Good morning [%first_name |Dear Reader%],

One of our recent Trade Tricks editions was about why I prefer my kirana to BigBasket. I received a bunch of feedback for that piece, and one of our subscribers pointed out, rightly, that I hadn’t spoken of the discounts offered by online grocers, and how that’s a big reason to shop online instead of at neighbourhood mom-and-pop stores.

I don’t look at discounts, at least not while buying groceries. But I’m in the minority, going by how BigBasket and its peers position themselves.

But the Tata Group-owned company’s current pitch as a value e-tailer is a far cry from how it wanted to be perceived earlier. And it illustrates the difficulties of being any other kind of e-grocer, even for quick commerce players like Instamart.

Instamart, BigBasket show why e-grocers have to default to discounts

This weekend, an advertisement from BigBasket got me thinking.

The tagline here is the Tamil equivalent of “Har din sasta”, which translates to “Deals every day”.

This is certainly nothing new, and has consistently been its messaging since at least September 2020. So it’s not like BigBasket hadn’t talked up discounts earlier.

But discounts weren’t the only thing it wanted to push.

Source: Behavioural Economics and the Badshah of Bollywood, Medium

“Freshness” and “best quality” are the operative words in this advertisement from four years ago.

“Earlier, our promotions were about how we had the widest range and the freshest products,” a former BigBasket executive told The Ken sometime last year. “Now, it’s about price. You can’t take a company from US$1 billion (in GMV) to US$10 billion on the back of premium customers.”

Another reason for BigBasket’s change of heart was the pandemic. Or, more specifically, the launch of Reliance Industries-owned JioMart in the early days of Covid. Given Reliance’s penchant for price-led disruption—its telco, Jio Infocomm, is a great example—JioMart wasn’t going to waste any time showing what great value it provided.

Source: Advert Gallery

In less than a year of its launch, JioMart had notched up a 4% market share in online grocery—helped both by its aggressive pricing and by its presence in over 200 cities and towns. BigBasket’s market share in the year ended March 2021 was 37%. It’s only fair to assume that JioMart’s share of the pie has inched up since then.

There are parallels in the offline world for how JioMart and BigBasket are approaching ‘value e-tailing’. Like Future Retail’s Big Bazaar chain of supermarkets, JioMart is doubling down on periodic sales with heavy discounts.