Is Indian Grocery Supplier Startup Big Basket Heading Towards Non Reversal End

06:52:00

In 2015, Online Grocery application buzzed Indian market in big way and also attracted all leading investor community which poured in around $500 million. On paper it looks very impressive and similarly their concept were very attractive.

The Capital intensive segment forced all players to investment in warehouses and delivery chain while the placement of order did not picked up. Most of the Grocery player went ballistic in hiring the best branding company to handle their brand as well as invested very heavily in print and digital media. We all know that how companies like Gofers and Pepper Tap struggled in the market place and downsized their operation leading to major losses.

On a contrary; Big Basket managed to convince existing and new investor about their march towards profitability and positioned itself by partnering with Shops, selling private branded product. Delivering more than 50k order every day collected across more than 18 cities they operate.

Coming to my concern and I am sure that Big Basket management will be even more concerned about it, is the conversion ratio. I do not think that even 300k delivery per day will be sufficient for them to be profitable. I observed that they come out with full or half page advertisement in print media more or less thrice a week and also believe that the intention is to attract organic user base. On Google Play they have less than 5 Mn user base ( On the higher side of the assessment) and must have spent  millions of $ in advertisement.


In my point of view; They should take the direct user acquisition strategy and can achieve that through direct integration in Smartphone. Believe me the return will be better than what they are getting right now.

The continuous billboard to print media advertisement and that too on front page is not going to help them given the fact that their application rating on Google play is only 3.9 which clearly shows that users are not happy with the performance of the application.

I will not be surprised, if one good day Indian newspaper and digital media will be flooded with Big Basket holding company decision to restructure the operation to cut down the cost but I will be very happy to see if they announce that they are profitable on PAT level.


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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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