Bigbasket Challenges

Challenges of Bigbasket in T2 cities

1. Challenges in Tier II cities
Group 5
Harshit Khokhawat(21125031)
SayanBhowmick(21125067)
Akhil Singh (21125006)
ApekshaAgrawal (200176)

2. About
•One of the largest online grocery store
•Founded in 2011
•Operates in more than 70 cities
•Joined unicorn club in 2019
•Headquarter in Bangalore
•Offers more than 20000 products and 1000 brands
•Prominent investors are Alibaba, Ascent Capital, PatymMall,
ZodiusCapital
•Customer base over 10 million
•Customer segment are students, working people and old
people
•Tata Digital Limited acquired BigBasket in May 2021

3. Business/Revenue Model of Big Basket
•Hybrid model (Inventory led + Hyperlocal)
•70% revenue generated from mobile app/website
•Remaining comes from other business including hotel, restaurants
•Several delivery types-Slotted delivery, Express delivery
•Revenue Model:
Mark up based
Production based
Subscription based-BB Star, BB Specialty

4. Marketing mix for BigBasket
ProductVegetables, fruits, food grains, household
supplies like oil, spices, packaged snacks, beverages etc.
PlaceMobile app, website, outlets in prominent cities
PriceMark up pricing, Nominal Delivery charges,
Discount over larger order
PromotionShahrukh Khan as brand ambassador,
Cashback on wallet payment, Online and offline
marketing campaign
PeopleQuality People from Top level to Bottom
ProcessInventory model for smoother delivery process
following Just In Time
Physical Evidence Proper Packaging, presentable, Good
Quality Product, customer care service

5. Competitor Analysis
BigBasket Grofers FreshtoHome Amazon Fresh Reliance Retail
Logo
Founding year 2011 2013 2015 2019 2014
Locations 70+ 15+ 10+ 110+ 200+
Revenue 3800 Cr 2200 Cr 600 Cr - 162000 Cr
Customer base 10M+ 1M+ 0.5M+ - 100M+
Products
categories
Grocery, stables,
household products,
personal care
Grocery, stables,
household products,
personal care
Fish, seafood, poultry,
mutton, steaks
Electronics, fashion,
grocery, personal care,
household products
Electronics, fashion,
grocery, personal care,
household products
Value
proposition
Providing wide variety
of grocery products at
reasonable rate on-
time
Providing grocery at
cheaper prices and on-
time deliveries
Providing hyper fresh
meat, fish, poultry,
fruits and vegetables
without any chemical
Providing quality
grocery products and
quick delivery
Providing quality
grocery products and
quick delivery

6. Customer Value Proposition
FUNCTIONAL VALUE
DOORSTEP DELIVERY
WITH TIMELY
EMOTIONAL VALUE
NETWORK EFFECT
ECONOMIC VALUE
SAVE TIME AND
ENERGY
SYMBOLIC VALUE
STATUS WITH BRAND
END VALUE
ENHANCED OVERALL
EXPERIENCE

7. Market Research
Motive
•Consumer behavior
•Market Segmentation
Survey Details
•Type-questionnaire
•Response-87
•Response from tier 2 resident-37

8. Observations/Analysis
Challenges
•Almost 1/3rd uncaptured market
•High Competition
•Entry barrier low-New Competitors
Solutions
•Target fast growing tier 2 cities like
Udaipur, Ajmer etc.
•USP to be a step ahead of competition
•Acquire new startups
68%
32%
Online Grocery Service Availability
YesNo
BigBasketFreshtohomeGrofers Others
Series1 17 5 12 14
0
5
10
15
20
Presence in tier 2 cities

9. Observations/Analysis
Challenges
•Customer retention low
•Conversion rate low
Solutions
•Analyze customer segment visiting
mobile app/website
•Use AI/ML for suggestion
•Attractive offers/scheme such as buy
now pay later, wallet payment
Not available Rarely Frequently Very frequently
Series1 12 14 8 3
0
2
4
6
8
10
12
14
16
Buying Frequency

10. AnalyseCustomer Segment
With the increase of Income, the customer are
preferring more to buy online
Reason
•Service offered by Big Basket gives a social status
•Even Customers feel superior by ordering milk
every day from Big Basket
•Education, working people, time limitation
Income Wise
Purchase Power
Buy grocery
online
Not buy grocery
online
%age
1-5 LPA 8 6 57%
5-10 LPA 17 11 61%
10-15 LPA 11 6 65%
More than 15 LPA 10 5 67%

11. AnalyseCustomer Segment
Segmentation based on marital status
•Based on the response, buying frequency of
Married people are higher
•Also, interval between orders for married person
is lower w.r.t.unmarried
Marital Status Wise
Purchase Pattern
Buying
Frequency
Interval
between orders
Married 0.61 29.9
Unmarried 0.51 37.9
Scale
Rarely 0 Daily 1
Frequently 1 Weekly 7
Very Frequently2 Monthly 30
Based on requirement 60

12. Observations/Analysis
Challenges
•Prefer free/minimal delivery charges
•Delivery time
•Entry barrier low-New Competitors
Solutions
•Prefer hyperlocal model over inventory
model
•SKUs in tier 2 cities
0 5 10 15 20
Free Delivery
0-100
100-200
More than 200
Free Delivery 0-100 100-200 More than 200
Series1 17 19 0 1
Tier 2 -Delivery Charges (Rs.)
7
10
16
4
Tier 2 -Delivery time expectation
Within 6Hrs
Within 12Hr
Within 24Hr
Within A Week

13. Observations/Analysis
0 5 10 15 20 25 30 35
Price
Delivery Time
Freshness/Quality
Customer Service
Good Quality
Price Delivery TimeFreshness/QualityCustomer ServiceGood Quality
Series1 31 29 28 16 27
Tier 2 –Expectation from online grocery service
Convenient Loyalty programGood Quality
Wider range
products
Cheaper
Series1 37 12 20 13 15
0
5
10
15
20
25
30
35
40
Tier 2 –Reason to buy from place customers buy
currently

14. Other Challenges
Gen X Trust
issues
Catering in
urgency
Internet
Connectivity
Awareness
Low entry
barrier

15. Solutions
BigBasket Thela
-Bulk order from hawker
-Attract Gen X
-Reach customer having internet connectivity
issue
Hyperlocal delivery
-Collaboration with local vendor
-Cater urgent order

16. Marketing Strategy in Tier 2
•TV
•Newspaper/Press
•Billboards
•Posters
ATL
•Social Media
•Events in School/Colleges
•Merchandising such as distribution of cups/T-
shirtsTTL
•Email Marketing such as newsletter
subscriptionBTL

17. Reference
https://en.wikipedia.org/wiki/Main_Page
https://www.bigbasket.com/
https://retail.economictimes.indiatimes.com/
https://techcrunch.com/2021/10/31/indias-zepto-a-10-minute-grocery-
delivery-app-founded-by-two-19-year-old-stanford-dropouts-raises-60-
million/
https://www.mbaskool.com/marketing-mix/services/17382-big-
basket.html
Interaction with BigBasket employee
Thank
You