HyperPure: Zomato`s Foray into B2B Foodtech

ABSTRACT

The case is about the entry of India-based

foodtech unicorn Zomato into the business-to-
business (B2B) food ingredient ordering
platform through HyperPure. Zomato, which
was started in 2008, was looking at
transforming itself into a farm-to-fork food Buy Now
company, and it acquired Bengaluru (India)- To download this case click on the
based raw materials and procurement start-up button below, and select the case
from the list of available cases:
WOTU (We Organize The Unorganized) in
August 2018 with this in mind. WOTU was
rebranded as HyperPure and through it
OR
Zomato directly sourced products including
vegetables, fruits, poultry, groceries, meats,
dairy, and beverages from farmers, mills,
producers, and processors and supplied them
to restaurants. The case details the operations
of HyperPure and the challenges that Zomato
is likely to face in taking HyperPure ahead.

Issues:
 Understand the food supply value chain.

 Conduct SWOT analysis.

 Understand vertical integration in a food-tech company.

 Understand the reasons for a food delivery company

entering the ingredients supplying business.

 Explain how a company’s business-to-business (B2B)

approach can add value in the supply chain business.

Introduction
HyperPure, a business-to-business (B2B) food ingredient ordering platform,
was started by India-based online food order delivery unicorn Zomato in
 2018. Through HyperPure, Zomato was looking to transform itself into a food
supplying company, with complete control over the entire value chain.
HyperPure directly sourced products including vegetables, fruits, poultry,
groceries, meats, dairy products, and beverages from farmers, mills,
producers, and processors and supplied them to restaurants. It allotted the
HyperPure tag to restaurants that purchased products from Zomato to help
customers make an informed choice about the food ingredients being used in
the restaurants. To take this initiative further and be a part of the end-to-
end value chain, Zomato was also planning to collect the waste from the
restaurants and convert into compost, which would be supplied to the
farmers..

Keywords
HyperPure,Business-to-business market, Food supply value chain, End-to-end
value chain,HyperPure tag, Farm to fork company, Food procurement and
sourcing, Food delivery market

BigBasket`s Big Dreams

ABSTRACT

The case ‘BigBasket’s Big Dreams’ is about the

growth of the online grocery firm
BigBasket.com (BigBasket) and the customer
value proposition it offered along with its
business model which were the primary
factors for its success. The case starts off with
the funding of US$ 150 million received by
BigBasket under the series F round of funding. or
The growth of the startup in the online grocery
segment is discussed along with details of the
funding received right from the series A to the
series F rounds. BigBasket’s customer value or
proposition is discussed in detail. The business
PayPal (11 USD)
model of BigBasket was different from that of
other online players in that it offered a wide
range of items and a ‘no questions asked’
return policy. Using the latest technology to
provide better services, BigBasket created a
loyal base of customers. Its business model is
further discussed along with the competition
faced by it. The case ends with the future
outlook for the company and its fight for
supremacy in the face of stiff competition.

Issues
The case is structured to achieve the following teaching objectives:

 Analyze how Porter’s generic strategies framework can be

used to achieve competitive advantage.

 Understand the concept of customer value proposition in

relation to online ecommerce organizations.

 Evaluate the business model of online ecommerce firms.

 Understand the growth of startups, their funding, traction,

scale up, and competition.

INTRODUCTION

In March 2019, Indian grocery startup BigBasket announced that it had raised
US$ 150 million in its series F round of funding. With this latest round of
funding, BigBasket’s valuation crossed US$ one billion, which helped the
company enter the Unicorn League. The funding round was led by
Alibaba.com BigBasket’s largest shareholder, with an investment of US$ 50
million. (Refer to Exhibit I for key stakeholders in BigBasket). Other investors
included Mirae Asset with US$ 59.9 million and CDC Group PLC with US$ 40
million. Hari Menon (Menon), Co-Founder and CEO at BigBasket, commented,
“Mirae was looking to invest in ecommerce, and India is a space they wanted
to invest in. We were in the market to raise fresh funds when they started
looking at opportunities.” ..

THE ENTREPRENEURIAL SPIRIT

Supermarket Grocery Supplies Pvt. Ltd, the parent company of

BigBasket.com, was founded in December 2011 in Bengaluru, India, by
Menon, Parekh, VS Ramesh (Ramesh), Abhinay Choudhari (Choudhari), and
VS Sudhakar (Sudhakar). The five founders of BigBasket had earlier dabbled
in ecommerce in 1999, when they launched an online business called
fabmart.com. As part of the ecommerce entity, fabmart.com, an online
grocery business, was started in 2001 in Bengaluru. Finding that there was
less business on the online platform, the six founders set up a chain of
physical grocery supermarkets in South India under the name Fabmall.
Menon said,...
THE CUSTOMER VALUE PROPOSITION

As of 2017, BigBasket was one of the leading

online grocery stores in India. Its success was
based primarily on three factors: outstanding
customer service, wide range of products, and or
use of the latest technology to bring in new
services with unique features.

BigBasket provided exceptional customer

service to its customers; the customers were or
given same day delivery for products ordered
daily on their platform. With 99.3% on time PayPal (11 USD)
delivery and a 99.5% order fill rate, BigBasket
created a high degree of customer loyalty. Its
‘no questions asked’ return policy earned it
good feedback from consumers. ..

BUSINESS MODEL
BigBasket provided everything on its platform from fresh foods like
vegetables and fruits, milk and dairy products, foodgrains, cereals, and FMCG
products along with kitchen appliances. There was a mix of third-party brands
and in-house brands among the products with 36 percent of sales being
contributed by the in-house brands. Menon, said, “From a customer
standpoint, they (buyers) need range and a single place where they get as
much as they need.” ..

COMPETITION
The online retail market in India was huge with the revenues expected to
touch Rs 1.8 trillion by FY 2020. In the online retail market, the online grocery
market was expected to reach Rs 100 billion by FY 2020 with a CAGR of 65-
70%, which made it the fastest growing segment. The online grocery market
had many players vying for the top spot. As of 2018, BigBasket was leading
the online grocery delivery segment with a market share of 37-40% followed
by Grofers, Amazon..

THE ROAD AHEAD

With all its back-end processes in place, a robust team, and operations in 30
cities of India, BigBasket was concentrating on consolidation of its business
rather than expansion. The company was looking forward to increasing its
revenues and becoming a billion dollar (Rs 69.56 billion) entity by FY 2020.
(Refer to Exhibit VI for the Revenue Growth of BigBasket from 2013 to 2019).
Menon said, “We are present in 30 cities, we are not expanding anymore. Our
expansion is over. We are now going to consolidate and grow bigger in the
cities we are in. So, no expansion of cities, no expansion of channels.” ..