Online grocery startup BigBasket racked up its gross sales of $1.1 billion, or Rs8,000 crore, in the financial year 2021, enriching only as the second vertical e-commerce pro in India to do so after online fashion retailer Myntra.
Horizontal e-tailers like Flipkart and Amazon India, who market all varieties of goods, have earlier crossed the billion-dollar sales mark.
BigBasket, now majority-owned by Tata Group, has arrived at this milestone which symbolises the high growth that online grocery platforms have observed since the coronavirus outbreak last year. The pandemic has advanced growth and extension appraisals of these platforms by at least one year. Now, the Bengaluru-based e-grocer is multiplying down on the growth momentum and is foreseeing to accumulate gross sales of around $125 million, or Rs 910 crore, by the end of May, which is more eminent than July last year, when its sales had topped.
The prevailing wave of the pandemic has taken a toll on discretionary spending, but consumers are frequently shopping for essentials online as they remain indoors.
Consultancy firm Kearney foresees the online grocery space to rack up an annual growth rate of 40-50% this year. According to various industry reports, e-grocery was worth $2.5-$3 billion in 2020.
“Last year was big for everyone. Consumer brands have registered a growth of two times on e-commerce platforms than before. BigBasket, being the online grocery leader, benefited the most as consumers moved their purchases online after the country went into lockdown. If it had to happen in any year, it would be 2020,” said Arpit Mathur, partner at Kearney.
He predicted rival Grofers to be around 60-70% of BigBasket’s size.
Though Grofers refused to comment.
While existing buyers continue to buy groceries online, traditional offline customers are generating additional growth across platforms.
The wave has also led to longer delivery timelines, at least in markets like Bengaluru where the wait times are at least 3-4 days to get online orders delivered.
BigBasket is currently dispensing tokens before an order is placed.
On average, platforms including BigBasket are taking longer to deliver, though the situation seems to be better in cities like Mumbai or Delhi.
Mathur said, “This is a temporary issue and not a structural one. This time, delivery staff and warehouse managers have also gotten infected (with the virus) impacting platforms like BigBasket. What many consumer brands are doing is to prioritise large-size units instead of single units and focusing on bulk (packets) pushing up average order size,”.
There has been an uptick in the average order size on BigBasket, Menon said, as people buy more to stock up in advance. Typically, these orders are Rs 1,200-Rs 1,700 in size.
