With the introduction of eCommerce in India, many companies such as Flipkart, Myntra, shopclues, snapdeal and many more started their eCommerce business and some of them have become the first choice for the people around the country. But soon we saw the two companies which started its online services for the basic daily needs of the people. These two groceries giants are BigBasket and Grofers.
But both the grocery doorstep delivery services provider used two different strategies to reach to their customer base. Both the companies are backed by two large market players Alibaba and Softbank.
BigBasket backed by Alibaba while Grofers is backed by Softbank and Tiger Global Management. BigBasket which became the first choice of many of the consumers to get many daily needs items under one roof at the same time Grofers choose some categories to compete BigBasket. This competition in groceries market is just like Amazon and Flipkart.
As said by Ankur Bisen, who is an Associate Vice President of Retail and consumer product at Technopart Advisors, “a company should not choose certain categories in retail. This is because in groceries each and every product has its own share.
According to Albinder Dhindsa, co-founder of Grofers, the company was able to do sales of Rs 700 crore in the financial year 2018, which is Rs 250 more than the previous year. And now Grofers is planning to take its sale to Rs 2,500-Rs 3,000 crores in the financial year of 2019.
It was further said by the co-founder that over the two years Grofers is able to become popular between the lower middle class families often known as “motorcycle families”. Grofers is also into B2B vertical where it provides groceries to large restaurants and hotels at competitive prices. Apart from this Grofers is also a tie up with some third party brands where it gets good margins. We got certain news, according to which Grofers is in talks of getting about $100 million fresh funds for its development and reaching to more and more customers.
While Big Basket is just opposite to Grofers. The company is going to make gross sales of Rs 4,000 crores in this fiscal only. It also introduces some new categories and discounts to its customers to capture the market with its services. It constitutes different categories like from fresh fruits to even meats. The products include third party as well as in house-made. The in house products constitute a sale of about 36% of its total sales.
With large funds coming inside, BigBasket is now planning to expand its supply to categories like meat and beauty. It is still delivering meat but now it is getting supply from vendors. But the plan is to reach directly to the animal breeders which would be similar to its fresh supply of vegetables. It takes about 80% of its fruits and vegetables directly from the producers. It not only constrains the brokerage but also letting farmers to make good income.
Apart from this BigBasket is also planning to start its new services like subscription-based diapers and milk delivery business.
Wrapping it up
BigBasket and Grofers both have their own kind of business model and it is clear that both are getting good investors too.
But if Amazon and Flipkart will come into this same market then the situation can go a lot more competitive and these two companies (Grofers and BigBasket) will have to face a lot of turbulence as both are large giants with deep pockets.