Online grocer BigBasket has entered the business to business (B2B) space and has started selling its products to Kirana Stores, Hotels and Restaurants. The company presently has 1,000 Kirana Stores on board, apart from various Hotels and Restaurants across the Country.
Hi Everyone Today We Will Talk About How Big Basket is Expanding Its Reach
The development comes about two months after it launched its specialty food business under the marketplace model. For BigBasket, exploring the B2B model is aimed at achieving volumes as margins are thinner in this segment compared to its consumer focused business which garners 20%-23% margins, BigBasket’s co-founder and CEO Hari Menon said. The company has been able to cater to a larger base and enter the B2B segment because of increased procurement enabled by direct contracts with farmers, he said.
BigBasket operates on an inventory-based model where it delivers products from large warehouses directly to shoppers.
Big Basket is procuring over 60% of fruits and vegetables directly from farmers. “We plan to get 3500 farmers on our platform by next year from the present 1100.” Menon said. The company has 20 collection centres for the procurement.
BigBasket is present across 25 cities and does not plan to expand further. We are looking at the big volumes’ play in the B2B segment while on the main grocery business private brands are getting the highest focus. Private brands should contribute 40% of the sales compared to 32% now, he said.
Backed by Dubai’s Abraaj Group, Ascent Capital, Bessemer Capital, among others, the company has two key private brands — Fresho and BB Royal. BigBasket competes with the Softbank-backed Grofers —which has been downsizing its operations and employee strength. Among the horizontal commerce major Amazon’s grocery platform Amazon Now is also a potential competitor for BigBasket and Grofers.