Poor BigBasket. India’s largest online grocer thought it had conclusively won the country’s bruising “grocery wars”. Out of the dozens of online grocers that popped up between 2013 and 2015, it was one of the handful that survived.

It did this by staying focused and disciplined. By keeping costs low. By delivering groceries 6-12 hours later, often even 24 hours later. By building a wide assortment of SKUs (stock keeping units), the largest in the business. By focusing on large order baskets.

All the things that helped it survive the bloodbath in the space, one that ended with the drying up of capital as investors realised, there were just no easy profits to be made.

The proof of its survival pudding came in February this year, when it raised $300 million in funding from the Alibaba Group. The size of the round was meant to send a deterring signal to all existing and potential competitors: back off, we’re the 800-pound gorillas here.

But the grocery game had already shifted, at least from a venture funding point of view. Instead of competing with BigBasket on its own terms―breadth of assortment, low prices and sustainable unit economics―a bunch of plucky and nimble startups changed the game. By making themselves so narrow and fast that BigBasket, with its 800-pound heft, couldn’t react to fast enough.

They came fast, each slashing away at BigBasket’s lucrative segments of, well, basket.  They were “micro-delivery” startups―each catering to the daily needs of customers, instead of planned weekly or monthly ones. For example, meats, milk, eggs; small baskets of grocery replenishments.

But if you can’t beat ‘em, join ‘em. Or better yet, buy ‘em.

This is the latest arrow in BigBasket’s quiver, BBdaily—a retail subscription model through which it hopes to replace your milkman.

The 7-year-old business entered the space with three back-to-back acquisitions in October. First up was RainCan, which offered a grocery subscription service in Mumbai and Pune. BigBasket then went on to acquire MorningCart, which provided a similar service in Bengaluru. Last on BigBasket’s shopping list was Bengaluru-based startup KWIK24, which specialises in vending machines for daily supplies.  

These acquisitions represent a marked departure from the company’s usual ethos. Industry experts say this was never BigBasket’s way of doing things. It has always relied on a trial-and-error strategy: pivoting from store aggregation to an inventory model. In the past, it has preferred to create its own labels for mass-demand products like rice, pulses, and meat. However, it chose to go the acquisition route for its planned subscription milk delivery play. There is a palpable sense of urgency on display, meaning that BigBasket sees micro-delivery as a crucial part of its business going forward.


Salman SH

Salman has around four years of experience reporting primarily on consumer internet, startups, and the telecom sector. Previously, he worked with the financial newspaper Mint, reporting on startups and consumer internet trends. Prior to this, he worked with MediaNama and NextBigWhat. At The Ken, Salman will look at startups, technology trends, and the government policies shaping up around them. Loud metal, moshpits, and local gigs are he what he lives for.

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