Big Basket Business Model and How it Works | DxMinds

Big Basket Business Model and How it Works

Gone are the days when people used to wait for traffic, stand in a queue, check the quality of vegetables are some of the reasons why people started utilizing mobile applications wanted to spend time. Then Big Basket was launched as the modern age solution to this problem in 2011. The big basket has brought a big revolution in the field of the grocery business. The big basket seems like an online supermarket that has changed the dwelling Indians shop for food items and grocery and it has become important to take a snapshot of the BigBasket business model.

BigBasket is one of India’s largest online grocery platforms which operates in 30 cities across the country. The company has successfully reached more than 100 million customers and processes more than one lakh orders every day. The company delivers more than 18,000 products right from cooking essentials such as oil, basmati rice, veggies to everyday laundry.

Changing the scenario of the Indian market

Earlier Indians used to get groceries from grocery shops at the public market. This meant that the daily customers used to create a bond, hence it resulted in variable pricing for each customer depending upon the selection of vendor, their weighing machine, and a lot more. The BigBasket has standardized this experience by offering consistent pricing for every item in a given city. Milk, eggs, bread, and other such staples are some of the daily deliveries which are offered by the Bigbasket Daily service.

With the introduction of supermarkets in the city, people found it convenient to get ease over the selection of products. Big Basket, one of the best online delivery service. understood this fact and added more things to its platform than just fruits and vegetables. In metropolitan cities, consumers with their ultra-modern life and erratic schedules want to get grocery delivery in their convenient way. The ultra-convenience and easy availability of good quality products simply by just clicking on an app has increased multifold with the utilization of technology in e-commerce portals.

In this competitive world, the company has managed to add fame to its name and brought local specialty shops to its platform to offer a more outstanding experience than any of its other competitors.

Big Basket Journey

Founded by V S Sudhakar, Hari Menon, Vipul Parekh, Abhinay Choudhari and V S Ramesh launched the BigBasket year of 2011. The founders tried to build their e-commerce portal called in 1999 to sell books, toys, and groceries online. But unfortunately, it failed due to some technical reasons.

The infrastructure required for the best online delivery service startup was non-existent since the Internet connection was via a dial-up connection. This slow dial-up connection took complete 50 seconds for a page to download, with no proper gateways that failed to succeed.

Before getting acquired by Aditya Birla Group, the company merged with a brick-and-mortar grocery chain. In the year of 2011, these founders again grouped to build an online grocery delivery portal. They found it challenging to convince proposals about the quality of products since they adhere to the quality available in the fruits and vegetables available in the pull carts and wholesale owner.

At this time of the year, the BigBasket business model hit the grounds with a blast. India was growing as one of the fastest mobile subscribers, and the favorable options were widespread internet, easy availability of internet at reasonable costs, payment infrastructure, and the increasing young generation. But still, the venture firms were not convinced but the founders persisted to create a pitch for their niche audience to make it more viable.

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    How BigBasket works and its challenges

    How BigBasket works and its challenges

    At the time of the launch of this readymade grocery order mobile app, no apps were launched. Hence the feature of geo-tapping of addresses by the delivery person was not possible. But at that time also, the on-time delivery was offered by it since it started. At the time of customer order, the client representative would call and note their exact location by following the Lat-Long technique. After fetching the location, the entry was made into the database, so that the delivery person can easily reach the customer’s location by using Google Maps.

    In the initial state of the company, they found delivering fresh food to be a challenging task. The country lacks the infrastructure to preserve food for a long time. This hurdle made the Bigbasket purchase perishable food items not directly from farmers. When the company was initially launched, the founders used to wake up early to get fresh vegetables and fruits to make both ends meet. Then gradually Bigbasket built its cooling infrastructures – such as refrigerators, cool warehouses, chill rooms, and a fleet of trucks which is used to enable the company to purchase the fresh products at competitive rates.

    In India, where there are diverse cultures and myriad food habits, the food delivery companies found it difficult to succeed to attain the Pan- India. Hence these best online delivery service companies were required to get adapted to local circumstances, for instance, they must share samples of localized communities like the fresh fishes in Kerala to Sona Masoori(rice) in Bengaluru.

    How many of you have touched the vegetables and then bought them? Yes, being an Indian we all have, we believe to touch and sense the freshness of the product. Big Basket resolved these issues by introducing a -questions asked return policy, which allowed customers to do the partial return if they were not satisfied with the quality of the ordered products. This move helped the Company to garner customer trust. The Company also promised to return around 50% of the price of the value of any item that was missing from their ordered list.

    Big Basket Supply Chain Model

    If a company needs to be a successful one, then it needs to maintain a great business model.

    The business model of Big Basket, the readymade grocery order mobile app is structured in a way that helps the company earn more profit. To help customers get the right value for money, the business model must always be taken care of. The Big Basket model utilizes varied revenue streams like Merchandise sales, Sponsored content, sales commission, and the cost of local retailers. Let’s have a glance over the different models for:

    Inventory -Led model

    Since the BigBasket Supply Chain model was launched in the year December 2011, there were not many stocks.

    Gradually BigBasket started following the inventory model for its products. In the inventory model, the company purchases products from renowned suppliers like P&G, HUL mills. The procurement centers are spread across different parts of the country m based upon its operations.

    Since the company purchases in bulk, it gets a higher discount on the cost price and offers a small amount to the customer too. In most cases, Fresh, Royal Organic, Happy Chef Gourmet helps the company gain a good amount of profits.

