Can BigBasket continue winning the profitability race?
Yesterday as I was purchasing groceries from a vending machine, old thoughts of the dot-com bust came flooding back. As one of the earliest e-commerce analysts in the world – working for Gartner, I have been observing this sector since 2000. I am bearish of the sector as I come from ‘show-me the positive cash-flow this quarter’ school of sales. However, a new player has quietly arrived in the Indian e-commerce scene that’s giving a lot of hope to old timers like me.
You guessed it – the company is BigBasket and the kiosk is the one they have put in many apartment complexes in Bangalore. While all the attention has been focused on Amazon vs. Flipkart saga, this company has
- managed to keep its accumulated losses low compared to the big two
- been using Shah Rukh Khan as a brand ambassador to reach mass-market in 26 towns of India
- have an experienced management team – who are long on experience & short on over the top self Public Relations – gives a strong perception of focusing on the job at hand. Their leadership teams is one of the most accomplished in the country you have never heard of.
- who have not hesitated to try out different experiments & form factors in delivering to the customer. I was surprised to see them the first in India to try out self-service kiosks. I would have expected a MNC to try this out – not BigBasket.
- not hesitated to charge a delivery fee – in the notoriously price fickle India market
- beats all players in their category by a distance in market-share
all with significant profitability for the last financial year.
I dont have enough data to understand what’s their accumulated ROI since inception. Nor do I know how this company will do in the future. However it gives a lot of joy to see e-commerce ‘startups’ trending to cash-positive and using investor-money to scale – and that only after frugally struggling & validating their business model!
#ecommercenostalgia #positivecashflow