Speaking at the Prarambh Startup India International Summit on Saturday, Hari Menon shared that BigBasket’s future plans include aiming towards an IPO.
Although he did not mention the timeline of the same, he said, “We would want to go public. We would like to go public. There are exits needed, people hate to exit businesses, and the best form of doing that is through an IPO”.
He also said that while there is an ongoing debate on whether the companies would want to get listed in India or overseas, Big basket would aim to go for an IPO in India.
Bigbasket, an online grocery delivery service, was founded in 2011 in Bangalore and has come a long way since; it is the biggest online grocery player today.
In the wake of the Covid -19 pandemic, like all businesses, BigBasket too was majorly hit; as the lockdown came into full force, BigBasket reportedly lost 80% of its workforce in the very two days of the nationwide lockdown beginning March 2020.
However, the orders for home delivery did not stop. They doubled. It was a catch22 situation. With orders piling up but no workforce, the management went into overdrive and hired 12,300 people in 16 days.
In the latest, reportedly, Tata Digital is in the final stage of takeover talks with Bigbasket.
Tata Sons – the $113 billion Tata Group’s holding company, plans to buy a controlling stake in BigBasket.
The acquisition of BigBasket is a part of the ambitious e-commerce strategy of Tata Sons; Tata Sons is also looking to unveil a ‘super app’ that combines many services and products offered by its various businesses under a single umbrella, which includes food and grocery consumer durables, financial services, among others.
With the acquisition of BigBasket (Tata Digital is said to be in the final stages of the talks), it is set to give direct competition to Mukesh Ambani-led Reliance Retail’s JioMart, Walmart owned – Flipkart, and Amazon.
BigBasket has slowly but surely captured the minds of the public; it has a steady base of clientele and an increasing base of the same. It is close to a decade of business and has wholly busted the myth that e-commerce will not work for FMCG.
Starting out in a small office in Bangalore’s Domlur, it has a strong business model. Even during the Covid -19 pandemic, while it shut the business for a few days, it was one of the few businesses that continued despite the hardships and became a relief for many, particularly the aged.
It started with total funding of $220 million by SVP, Bessemer, and Helion Ventures; BigBasket operates in more than 25 cities. As per its strategy, it looked for further expansion to deeper penetration.
BigBasket enjoys the fruits during Covid -19
According to Menon, BigBasket’s business doubled compared to pre – covid levels. This is owed to the increased in the numbers of orders, which rose at an exponential level during the lockdown.
The firm struggled with the loss of workforce and was hit hard as many employees were unable to report during the lockdown; almost 80% of the workforce went kaput.
However, this did not stop BigBasket, and it quickly went into the hiring mode and hired close to 12300 people in 16 days.
The Trend of IPO’s
Many Indian Startups are aiming at IPO plans. This includes Zomato, Grofers, Delhivery, and many more; this is not a new idea; every successful startup at some point in time contemplates and aims at taking their companies public.
Recently, OYO Hotels & Homes, Ritesh Agarwal, founder, and CEO had also expressed that they were looking to take the company public and were aiming at an IPO; However, the timeline of the same was not mentioned; instead, he said that the decision to do the same was with the Board of Directors.
The Covid led deluge, while it engulfed many businesses, sectors like ed-tech, e- grocery, food delivery, and gaming, among others, came out as clear beneficiaries.
It also altered consumer behavior; thus, many people who usually subscribed to traditional services moved online.
According to Counterpoint Research, at the end of 2020, India had about 570 million active internet users against 480 million in 2019.
And with no end to the Covid -19 pandemic, even as travel and service sectors are limping back, it can only be said that more and more people will move to online channels.
Competition escalates within e-commerce giants.
While Reliance has been at the forefront to take advantage of the booming e-commerce, it announced in quick succession of its plans to strengthen its position in the e-commerce space with its Facebook – Reliance deal, and Reliance industries – Future Group deal; Reliance thus eyes a bigger play online.
The recently announced acquisitions are set to accelerate scaling up by competitors, as they too accelerate to consolidate their position and take advantage of the booming e-commerce space.
Reliance has also devised plans to make JioMart available on WhatsApp in the next six months.
Tata has recently announced its ambitious e-commerce strategy, which is already in talks with BigBasket to acquire the same. In addition to the acquisition plans, the company is also set to launch its ‘SuperApp’ that combines many of its products and services under one umbrella.
Tata Digital, which was set up last year, propels the company to an active player in the e-commerce space and scale up StarQuik, the online platform of Trent owned grocery chain Starbazaar.
StarQuik, also as per strategy, has set up ‘dark stores’ which are open to the public and only fulfill online orders.
As per reports, Tata Digital is now in the final stage to seal the deal with BigBasket. If the same happens, it will give direct and stiff competition to Reliance JioMart and others who are looking to take the pie of the booming e-commerce space.
E-commerce fast emerging top – job space
According to Linkedin’s Job on the rise report – Professionals and frontlines of e-commerce emerged as the fastest-growing job area.
It reportedly grew 73% YoY between April – October 2020, making the sector the highest yearly growth. There are currently 400,000 jobs open in this sector.