a .com boom

and this is one of the 1st e-commerce company who came to buy online

after 2 years they added grocery too

in starting a lot of people came online but

you know in starting people don’t buy online

only COD can operate at that time and not online payment

so people came but did not buy it

so they analise and they came to offline

and in south india they got a huge success

they opened a fab mart and sell everything in it

but still it did not make much profit and in 2006 birla group overtook it

and in 2011 they again return online

under sell retail network

in 2011 only they got a funding

do try to understand this,if you want to have a grocery business

so what are the options

1st is inventory modal,means

I will buy product directly from the company at a discount rate

next I will be selling to my target audience and rest is my profit

2nd is market place,like amazon and flipkart do

here if I will get an order then I will transfer to other and they will deliver it

3rs is hybrid

here I am doing the both 1st and 2nd

logically they did marketplace,they captured small-small grocery shop and made a pact with them

and now the orders they get via there app and website,they do forward to these small grocery shops and deliver the product via a delivery boy

so this was the simple process

slowly they got the fundings and they started to grow and then they shifted to inventory model

because in this there is a lot of margin and you can too control your quality

they have 18000 listed products,more than 1000 brands

and still it’s going under loss but slowly and slowly there revenue is increasing

last year they did Rs 1176 crore revenue and had a loss of Rs 191 crore

they had a 1500 ticket size

and 650 ticket size if one opts for express delivery

there target is by the end of 2020 we gonna to take 2000 crore revenue

in my opinion fab mart too was a good business model but in 1999’s internet used to be a new technology

and people don’t trust internet and online payment,not good speed,and not visual websites

so they took a good step by coming to offline market

and made money and reinvested afterword

so from 2011 they are in loss,but in coming years they will be coming in profit because it’s inventory modal will keep on increasing

with the advent of revenue there expenses will tend to decrease

they do a simple strategy by ranking it’s customer

basically if you order today then you are not it’s customer

so suppose in 3 month you ordered 2-3 times,then you became a silver customer for them

silver customer means that this is our potential customer

and their platinum customer comes 95% repetadely

so your expenditure get’s decreases time to time countanously

in 13 funding round,they had taken 884 million dollar

and recently they had taken 300 million dollar funding from alibaba

in June 2015 they acquired deliver and that inquisition was good according to me

because of this they are able to deliver products on time

before that in inventory modal they used to get delay in delivery time

but now they can deliver vegetables in 2 to 3 hours

in vegetable you need to deliver within 1 hours and not in 2 to 3 days

so this thing is possible due to delivery acquisition and I will be giving them +1

in grocery they operate in 35% of profit margin and in other item 10-12% margin

you may be finding it more but if you see there expenditure-website,

app,delivery and many more things to run

this makes there expenditure and still they are under loss

there is 2 trillion dollar economy in this globally

out of which 300 billion dollar online is there

if we take globally then it will fluctuate 15-30% in online retail

if you want to do this type of business then target the cities

because in cities there is a lot more awareness,less acquisition cost and you will be getting at a less rate

ultimately will tend to sell in your products and will increase your potential customer

in village your accusation cost will tend to rise due to lack of education

I hope I gave you alot more information on this

with my research and analysis.

If you wanna appreciate my content then pl share this article as much as possible .

I apologize for any error.

Be happy

Be curious 🙂

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