BigBasket has reported a 36% increase in its revenue to INR38,180m (US$525m) in FY20 (ending March 2020). However, with overall expenses increasing 31% to INR44,114m (US$605m) the retailer reported losses of 26%, equating to INR7,099m (US$97m).
Intense B2B competition with the entry of big players
Supermarket Grocery Supplies (SGS) operates e-grocery platform BigBasket, which supplies Kirana stores, pharmacies, hotels and other institutions. Although India’s retail market is dominated by traditional trade with 12m Kirana stores, the entry of established names into online grocery retail has made B2B ecommerce more challenging.
- Reliance Retail’s JioMart is already using Kirana stores as franchise partners to deliver non-perishable grocery items in India
- Flipkart Wholesale has also announced the inclusion of food and grocery in its inventory
- Amazon Fresh, Grofers and Swiggy are also investing in online grocery deliveries
Tata investment will help BigBasket compete with the likes of Flipkart and Amazon
According to reports, Tata Group is in the final stages of offering around US$1.3bn to acquire a 60% stake in BigBasket. The backing of the Tata group will be extremely valuable for the business as major competitors Flipkart and Amazon sharpen their focus on the food and grocery sector. Tata is reportedly planning to integrate BigBasket with online pharmacy 1mg, which it also plans to acquire. If successful, shoppers will be able to buy across multiple categories in food and pharmaceutical, helping create a stronger total offer.