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  • Bigbasket

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    Sarthak Harnathka
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    BigBasket.com is an online grocery retailer that directly procures products from over 150 suppliers and farmers to stock in its 80,000 square foot warehouses. It uses a hub-spoke model for on-time delivery to customers and has its own delivery fleets. Marketing is primarily through word of mouth and promotions. BigBasket aims to provide high quality products at competitive prices. While costs of goods sold are around 75% of revenue, lower operating costs compared to traditional retailers allow BigBasket to achieve net margins of around 5%.

    Original Description:

    Big Basket Retail Chain Case

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    bigbasket

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    BigBasket.com is an online grocery retailer that directly procures products from over 150 suppliers and farmers to stock in its 80,000 square foot warehouses. It uses a hub-spoke model for on-time delivery to customers and has its own delivery fleets. Marketing is primarily through word of mouth and promotions. BigBasket aims to provide high quality products at competitive prices. While costs of goods sold are around 75% of revenue, lower operating costs compared to traditional retailers allow BigBasket to achieve net margins of around 5%.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    360 views3 pages

    Bigbasket

    Uploaded by

    Sarthak Harnathka
    BigBasket.com is an online grocery retailer that directly procures products from over 150 suppliers and farmers to stock in its 80,000 square foot warehouses. It uses a hub-spoke model for on-time delivery to customers and has its own delivery fleets. Marketing is primarily through word of mouth and promotions. BigBasket aims to provide high quality products at competitive prices. While costs of goods sold are around 75% of revenue, lower operating costs compared to traditional retailers allow BigBasket to achieve net margins of around 5%.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 3

    BIGBASKET.

    COM
    Submitted by: Group 6

    Amandeep Singh Kalsi B19123


    Mohit Marhatta B19148
    Sarthak Harnathka B19163
    Sayan Sen B19164
    Simran Kathuria B19171
    BIGBASKET.COM

    Value Chain – Primary Activities

    Inbound Logistics Operations Outbound Logistics Marketing & Sales Services


    • Directly procured from • 80,000 ft warehouses applying • Hub-Spoke model for on-time • City specific model for • High focus on customer
    150 suppliers the warehouse stocking model delivery marketing satisfaction
    • Were planning on • Warehouses had 10,000 SKUs • Automated route planning • BTL activities in malls, • 24*7 operations and
    bypassing them for mandis and upto 1000 brands software used posters, radio, and print ads option for free delivery
    • ‘Farm-to-home’ for fruits • Pickers and packers employed to • Owned fleets of vans and had • Main form of marketing was above a price
    and vegetables send deliveries out total control over logistics Word of Mouth • User friendly website and
    • Orders went from warehouses to • Price promotions and repeat purchase options
    hubs and then out for delivery discounts were heavily used • Complete detailing about
    policies and products

    Value Chain – Secondary Activities

    Firm Infrastructure Human Resources Technology Procurement


    • Founded by 5 individuals • Initially employment was • Used consumer information • Fruits and vegetables procured
    experienced in online marketing for logistics management to maintain zero inventory on order as they were
    • Tight control held over own • After reaching a certain • Software algorithms to perishable
    warehouse and delivery level, warehouses were indicate when orders began • Warehouses initially procured
    operations bought, and personnel overshooting inventory from wholesalers but then
    • Financial strategy was to provide were hired to work in them • AssetTrackr system used to moved directly to companies
    best quality at competitive as pickers and packers create virtual maps and • Perishables were directly
    prices delivery time indicators procured from farmers
    BIGBASKET.COM

    Margin and costs as a percentage of its revenue

    − ≈ − ≈
    Revenue – Rs 100 COGS ~ 75% Gross Margin ~ 25% Operating Costs~20% Net Margin ~ 5%

    COGS and Gross Margins Operating Costs and Net Margins

    Traditional • Gross Margin of Big Basket higher when • Online retailing and Big Basket in
    compared to traditional retailing particular have higher Net Margins
    Retailing • Lower COGS for Big Basket especially in (~5%) vs Traditional Retailing ( 1%-2%)
    fruits and vegetables segment due to • Big Basket saves in costs like rent,
    direct procurement from farmers utilities and staff which don’t exist at the
    VS • Direct Procurement in grocery segment last mile delivery for them
    from suppliers also ensured higher • Customer acquisition costs are much
    margins lower for Big basket as they mainly rely
    Big Basket • Big Basket sold Vegetables, fruits along on Word of Mouth marketing
    (Online with stables and rice under their own • The above savings in costs offsets the
    brand which significantly increased the higher transportation and distribution
    Retailing) gross margins costs due to door to door delivery

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