Summary
- Pivoting to Quick Commerce: BigBasket is restructuring its focus towards quick commerce and striving to achieve sales of $1.5 billion by FY25. Integration of BBdaily into the main app is also on the cards for the subscription service to ensure seamless operations.
- Revenue Growth and Cost Control: The company witnessed its revenue surge 6 per cent, crossing Rs 10,000 crore in FY24 while shaving off over 20 per cent of its losses and cutting employee, advertisement, and recruitment costs.
- Competitive Positioning: BigBasket is thus well-placed to take on Blinkit, Swiggy Instamart, and Zepto-all of which have been promising deliveries within 10-15 minutes of ordering-as it gears up to double down on the fast-expanding quick commerce market.
BigBasket’s Strategy Shifts Towards Quick Commerce
Tata Digital-owned BigBasket has undertaken its most significant restructuring, shifting toward fast-growing quick commerce and setting an ambitious target of $1.5 billion in total sales for FY25. It is now focusing on grocery delivery within 10-15 minutes with aggression to take on Blinkit, Swiggy Instamart, Zepto, and Flipkart Minutes. The strategic shift comes after BigBasket crossed Rs 10,000 crore revenue in FY24.
Steady Revenue Growth, Reduced Losses
Concurring with the solidified monetary explanations, BigBasket detailed a 6.27% increment in income at Rs 10,061.9 crore for FY24 as compared with Rs 9,468.5 crore for FY23. The losses of the company have fallen by over 20%. Grocery sales contributed the largest share of operating revenue-97% -to BigBasket, while the remaining 3% came from ancillary services and other activities. Further, the company earned Rs 37.89 crore from interest and financial assets, taking the total revenue to Rs 10,099.8 crore.
Consolidation of Services
BigBasket will consolidate its subscription service, BBdaily, into the main application as part of its quick commerce strategy. This consolidation would mean further smoothening of operations and give strength to its leading position in quick commerce. This positions the company for growing ultra-fast delivery demand. It gives BigBasket an edge over its competition.
Breaking Down Expenses and Cost Control
Cost of goods sold was 71.3% of overall expenses for BigBasket in FY24, growing 3.4% to Rs 8,209.6 crore. In comparison, employee benefit expenses were sharply lower, 11.7% down to Rs 936.6 crore. This includes Rs 98.5 crore as ESOP expenses. Training and recruitment expenditure plunged 70% YoY to Rs 2.1 crore. Advertisements expenditure declined 14.2% to Rs 329.9 crore from Rs 384.7 crore in FY23 while transportation cost jumped to Rs 738.9 crore reflecting the scale of operation.
Performance of Innovative Retail Concepts
Consequently, Innovative Retail Concepts, the B2C arm of BigBasket, narrowed its net loss by 17 percent from INR 1,535.2 crore in FY23 to INR 1,267.2 crore in FY24, largely on controlled expenses. Operating revenue for the B2C business was up 6 percent at INR 7,884.5 crore, with sales from groceries and household products improving.
New Revenue Streams
BigBasket diversified its revenue streams in FY24. It made Rs 9.1 crore from newer streams such as commission income and technology services, with the latter fetched from Tata Group’s Infiniti Retail. Advertising revenue grew at a mere 0.5% to Rs 230.7 crore. The rental income more than doubled to Rs 11 crore. Amidst growth in new areas, the company’s income from scrap sales fell 5.5% to Rs 18.1 crore.
Quick Commerce Market and Competitive Landscape
BigBasket’s foray into quick commerce is at a time when other players such as Blinkit, Swiggy Instamart, and Zepto are aggressively pursuing the segment. Blinkit has clocked Rs 2,301 crore in net income in FY24, whereas Swiggy Instamart accomplished incomes of Rs 1,100 crore. Zepto has claimed to have crossed Rs 10,000 crore in revenues during this period, though audited numbers are yet to be filed.
Look Ahead: Expansion and Growth
With BigBasket continuing to double down on quick commerce, it readies for more expansion and market consolidation. The fast delivery of services, operationally aligned, places the firm in a decent situation to lead growth in the booming quick commerce sector. Controlling its expenses and on a clear track to follow, BigBasket is all set to create strong traction in FY25 on the back of the good performance of FY24.