In midst of stiff competition from International brands such as Walmart and Amazon in the online grocery delivery sector, BigBasket has plans to grow its own network of farmers by investing nearly Rs. 90 crore. The online grocery delivery platform will expand its network of farmers who supply fruits and vegetables to the company. Bigbasket sources nearly 60 percent of fresh fruits and vegetables through the launch of its own program, Farmer Connect.
Investing In An Emerging Sector
According to Economic Times, Bigbasket has already invested nearly Rs. 80 crore in building the supply chain for the initiative. Fruits and vegetables account for nearly 20 percent of Bigbasket’s revenue with the business growing 10 percent each month, according to Hari Menon, Chief Executive of Bigbasket. “Forging tie-ups with (fast-moving consumer goods) companies may be an easier task but repeat and loyal customers are won by keeping the quality and stock of fresh products including fruits and vegetables consistent,” added Menon.
Sourcing From Farmers
Fresh fruits and vegetables are sourced from the farmers through Bigbasket’s 21 collection centres present across the country. Earlier this month, Bigbasket noted that around 60 “percent of all fruits and vegetables are sourced directly from the farmers with the number expected to increase to 80 percent this year, according to Menon. “The farmers bring their produce to the CC, where the produce is sorted and graded and the payment for the same is processed immediately and credited to their bank accounts within 48 hours,” added Menon.
Potential To Grow
The grocery delivery sector in India has the potential to create a significant amount of revenue for companies due to an increasing number of working professionals in the metros with disposable income. A report released by Morgan Stanley stated that ” online penetration (to purchase grocery) to increase to 2.9% in 2020, partly led by large general merchandise players also entering this category.” Earlier this year, Amazon launched its own grocery delivery service, Amazon Now, in Bengaluru in competition with Indian startups such as Bigbasket and Grofers.