Tata-backed BigBasket is aiming for 60 percent growth during the festive season compared to last year. The online grocery platform expects to become profitable in the next 9-12 months, it is expecting a revenue growth of 40-50 percent this year as compared to last year.
With the rise of quick commerce platforms in India, BBNow, BigBasket’s Q-commerce service, now contributes 50 percent of the overall revenue and is expected to generate 70-80 percent of revenue within the next year.
Vipul Parekh, Co-founder and CMO of BigBasket, spoke with Storyboard18 about the platform’s plans to launch an IPO in 2025 and discussed their marketing and expansion strategies.
Speaking about the growth of Q-commerce platforms in India, Parekh said, “I think the growth of Q-commerce platforms has achieved two things: it has created a completely new category of customers who enjoy the convenience of getting groceries delivered in 10 minutes. The grocery industry was growing at 30 percent per year, but due to Q-commerce, it has grown at 80 percent per year. This growth has not only benefited Q-commerce platforms but has also boosted the overall grocery category.”
In the next few months, BigBasket plans to move toward delivering all its products within 10 minutes. “The focus will be solely on quick commerce. The goal is to serve all products to our existing grocery customers, not just groceries but also other categories. One significant change is that, previously, we offered slotted deliveries; now, it’s two-hour delivery, and eventually, that will be reduced to 10 minutes as the default delivery time.”
Expanding Private Labels
BigBasket has successfully expanded its private labels into multiple categories. The recently launched frozen brand Precia, in collaboration with Chef Sanjeev Kapoor, aims to sell 1 million units this year.
Private labels contribute one-third of BigBasket’s overall revenue. Parekh stated, “We will continue to increase the number of categories we cover through private labels. We are launching many new products. We already have close to 50 brands under private labels and will keep adding more.”
Parekh elaborated, “As we expand into quick commerce, we will add new categories, through our private labels. Whether it’s beauty, general merchandise, or stationery, we will definitely introduce more private labels to provide better quality products to our customers.”
In the general merchandise category, BigBasket plans to expand its offerings from kitchen items to stationery, such as cooking pans, crockery, plasticware, dustbins, and bathroomware, among others. When asked if additional investment would be required for this expansion, Parekh said, “The investment primarily involves product development. We typically find manufacturers to work with us and develop these products. The effort required would be in setting up a research team to find the right sources or manufacturers.”
Increasing Reach
Discussing BigBasket’s marketing strategy, Parekh said, “We already have a large customer base. Our campaigns target our current customers and people who are not yet purchasing through Q-commerce. The second strategy is to acquire new customers. Today, new customers come to us through multiple platforms such as Meta and Google. We spend a considerable amount on digital platforms for targeted campaigns and app installations.”
Elaborating further, Parekh said, “We don’t have a fixed budget for advertising. We measure brand campaigns based on various factors such as cost per view and customer acquisition targets. Industry-wide, in the quick commerce business, the cost per customer acquisition typically ranges from Rs800 to Rs1,000 per customer, depending on the target customers and the marketing spend.”
Growth and expansion
At present, BBNow has 400 dark stores in 35 cities. It plans to add 100 more such stores this year. Plans are also to expand to 5-10 cities next year — within the cities where BigBasket is already offering slotted deliveries.
Citing premiumization as a factor in the rapid growth the platform has seen in recent years, Parekh said, “The trend toward premiumization is reflected in the rise of quick commerce as a sector in the country. Many grocery stores offer cheaper prices, but customers are willing to pay a premium for superior service.”
Parekh said, “This trend is evident in the sales of our premium product categories offered through our private labels. Whether it’s premium chocolates or other categories, customers are willing to pay for premium products. We see this trend across all categories, with particularly high demand for organic fruits and vegetables.”
When asked about BigBasket’s goal of becoming profitable, Parekh said, “We are close to achieving a positive contribution margin, which is covering all our operating costs. We expect to be EBITDA profitable in the next 9-12 months. Specifically, we anticipate achieving EBITDA profitability in the first quarter of the next fiscal year, i.e., April-June next year.”
“Our plans to launch an IPO in 2025 are on track, with no further delays expected.”