BigBasket, the online grocery delivery platform, has entered a new vertical by targeting the speciality foods business, according to Economic Times. The company has been testing the market for this specific vertical by running a pilot program in Bengaluru for the past few months. BigBasket has plans to expand this service to other metros in the coming months with the aim to increase its revenues. The speciality foods segment could, potentially, offer around 20-25% profit margins when compared to the grocery delivery service.
Speaking to Times of India about the new venture, Vipul Parekh, co-founder of BigBasket, said, “Initial results have shown positive indications on market demand. We have tied up with over 1,000 stores initially in major cities to start the third vertical.” BigBasket currently operates under an inventory-based model where the products are shipped directly to the customers from warehouses. With several tie-ups with speciality stores, the company plans to introduce a market-place model which will deliver gourmet foods directly to the customers from the stores.
With major competition from other grocery delivery platforms such as Grofers and Amazon Now, BigBasket intends to target several verticals to grab a strong market share. The new venture into the speciality foods segment will augment the company’s revenues generated from the grocery delivery service, as well as its own brands, Fresho and BB Royal. The company has also tied-up with several local kirana stores to offer 1-hour delivery.
Emerging Market For Speciality Food
The speciality foods vertical, which includes ethnic and gourmet foods, is a highly profitable venture, potentially a Rs. 50,000 crore market. Although the revenue from this specific sector is significantly higher than other food-based verticals, currently the market is un-organised. Several companies have already targeted this sector to add another source of revenue stream to the company. Recently, Craftsvilla, an online portal which deals with ethnic wear and jewellery, acquired Place of Origin, a gourmet online food e-tailer, to enter into this specific vertical.
BigBasket currently operates in 25 cities and claims to serve around 40,000 orders per day. The company also received $150 million in funding recently from investors – International Finance Corporation, Sands Capital, Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital.