Case Study Analysis: BigBasket.com

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BigBasket.com was India's first online grocery retailer. It successfully provided last-mile delivery to customers in Bangalore, Hyderabad, and Mumbai. While traditional brick-and-mortar grocery stores struggled, BigBasket became the first online grocery retailer to report a breakeven in one of its operating cities in March 2014. The document then discusses strategic groups and mobility barriers in the retail grocery industry, sources of customer value for online grocery retailers like BigBasket, customer segmentation strategies, BigBasket's value chain and margin management, and the long-term resources, capabilities and profitability of BigBasket.

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Case Study Analysis: BigBasket.com

1. 20th September 2019 Retail Business Management Group No: 5 Riya Varghese Bharat Debbarma Arya K Puthussery Kevin

2. Big Basket.com BigBasket.com, India’s first online grocery retailer, was set to break this mindset. Customers were signing up at an aggressive rate based on word-of- mouth. With a commitment to provide a top-quality product assortment at competitive prices, Big Basket successfully provided last-mile delivery to customers across Bangalore, Hyderabad and Mumbai. While traditional brick and mortar grocery retailers were struggling, Big Basket became the first online grocery retailer to report a breakeven in March 2014 in one of the cities where it operated. 2

3. 3 1. What do the terms “strategic group” and “mobility barrier” mean? How can they be mapped? • A strategic group can be from any type of business and depending on the industry, are defined within a dimensional construct. Strategists will often display the market position of each competing company on a two dimensional grid. Mobility barriers are difficulties of moving the company from one strategic group to another. Because of them company is not competing with competitors with similar market profiles, but with those that sell products in the same price and quality group. Strategic mapping is usually done on the basis of • Price/ Quality • Geographic coverage • Planning style and Experience • Financial resources and Managerial capability • Quality differentiation • Extend of geographic coverage • Pricing policy etc.

4. 4ADD A FOOTER Explain this with respect to the retail grocery industry in India. Elaborate on the reasons for performance differences between strategic groups. Also, comment on the future of this new idea of online grocery shopping • Technology, Internet, Domain Knowledge and logistics are the main factors which affect the success • Expansion Strategy • Margin making • Bargaining Power • Branding of owned products

5. 5

6. 6 2) What are the sources of customer value for online grocery retailers? Explain the value offered to customers by Big Basket. Do you think the value propositions offered by Big Basket are going to permanently change the shopping habits of consumers and thus reap long-term benefits for Big Basket?

7. 7 What are the sources of customer value for online grocery retailers? • Superior shopping convenience • Good shopping experience • User friendly websites or App • Quality of Products • 24/7 Customer Service • Rapid Internet Users • Price level • Customer Service • Opportunity to find good deals • Offers • Last mile delivery

8. 8 Explain the value offered to customers by Big Basket • Availability of various payment options • Affordable pricing • Superior Quality of Products • Timely delivery of products • 24/7 availability of Customer Service • User friendly Website

9. 9 Do you think the value propositions offered by Big Basket are going to permanently change the shopping habits of consumers and thus reap long- term benefits for Big Basket? Yes, The value propositions offered by Big basket will change the shopping habits of consumers • Internet penetration • Customers are signing up at the rate of 20% per year with 65% retention • Market potential of India at 2013 was $1 Billion and is expected to reach $17 Billion by 2017 • A huge time is spent on grocery stores and the consumers tend to find it tiring and wastage of time.

10. 10ADD A FOOTER

11. 3.Explain the customer segmentation strategies for online groceries like Big Basket • Working couples who have scarcity of time as an issue because they wont be able to enjoy their weekends spending them on grocery store. • Tech savvy males, working women involved in party purchases or weekly purchases also consider Bigbasket as a boon. • Middle class segment constituting only 5% of the total population are also a segment of target customers • Double income post graduates who once lived abroad and are ready to pay more for convenience. • Planned buyers and not impulse purchasers.

12. 4. Explain the value chain of Big Basket. How does it manage margins • The introduction of private label brands by Big Basket helped in expanding margins. • Also they used direct procurement from suppliers and removed wholesalers and other intermediaries from the supply chain that helped in increasing profit by 20 to 23% • Customer orders were picked by pickers and packed by packers. • The warehouse stocking model also contributed to the growth of Big Basket. • They procured fruits and most perishable items directly from the farm. This farm to home approach acted as an added advantage.

13. • They sold organic imported and day to day food products. • They kept inventory in stock for up to 2 days only. • They took order based on demand. • The analytic team and technical team of engineers helped them in tracking demand and successfully execute just in time inventory system. • They also focused on hub and spoke distribution with many dekivery vans and efficient logistics system to ensure on time delivery.

14. 5) In light of the concerns of investors and critics, discuss the resources, capabilities and profitability of Big Basket in the long run. There are many capabilities of big basket in the long run: • It will be very easy to access with its design • Quick browsing can be done through the app that is created • Receipt for the order will be given immediately • Shopping can be done anytime • They have high Margins

15. The profitability of big basket are as follows: • Big Basket offers 25 warehouse which gives them good profit • 63 storage facilities. • The company claims to have 3 million repeat customer and its targeting revenue of 1900 crore

16. 6) Explain how online grocery retail is expected to perform globally. Why is India different from other markets? • Big basket is expecting a growth of $150 billion in 2017 to $334 billion 2022 • 2.9% is online grocery sales and the market is wide in 2017 • It has been seen that there is a mid point for its operations in the US, mature market in Korea and in China, small growth is experienced as it has a lot of retail stores. • In India hybrid stores are said to become more prominent • Competitors like Aaram Shops expands soon as they are not pure online retailers

17. THANK YOU! Rajagiri College of Social Sciences Rajagiri Valley 682039 By Group 5

Case Study Analysis: BigBasket.com

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Case Study Analysis: BigBasket.com