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Mar, 05 2018

Online Grocery BigBasket to go offline post Alibaba investment

The company has an express delivery programme as well which promises delivery within 60-120 minutes.

Following an investment by the Chinese e-commerce giant Alibaba, Online grocer BigBasket is keen to go beyond its online-only model so as to counter the recent ventue of Amazon and Flipkart into the offline business.

The Bengaluru-based company is looking to supplement its core online business with offline kiosks that will stock daily groceries, fast-moving consumer goods, fruits and vegetables. These kiosks will be installed across various apartments and office complexes. BigBasket has already started a pilot for the new service with a separate app called BB Instant. To get users into increasing their purchasing frequency, it is also considering starting a subscription service for essential items like milk and bread, among others. BigBasket recently closed a $300 million financing round led by Alibaba.

Hari Menon, founder and CEO, BigBasket said they were looking to scale up their offline kiosks into thousands of such installations across the country as it steps on the gas for aggressive growth this year.

Menon said, "The pilot is under way at select apartments and office premises. We have kept it as a separate app and are looking to scale this up as it will solve a genuine user problem for items they need quickly. Based on the initial feedback, we are looking to sell certain stock keeping units (SKUs) in these kiosks which can be instantly bought by a shopper after firing the app. This was not a move to get users who do not make online purchases on to the company's platform. Instead, it is aimed at servicing the instant delivery market of its existing base to push overall sales.”

The company has an express delivery programme as well which promises delivery within 60-120 minutes. BigBasket's rival, Amazon, too has a separate platform for two-hour grocery deliveries under Amazon Now. Amazon had set up 15 fulfilment centres specifically to serve the daily essentials and grocery business.

Menon said they were exploring the idea of starting subscriptions for essentials like milk and eggs. "Unlike global markets, Indians like fresh items as far as fruits and vegetables are concerned. Items like milk would work on subscription. So, we would start with that and perhaps add a few more essentials to go with that which a user can add on top."

He added that this will increase frequency of visits and purchases on the platform. At present, on an average, a user purchases thrice a month on BigBasket. The average ticket size of orders on the platform is about Rs 1,400-1,500.

BigBasket is looking to ramp up to Rs 300 crore over the next six months from its clocking monthly sales of about Rs 200 crore.

BigBasket's entry into the offline mode comes at a time when prominent names in e-commerce are betting big on this segment. Flipkart has revived its grocery business on a smaller scale and is looking to expand it nationally this year while Grofers and Amazon continue their focus on the segment.

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