how grofers and bigbasket untapped their potential

On-demand Grocery Apps – How Grofers (is now Blinkit) and BigBasket Untapped Their Potential

how grofers and bigbasket untapped their potential

Online grocers are going all out to attract modern shoppers, and supporting them in this endeavor are new-age technologies. Companies using artificial intelligence, machine learning, and analytics to streamline strategies and improve customer experience is something that is out of the box for the Indian customers. 

Online grocery looks like an easy business of delivering vegetables and fruit, toiletries, and staples to homes, saving clients the inconvenience of going to a grocery store. However, it is complex to get the client what they require in time – the reason every e-tailer has developed its own business model and then competing with its competitors.

Times have changed and how! Gone are the days when visiting the vegetable market was an everyday thing. Now in the current situation of pandemic, it’s all about going as less as possible, giving a wide berth to anyone without a mask and ticking items off your list and coming home as soon as possible. Amidst this surreal situation, some brands have really gone all out to make life easier for us – Grofers is now Blinkit and BigBasket are two players which have, against all odds been making efforts to deliver groceries and continue business as usual at this time.

Big Basket and Grofers is now Blinkit have effectively used the unmatched customer service with a large variety of products using constant innovation using technology. When BigBasket and Blinkit started its operations, it adopted the ‘just-in-time model’ – wherein not only unpreserved goods but every item was brought against an order. In other words, they were purchased-to-order. The delivery boy directly picks up the item from the retailer, and directly delivers it to the customer. 

As the time passed and their business flourished, they proceeded to an ‘inventory model’ for most of their products, and they now buy products directly from suppliers like – HUL, P&G, farmers, mills, etc. and then stock these in their  warehouses. And for the revenue generation, they also add a small margin to the cost price of the product before vending them.

They also source many of its products locally as well as nationally. Some items like onions, oranges, apples, etc. are purchased nationally from their major producing locations; while, many other items are sourced locally from ‘mandis’ (markets) or local farmers. This depends on the product and its surrounding factors.  

BigBasket and Blinkit have been implementing a hyper-local strategy, wherein, it has joined hands with more than 1,800 neighborhood grocery stores across India to deliver goods within an hour. Looking for the current scenario – they now process almost 20,000 orders a day, with the involvement of 2000 team members.

Moving on, around the mid of 2015, BigBasket also roped in Bollywood superstar – ‘Shah Rukh Khan’ as their brand ambassador following which, they also launched a high volume television, digital and print media campaign as well.  

There was a time when Indians only bought their vegetables and fruits directly at the public market or through handcarts — this meant that customers often formed a bond with the sellers over time, which resulted in variable pricing for each customer depending on how close they are to the vendors. BigBasket and Blinkit standardised this experience and gave consistent pricing for all items in a given city.

When it comes to milk, eggs, bread and other such staples, daily deliveries are a norm in much of India. With the introduction of supermarkets, the convenience factor meant customers in cities gravitated to the wider selection of products. BigBasket and Blinkit figured this out quickly and added a lot more things than just fruits and vegetables to its platform. The convenience and familiarity of buying things online increased multifold with the introduction of technology, ecommerce and app-based shopping. In the major cities, consumers — with their ultra-busy lives and erratic schedules — have turned to grocery delivery en masse.

And finally as competition has increased, the company has managed to add private labels, bring local specialty shops to its platform to offer a more bespoke experience than any of its other competitors.

How they Fine-Tuned Its Business Model

For consumers, BigBasket and Blinkit is a delivery platform but as a business it is spread out into everything from procurement to supply chain and logistics as well as in consumer services through subscription-based delivery and also somewhat into the foodtech category thanks to some local shops selling specialty items.

The grocery giants have so far relied on an asset-light model, which means it does not own retail outlets and uses warehouses for fulfillment. It partners with third-party vendors, wholesalers and resellers, and also sells some goods under its private labels.

In recent months, the company has tried to add in more assets in the form of a more efficient delivery fleet system. BigBasket announced plans to turn towards e-mobility for its last-mile delivery operations across metros. 

The company said it has worked with multiple e-van OEMs like Gayam Motors and Euler Motors and certified them for their operations. It is now progressively introducing e-bikes from brands including Hero, Okinawa, Li-on, and Greaves Cotton in its operations for better mobility.

While private labels may be called a key differentiator in terms of inventory and allows BigBasket a lot of price flexibility, its primary focus is on the technology stack that powers the end-to-end operations from procurement, distribution, supply, delivery, payments and returns.

BigBasket has two sides to its operations, the first, a buying side for the farm produce, personal care products, and second, management of the stock in its warehouses in the cities where it has a presence.

The second focus of the company is on managing the supply of fresh and perishable goods such as meat, vegetables and fruits for which it ties up directly with the suppliers, grocery stores, dark stores (which only cater to online delivery services) for the inventory building.

In Tier 1 cities, BigBasket and Blinkit have an option of a 90-minute delivery, apart from their standard delivery-slot options. 

In this situation of the pandemic, consumers in smaller cities and towns as well have started ordering groceries and vegetables from Blinkit and Big Basket. The companies have taken utmost measures to ensure hygiene amidst such a terrible pandemic.From thermal screening of the delivery guys to contact less deliveries as well as payments, these companies have surely innovated when the deadly virus threw a quarantine. 

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