Bigbasket eyes quick commerce for electronics with Croma tie-up

Bengaluru: Tata-backed Bigbasket is in discussions with its sister company Croma to sell electronics and appliances through its quick commerce vertical.

"We will hopefully strike a deal with them to sell via quick commerce. Imagine getting a washing machine delivered in 15 minutes," Bigbasket co-founder and CEO Hari Menon said at the India Global Innovation Connect in Bengaluru on Thursday.

While acquiring new online users has been a challenge, average order value for quick-commerce platforms has increased in recent months, with an expansion in their range of offerings including home improvement products, electronics, beauty, and toys.

"Buying habits are also rapidly changing thanks to quick commerce. I was myself a bit sceptic about this model a few years ago but I've completely changed my mind. Now we at bigbasket are completely focusing on this," Menon said, adding that people don't pre-plan their purchases anymore.

"This business is here to stay. Companies, including Bigbasket, have proven that it is commercially viable, and businesses have scaled really fast. Going forward, you'll see significant investments in the sector," Menon said.

This comes as the grocer startup announced in February that it expects its quick commerce arm, the last of its three main businesses still in the red, to become profitable in six months.

BB Now, BigBasket’s quick-commerce division, leverages the same dark stores, or warehouses, and infrastructure it uses for its other two divisions to ensure orders are delivered in under 30 minutes.

Its other two verticals include its main grocery app, which provides slotted delivery, and its subscription-based grocery delivery app, BBDaily, which together contribute 60-70% of the revenue.

The five-player sector

Quick commerce, largely a five-player sector in India, has witnessed significant churn over the past year as companies wrestle with top-level exits, layoffs, and delayed payments amid a sustained liquidity crunch since the pandemic years.

BB Now’s competitors include Zepto, Zomato-backed Blinkit, Dunzo, and Swiggy Instamart. With funding drying out, these quick-commerce companies have been on a quest for profitability.

Maintaining a tight lid on costs is crucial for profitability in the hyper-competitive space, where most quick commerce companies such as Swiggy (Instamart) and Zomato (Blinkit) grapple with high cash-burn rates. Growth, in effect, comes on the back of significant losses.

BigBasket, which views its quick-commerce arm as a “marketing channel," is looking to become profitable by achieving two key metrics: revenue per dark store and average order value.

Also Read: The rise of quick commerce has left us with a bagful of questions

Over the past two years, BigBasket has opened about 350 dark stores, some of which are already profitable. With the remaining stores, the company aims to either resize, relocate or merge them to ensure they all have a minimum order value to become profitable. This would roughly translate to a growth of 50-60% over the next year, co-founder Vipul Parekh had said in February.

BigBasket was founded in 2011. Ten years later, Tata Digital Ltd, a unit of Tata Sons, acquired a majority stake in the company. But BigBasket continues to operate as an independent entity.

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