BigBasket parent has a $100-m plan to build tech & supply chain

Supermarket Grocery Supplies, which owns and runs Big-Basket, has closed $150 million in funding led by Mirae Asset-Naver Asia Growth Fund, Alibaba and UK government-owned CDC Group, cofounder Vipul Parekh confirmed to ET. The latest funding propels the online grocery platform’s valuation to over $1 billion.

The financing deal was first reported by ET in its February 8 edition.

The company has allocated $100 million in capital expenditure to build infrastructure, technology and supply chain, Parekh said.

BigBasket will operationally break even in six-eight months once it hits the $800-million revenue run rate, he said. The idea is to optimise supply chain, technology, reduce logistics costs and improve margins from its fresh and wholesale business.

Over the past 12 months, the company has launched new businesses including vending machines, and milk subscription and categories including beauty and fresh meats, which will both scale up this year.

“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,” he said, adding that about 70% of the company’s sales come from its flagship ecommerce portal BigBasket, and it also supplies to other businesses including hotels, restaurants as well as offline retail brands. “We will expand our reseller network this year,” Parekh said.

The fresh capital gives BigBasket, which competes with the likes of Amazon, Flipkart, Swiggy and Grofers, additional firepower to fight out top internet marketplaces that are aggressively pushing into the grocery retailing business. While Flipkart and Amazon have introduced grocery as a category and launched their own private labels, they have steered away from fresh foods. Grofers, which until last year was the closest rival to Big-Basket, also pivoted to focus on a private label-led business model, while Swiggy and Dunzo continue to pilot grocery as one of their business verticals by aggregating neighbourhood stores.

Grocery has been regarded as the next big category in ecommerce — but it is also one of the most complex ones to crack. This year, Big-Basket plans to invest in reengineering its supply chain, which includes setting up more distribution centres across cities to cut delivery times to the same day for 80% orders by July.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/grocery/bigbasket-parent-has-a-100-m-plan-to-build-tech-supply-chain/69194279