Online grocer Bigbasket, that entered the Gujarat market today, is looking to touch a revenue of $1 billion by 2017-18 and be among the top three grocery players in the country (including offline stores) from a current revenue of Rs 210 crore.
"We clocked a turnover of about Rs 210 crore in FY15, and hope to end the current fiscal with a turnover of around Rs 1,000 crore. The target is to have revenues of $1 billion by 2018 March, and be among the top three grocery players in the country including the offline players as well," said Hari Menon, co-founder and chief executive officer of Bigbasket. He added that the gross margins were around 22 per cent and the company was working to take it up to 24 per cent. It has already raised $80 million in multiple rounds of funding.
Bigbasket is in the process of raising Rs 800 crore or about $120 million to fund its expansion and acquire new customers. It currently has a customer base of around 800,000 and about 1.5 million registered users. The mobile application is downloaded by over 1 million users every month and the average visits per customer stands at around 2.6 per month.
As a part of its plans to expand footprint, Bigbasket aims to be in 28 cities by February next year that would include 20 tier II cities. It is already present in the tier I cities of Bangalore, Mumbai, Hyderabad, Pune, NCR and entered Ahmedabad today.
It would start Kolkata operations in about a fortnight. The second leg of expansion would come from the tier II cities like Surat, Vadodara, Mysore, Madurai, Vijayawada, Nasik, Patna, Bhopal, Indore etc.
As Menon pointed out, there is not much difference in customer behaviour when it came to grocery shopping amongst tier I and tier II cities. This helps Bigbasket manage its logistics better, which combines local as well as national sourcing. "Some items like potatoes, onions, oranges, apples are sourced nationally from the major producing hubs. Some items are sourced locally from 'mandis' and also local farmers," Menon said. In fact, Bigbasket is setting up 16 collection centers close to farming centers across the country; it already has six up and running.
Contribution of vegetables and fruits to its overall sales is around 20 per cent, which is higher than that of a physical grocery store (around 6 per cent), claimed Menon.
The penetration of e-commerce in India retail industry (valued at $550 billion) is just about 0.4 per cent. Grocery accounts for around $350 billion of the overall retail in the country. "In mature markets like the US and China, the penetration is much higher at 10-11 per cent, and hence there was enough room for growth," Menon claimed.
Bigbasket also sells grocery items like tea, coffee, rice etc under its own private label, which now contributes to around 32 per cent of sales. Menon sees this going up to around 40 per cent in the next six to eight months.