The e-commerce companies in India continue to grow with Supermarket Grocery Supplies-owned BigBasket becoming the latest entrant in the Unicorn startup, thanks to $150 million in the latest round of funding. Mirae Asset-Naver Asia Growth Fund, Alibaba and UK government-owned CDC Group led the latest round of funding which has propelled the valuation of the company to more than $ 1 billion.
It is to be noted that the major e-commerce companies are yet to make inroads in India's online grocery shopping market. As per a report in Business Standard, only four per cent of the country's grocery spending's happened online which is on a lower side in comparison to other retail categories. The e-commerce penetration in footwear and apparels category remains around 25 per cent but the online orders for mobile phones and books remaining as high as 50 per cent. Numbers clearly show that the online grocery segment still remains behind as against its peers. It is because of this primary reason why the investors are injecting huge money in India's online grocery market.
BigBasket's co-founder Vipul Parekh said that the company has allotted $100 million in capital expenditure to build infrastructure, technology and supply chain. He also added that the company will operationally break-even in coming six-eight months. The emphasis will be given on areas like supply chain and technology to reduce cost and improve margin.
Vipul Parekh said, "Grocery is a business of scale, and our defensibility lies in our farm-to-fork supply chain of fresh fruits, vegetables, meats, and inventory-led wholesale approach, which helps us with high order fill rates." The company wants to integrate its online offering with its offline channel. In recent times, the company's offline strategy is focussed on supplementing its current delivery infrastructure by opening smaller distribution centres and complementing them with vending machines for impulse purchases. BigBasket will be opening 60-70 new distribution centres in the coming three months.
The fresh funding will give BigBasket additional teeth to compete against giants like Amazon, Flipkart, Swiggy and Grofers which are investing heavily to get a share of the pie of the grocery retailing business. As per the regulatory filing by, the company's revenue went up 35 per cent to Rs 1,605 crore while it managed to cut down its losses by 60 per cent to Rs 272 crore.
