Hello friends! in today’s post “What is Big Basket Business Model? Does Big Bazaar online adopted it”; we will look into the business model of Big Basket. This post will help us to understand the business model of Big Bazaar online shopping as well. Big Basket daily and Har Din Fresh of Big Bazaar seems to be similar. The post will help to understand the Big Bazaar online Business Model. Shop.BigBazar.com is a new vertical of Future Retail Ltd.
Grocery Leader Big Basket Business Model In India.
The story starts in 1999 when there was a .com boom and this is one of the 1st e-commerce company who came to buy online. After 2 years they added grocery too; in starting a lot of people came online but, you know in starting people don’t buy online only COD can operate at that time and not online payment so, people came but did not buy from it. They analyse and they came to offline and in south india they got a huge success, they opened a fab mart and sell everything in it but, still it did not make much profit and in 2006 Birla group overtook it. And in 2011 they again return online under sell retail network. In 2011 only they got a funding for the first time.
Useful points for grocery store franchise in India
Do try to understand this,if you want to have a grocery business so; what all are the options? This may help you if you have any plan to take bigbasket franchise, franchise of Big Bazaar or Dmart. If you are interested even for the small grocery store franchise in india this point will help you to understand the concept.
1. Inventory model
In this model I will buy product directly from the company at a discount rate and I will be selling to my target audience and make profit.
2. Market place Model
Example of market place is like amazon, flipkart, and facebook market place. In this model here if I will get an order then I will transfer to other and they will deliver it, it will make profit by taking commision on sales.
3. Hybrid Model – Thats the actual Big Basket Business Model.
In this model I am doing the both 1st and 2nd, logically they did marketplace,they captured small-small grocery shop and made a pact with them and now the orders they get via there app and website,they do forward to these small grocery shops and deliver the product via a delivery boy. That’s how Jio Mart is also planning.
How Big Basket Managed its Business Model?
This was the simple process, slowly they got the fundings and they started to grow and then they shifted to inventory model. Because in this there is a lot of margin and you can too control your quality. They have 18000 listed products,more than 1000 brands and still it’s going under loss, but slowly and slowly their revenue is increasing, last year they did Rs 1176 crore revenue and had a loss of Rs 191 crore. They had a 1500Rs ticket size and 650Rs ticket size.
Fab Mart as business model
In our opinion fab mart too was a good business model. But in 1999’s internet used to be a new technology and people don’t trust internet and online payment during that era. No good speed,and no visual websites so; they took a good step by coming to offline market and made money and reinvested afterword.
From 2011 they are in loss.But in coming years they will be coming in profit because; it’s inventory model will keep on increasing with the advent of revenue their expenses will tend to decrease.
What is the customer model of Big Basket ?
The customer categorization is very simple. To manage the revenue and to increase the buying customer they do a simple strategy by ranking it’s customer.
- If you order today then you are not it’s customer.
- Suppose in 3 month you ordered 2-3 times,then you became a silver customer for them. Silver customer means that this is their potential customer.
- Their platinum customer comes 95% repetadely.
Big Basket Daily – An added feature
Fresh, Milk and vegetables by 7:00 Am. That’s what people want.
Big basket daily milk offer and subscription.
The basic item used in every household, and the consumption of milk is on daily basis. The stock turn is amazingly high. Big basket daily milk delivery before 7:00 Am, that’s again the USP of the company. We will share all the pros and cons of Big Basket daily and har din fresh of Big Bazaar in our next Post.
Delivery model adopted by Big Basket
Deliver of vegetables in 2 to 3 hours. In vegetables you need to deliver within 1 hours and not in 2 to 3 days so, this thing is possible due to delivery acquisition.
Big Basket Revenue Model: How Big Basket Makes profit?
In grocery they operate in 35% of profit margin and in other item 10-12% margin you may be finding it more but if you see their expenditure-website, app,delivery and many more things to run this makes there expenditure high. In order to be in profits they need to increase customer base, increase topline sales and reduce expenditures ( Including damages and all.).
If you want to start the online grocery business please note the below mentioned point.
In online retail if you want to do this type of business then target the cities because in cities there is a lot more awareness,less acquisition cost and you will be getting at a less rate ultimately will tend to sell in your products and will increase your potential customer.
Hope we provided you alot more information on this, in case any other query please write to us. The business model of Big Bazaar is directly based on inventory model as they have retail store across the country.