Tata-owned BigBasket enters offline grocery, will invest up to Rs 400 cr

Online grocery company BigBasket on Wednesday said that it has started selling fruits and vegetables through an unmanned physical store in Bengaluru. It plans to expand its footprint to 200 physical outlets pan India by 2023 and 800 by 2026.

The store in Bengaluru was opened in October and has been seeing 500-600 footfalls daily. “At around Rs 50 lakh per store, the total investment will be Rs 300-400 crores for 800 stores,” Hari Menon, co-founder and CEO of BigBasket, told Business Standard.

“The strategy is to reach the next 500 million who are yet to buy groceries online. The Fresho stores will also work on the click and pick model where customers can order from more than 50,000 SKUs online and pick it up from the Fresho stores,” he added.

Tata Digital had acquired 64.3 per cent of the total share capital of BigBasket’s parent company Supermarket Grocery Supplies earlier this year. Menon said that the company is well-capitalised currently and no additional investment is on the horizon.

Ankur Bisen, senior partner at management consulting company Technopak, said: “It was anticipated that Tata’s acquisition of BigBasket was part of a larger play of digitally enabled commerce. I think this is an interesting change of direction in line, but it is not surprising given that DMart and Reliance, too, have such grocery stores.”

“Even Amazon is trying to overtake Tesco in the UK in terms of physical grocery stores,” he added.

The Fresho stores are designed to have self-billing counters integrated with video AI tools that enable customers to pick items of their choice and weigh them at the counter. Automatic computer vision can identify the items and generate bills accordingly.

“The produce stocked at the stores is backed by our extensive farmer programme where we partner with over 30,000 farmers across the country to source fruits and vegetables directly. There is complete traceability for all fresh produce built in our supply chain which allows us to communicate details of the farmer for each product to our customers,” the company said.

The online grocery company is also gearing to launch its quick commerce service, called BB Now, which will deliver essentials within a timeframe of 15-20 minutes of an order being placed.

The company’s grocery delivery service is currently present in 40 cities across the country and it claims to cater to 12 million customer orders per month. In FY21, bigbasket hit the milestone of $ 1 billion of gross sales for the first time.