Tale Of Two Strategies

Going deep versus going wide: Which will trump the other as online grocers BigBasket and Grofers battle to corner market share?

- Sayan Chakraborty

Both have burnt through millions of dollars for a podium finish in online grocery. Both are backed by moneybags, Soft Bank and Alibaba, whose interests are perceived to be aligned. But, Big Basket and Grofers, the two largest homegrown online grocery stores, have adopted divergent strategies to survive and thrive.

Big Basket, the Alibaba-backed market leader with approximately 2,000 crore in sales in FY18, lives by the holy grail of grocery business— spoil consumers with multiple choices under one roof. Grofers, funded by Soft Bank and Tiger Global Management, has instead chosen to champion a select few categories to hold fort against Big Basket and an impending incursion from the likes of Amazon and Flipkart.

Opinions are somewhat skewed in favour of Big Basket’s methods. Says Ankur Bisen, associate vice president of retail and consumer product at Technopak Advisors, a consultancy firm, “One cannot pick and choose categories in grocery retail. One has to complete the offering and that principle does not change. For a consumer, it is a mixed basket, where all categories will have a 10-15 percent share.”

Grofers, however, has defied conventional wisdom. The firm clocked 700 crore in sales in FY18, up from 250 crore the year before and is on track to exit FY19 with 2,500-3,000 crore in sales, says

co-founder and chief executive Albinder Dhindsa. Monthly cash burn, however, remains constant since mid-2016, at approximately 15-18 crore. “If you pierce a stack of papers, you need a very sharp tip. The idea is to have a sharp tip to penetrate the market. We are not in the width game but the depth game,” says Dhindsa.