BigBasket to invest Rs500 crore to ramp up farmer sourcing, technology

Mumbai: Online grocery store BigBasket expects to spend up to Rs500 crore to strengthen its technology and back-end farmer supply chain as it looks to more than double its customer base to 20 million by 2020, a top company executive said.

“We are focusing significantly on strengthening our back-end farmer supply chain programme called Farmer Connect. Presently we are working with 1,800 farmers, and we will bring about 5,000 farmers into our fold in a year’s time,” Hari Menon, co-founder and CEO of BigBasket, said here.

“We ensure they get better prices, paid on time. About 85% of our produce comes directly from farmers and we are going to strengthen that. We work closely with hotels, and restaurants as well as nearly 2,000 kirana stores. We want to deepen our engagement with farmers for the supply,” he added.

“All our hubs are close to farming locations. We have about 26 warehouses in 30 cities,” he further said.

The company is also aggressively growing its user base, eyeing 20 million customers by 2020 from the 8 million now. The company also plans to invest in technology to further strengthen customer service areas and back-end efficiencies, Menon said.

He added that the expected investment on all these projects would be up to Rs500 crore.

“These past few years we have settled down and got our back-end in place. We have a well-oiled system, from delivering on time, accuracy in delivery, and accuracy of stock levels,” he said.

Asked about profitability, Menon said the company last year became operationally profitable in two cities—Bengaluru and Hyderabad.

“In the next two months, three more cities including Kolkata, Chennai and Ahmedabad will be operationally profitable, and in six months all our cities should have broken even on a standalone basis,” he said.

This will enable the company to then allocate its resources towards media spending and other activities to achieve its growth targets, he explained. Presently, the company has about 16,000 employees, including delivery staff.