Experiences And Learnings From Mrs. Meera Iyer, Head of Marketing, Bigbasket – VGSOM, IIT Kharagpur
Mrs Meera Iyer, Head of Marketing, bigbasket.com shared her experiences and business learning’s with the MBA students at VGSOM, IIT Kharagpur. She conveyed some interesting statistics about the rise of e-grocery in India which showed that the market is poised to grow. The projections indicate that by 2020, 25% of organised retail will go online. The prospective market for online grocery retail sales is said to be $20 billion in size. Bigbasket, which is already in the top five grocers today, aims to become India’s largest online grocery seller by 2020.
Elaborating on the challenges faced by the e-grocery business, she explained that the grocery business was one of low margin & hence the rotation of inventory matters most. This means that low margins fetch high incomes when inventories are rotated multiple times over a certain period. The other challenges include market penetration, last mile logistics, internet connectivity issues, and ensuring seamless payment mechanisms. One of the most pressing challenges faced by the HR department of bigbasket has been recruiting and retaining the large 11000+ blue collar workforce that comprises pickers, packers, delivery boys, drivers and more.
Bigbasket has been able to face these challenges and display an exceptional 3X growth year on year since it was started in December, 2011. It takes pride in the fact that it has excellent customer facing metrics of 99% on time delivery & 98.3% fill rate which is the best in the world. In a recent compilation of reports across e-tailers, it was found that the loyalty and retention of bigbasket were found to be the highest in the world.
Mrs. Iyer delved into unit economics (economics of a single delivery) which is critical for a path towards profitability. Unit economics at bigbasket is a function of margin, cost and average ticket size. Bigbasket diligently manages delivery charges to ensure that customers are encouraged to place an order of at least Rs 1000. This has led to the average ticket size at bigbasket being around 1200-1300.
Speaking of social change that bigbasket has brought about, Mrs Meera Iyer had significant news to share. In the wake of demonetization, the number of farmers who had registered with bigbasket rose from 3000 to 5000. This is because in early 2016, bigbasket opened Jan Dhan Accounts for each one of their registered farmers & enabled smooth automated online payments directly to their bank accounts within 24 hours of receiving the farmer’s produce. The organisation takes pride in helping the small and marginal farmers of our country.
Concluding her discourse on the progress of bigbasket in the online grocery business, she emphasised the importance of having a maniacal focus on customer experience and building a brand that is liked, respected and adored. Although there is a rise in digitisation and urbanisation in India today, the act of buying groceries remains traditional. Buying groceries is a low-involvement, high-risk category with no rewards. The biggest challenge will always be how to get people to buy stuff online by busting the barriers to shopping online.