BigBasket to power Tata Neu's quick commerce drive, says Hari Menon

Neu Flash currently offers categories such as groceries, electronics, fashion, health, beauty, and baby care

With nearly 80 per cent of orders on BigBasket (BB) coming from quick commerce, Co-founder and CEO Hari Menon believes the platform will serve as the quick commerce arm for Tata Neu’s offerings.

 

“Yes, BigBasket will drive the quick commerce (QC) offerings for Tata Neu. In fact, Neu Flash is currently powered by BB Now,” Menon told Business Standard. 

Neu Flash currently offers categories like groceries, electronics, fashion, health, beauty, and baby care. To accommodate the growing number of categories, the company is ramping up its delivery partner network. While Menon did not disclose the exact size of the delivery fleet, he noted that it is being adjusted on a monthly basis.

 

Acknowledging that BigBasket’s transition to quick commerce was slightly delayed, Menon stressed that the delay has not affected the company’s unit economics.

 

Since shifting to quick commerce, BB’s average order value (AOV) has remained above ₹850, a blended figure. In comparison, AOVs in the QC segment are generally lower: Blinkit at ₹707, Swiggy’s Instamart at ₹534, and Zepto at ₹625.

 

“When we moved to quick commerce, we expected our AOV to be impacted. However, it has remained consistent at ₹850 over the past three to four months. This also means that we will achieve a positive contribution margin for the BBNow business soon,” Menon said.

 

To facilitate this transition, the company made key changes, starting with its user interface. “Earlier, customers had to choose upfront between scheduled delivery and QC format. We realised this created a bit of cognitive load on the customer. So we moved this choice to the end of the shopping experience,” he explained.

 

Another major shift was expanding to larger-format dark stores. Earlier, BB’s dark stores measured around 2,000-2,500 square feet; now, they range from 4,000 to 5,000 square feet.

 

“We have over 500 stores, of which 300 are already large-format stores. Large stores also mean larger SKUs (stock-keeping units). We have 25,000 to 30,000 SKUs, up from the earlier 9,000 to 10,000. By the end of March, the remaining 200 stores will also shift to the large-store format. We will add another new 200 stores by July,” he revealed.

 

This expansion will bring BB’s total store count to 700, but Menon believes there is no need to scale up to 1,000 stores like some competitors. The company is also expanding into tier-II cities, with QC offerings already available in 30 tier-II, III, and IV locations.

 

BB Now will soon introduce heavy appliances, though delivery will take an hour instead of 10 minutes. “This is due to our integration with Croma. We will offer washing machines, air conditioners, etc. But these will be fulfilled from 300-400 dark stores,” Menon said.

 

For quick commerce, dark stores typically serve a 1.5 km radius. However, for heavy appliances, the coverage area will extend to 6 km. This service is expected to launch by June-July 2025. Luxury and fashion products are also being incorporated through Tata Cliq. “This is available in three cities, currently. We are ramping it across the nation,” Menon said.

 

Another significant addition to the QC portfolio is Tata 1MG. “We already offer over-the-counter (OTC) medicines. From May 1, we will begin selling prescription (RX) drugs as well. BB Now will also pick up orders from the pharmacy,” he said.

 

More Tata brands are expected to integrate into the quick commerce ecosystem in the future.

 

However, this rapid expansion has delayed BigBasket’s IPO plans by a year. “BB Now will be profitable in four to five months, and over 100 stores are already profitable. Due to the quick commerce expansion, our IPO plans have been pushed back by 12 months. Also, we don’t want to go public while making losses — that’s a core Tata philosophy,” Menon added.