    The company gains profits by buying unbranded products and adds its labels and sells on its platform.BigBasket supply chain model maintains ten days’ worth of inventory, as compared to the industry average of a month. In this business model, a lower amount of stock allows the company to save money and contain losses. Big Basket wastes around 5% of its perishables which is a global benchmark. However, the company attributes these two elements to help you bring down the cost by 3%.

    Hyperlocal delivery

    What are the basic requirements for a successful online business? Quality products, same-day delivery, high-fill rates, on-time delivery, easy payment ways.

    BigBasket business model fulfills the option of same-day delivery. While the company used to charge 30 rupees per delivery, which was a successful move and helped the company to achieve higher fill rates and reached 18%.

    Big Basket has successfully tied with around 1800 neighborhood grocery stores across India so that to deliver goods within an hour. This model allowed to make a big amount of reduction in wastage and decreasing inventory prices.

    BigBasket business model used to include the standard delivery options like in 90 minute delivery in the Tier-I cities. Later on, the company merged these two delivery options to fulfill these two requirements in 4 hours to counter the rising completion.

    To avail of the four-hour delivery option, the company impoverished its warehouses to accommodate the good quality food as compared to the last ones. Earlier these product options were not available in the 90-minute deli8very option.

    World Class Customer service

    “Customer is always the king”. When you own a business, we must always adhere to customer satisfaction. For instance, when BigBasket started listening to customers, they started to improvise their services.

    Right from the quality of food to the delivery boy’s hygiene, the BigBasket supply model chain always takes care in listening to their issues and resolving them as soon as possible. Moreover, it offers lucrative options, on-time delivery, and best hygiene conditions, which helps customers.

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      The Utilization of Technology and artificial intelligence

      The Company’s technology stack is something that helps to make a difference and helps in making end-to-end operations from procurement, distribution, supply, delivery, returns, and payments.

      BigBasket supply chain model credits its proprietary guidance to help the company achieve the on-time delivery targets. If the company is not able to make it, then the customer can charge a 10% discount.

      The Company deploys highly proficient artificial intelligence and machine learning models which forecast the demands of consumers within the city. The predictive models built by a team can easily identify any changes in the customer’s buying pattern and help make the deliveries at the right address irrespective of the location.

      Location is one of the most important aspects of the BigBasket supply chain model. The company ensures that the marking of the place and gaining insights about the delivery. It also seeks the optimum route mapping so that the trucks also travel the least distance to make the deliveries as possible. Big Basket supply chain always tries to gain many profits by clustering as many delivery locations into one.

      After delivery is done, BigBasket always makes sure that it calls the consumer to get a confirmation about the details. The company has also introduced a personalized shopping basket called Smart Basket for customers at regular intervals based on AI. It enables the customer to spend less time ordering the products. Hence in this way, the customers can find time to get time to check up on new products and increase the order value.

      Successful business model strength

      For a business to be successful, it must follow some tactics like the successful business model strength:

      • Great UI/UX- A mobile application can be successful only if has a great user interface. Since the people must find it easy to utilize it to order the products in a hassle-free manner. The right filter, search option must be offered to help the customer search for the particular brand they are looking for.
      • Customer’s money is valued- BigBasket always values customer’s hard-earned money. Since grocery products are the essentials for a person, the company strives hard to offer them the first quality products at the right costs.
      • The BigBasket supply chain model gives exciting offers, rewards on some special occasions to help customers get some quality products. To attract more customers we Provide great offers, which offers a great shopping experience to them.
      • Great customer service – To make a successful delivery business, wonderful customer service makes a big difference. The customer’s feedback, reviews, experiences, their testimonials help them improve their services.

      The technology

      Big Basket offers the best online delivery service delivers more than 10,000 orders every day. Big Basket webs servers are hosted by Nginx. The Company’s hosting is provided by AWS, while in the initial days, it was hosted on Linode. In the year of 2011, the complete website was built on Python. The company also used Node Js and Angular Js. For cache, Bigbasket worked with Memcached and then gradually moved to Aerospike.

      How much does it cost to build a big basket business model

      If you are having in plan to develop an app like Big Basket business model,  then the cost to develop an app like Big Basket for iOS and Android based upon the following advanced features:

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        How much does it cost to build a big basket business model

        App design

        • Simple
        • Medium
        • Rich

        Basic Features

        • Newsfeed/activity feed
        • Rating/review
        • User profile
        • Bar code/ QR code
        • Shopping cart
        • Order history
        • Offers and promo codes
        • Help

        App Interaction

        • Universal Linking
        • Social sharing
        • Messaging / chat

        Advanced Features

        1. Geolocation
        2. Data sync
        3. Booking calendar
        4. In-app camera
        5. Push notification

        Access Control

        • Using email id
        • Using social media
        • Using OTP

        External Features

        1. OTP reading
        2. In-app calling or messaging
        3. Secure data travel
        4. Connect to third-party API

        The Conclusion

        BigBasket supply chain model is one of the successful online delivery service providers. This business model explained above helps you to build a successful business in the future. These tactics help you develop an online delivery service app right from the scratch till complete deployment.

        Are you in search of a company that helps you to create an online delivery app like BigBasket? Then get in contact with DxMinds the leading mobile app development company in Bangalore for all kinds of online delivery services. Their expert team of professionals leverages online delivery solutions. The company offers a customized mobile app according to their requirements with all the advanced features. Get a free quote.

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