News Post

BigBasket to completely pivot to quick commerce

Entrackr · 22d

Tata Digital-owned grocery marketplace BigBasket is planning to pivot its business entirely to quick commerce. The move appears to be an attempt to chase opportunity in the 10-15 minutes grocery delivery space, which has been growing at a fast pace, and dominated by Blinkit, Zepto, Swiggy InstaMart and Flipkart Minutes. In a conversation with the Economic Times, BigBasket’s founders Hari Menon and Vipul Parekh stated that the firm will offer only 10-30 minute delivery in the coming weeks. For context, BigBasket is already engaged in quick commerce through BB Now, which contributes more than 50% of the total revenue. Citing sources, the report further added that BigBasket is targeting $1.5 billion (Rs 12,400 crore) in total sales for the current fiscal year and expects its quick commerce vertical to contribute more than 60% of these sales. Entrackr has reached out to BigBasket for more details. This development comes at a time when BigBasket is eyeing an initial public offering (IPO) in 2025 after becoming profitable. Earlier this year, Menon also mentioned that the company would achieve profitability once BB Now becomes profitable. However, BigBasket registered only an 11% increase in revenue, reaching Rs 9,468 crore in FY23, up from Rs 8,500 crore in FY22. At the same time, its losses surged by 71% to Rs 1,785 crore from Rs 1,040 crore. The company expects to close FY24 with 30-35% revenue growth. In the quick commerce sector, Zomato-owned Blinkit is leading with a 40-45% market share as of July this year, according to a recent report by brokerage firm UBS. Instamart holds a 20-25% market share, followed by Zepto and BigBasket with 15-20% and 10-15% shares, respectively. While the hurdle run that is every delivery to houses in Indian cities regularly trips up commitment to deliver in minutes, 10 or 15, the fact remains that ‘quick’ commerce has added an incredible layer of convenience to grocery shopping and more in India. That it also caught the incumbents on the wrong foot is even more obvious when one looks at the struggles of Amazon, Flipkart or even Big Basket to adapt to the new reality. Amazon Fresh remains one of the most vexing order experiences on Amazon, with its separate product grouping and billing within the same app. With the quick commerce firms expanding their SKU base exponentially as they get a better handle on warehousing and logistics, the move by BigBasket could be seen coming. What consumers will need to watch out for is a reduction in the type and quality of discounts they could hope to get, as we have seen a noticeable shrinkage on really good offers when it comes to the quick commerce firms. In a value conscious market, does that still offer a path to profitability? Time will tell.