BigBasket is in the process of further consolidating its position as the leading online grocer and fresh foods supplier in India. The company is reported to have earmarked an amount of $100 million towards this for the current financial year. While most online retail ventures look to firm up their last-mile delivery infrastructure, BigBasket is giving priority to the backend, the supply chain setup. A bulk of this amount may be spent on creating more distribution centres throughout the country.
The attempt is to increase the number of distribution centres from 18 to 20 within the next couple of months. This is as far as the large distribution centres. There are also 80 smaller-sized points where the products are assembled and then sent out for deliveries. This figure is sought to be increased to 100. BigBasket is now present in 25 cities. Going ahead, it may expand its services to more cities. But the plans out of the $100 million spend will be limited to the existing markets only.
The objective, according to BigBasket, is to shrink the delivery time to just 2 hours from the time the customer orders through the app. The other larger objective is to rapidly scale up the number of orders handled in a day from the 90,000 to 100,000 now to a million per day. BigBasket believes the supply chain infrastructure is crucial to achieve these objectives. Hence these steps and the $100 million budget.
Apart from the distribution centres, the other major initiative is to set up automatic vending machines in strategic locations. These are unmanned stations and largely placed inside apartment complexes or large offices. The way this will work is the customers can place their orders on the app and collect the stuff from the vending machines. The concept of locating them inside protected areas is to avert vandalism.
The company already has 200 such vending counters operational in Bangalore and the current plan is to multiply this and reach around 2000 including in other cities in the coming weeks/months. BigBasket calls it BB Instant.
Supermarket Grocery Supplies, the parent company, had raised recently around $150 million. While the major investor in the startup, the Alibaba group of China had participated in that round, there were other investors too, like Mirae Asset-Naver Asia Growth Fund and the CDC Group. That round also witnessed BigBasket crossing a significant milestone of crossing a billion-dollar mark in terms of valuation, becoming a Unicorn.