BigBasket, India’s Largest Online Grocer, Expands Its On-Demand Delivery Service

BigBasket, India’s largest online grocer, is boosting its logistics network to compete with companies that offer very fast deliveries. The Bangalore-based company, which was founded in 2011, will open ten new warehouses in each of the major cities it serves (Bangalore, Hyderabad, Mumbai, Pune, Chennai, and Delhi), as well as 50 smaller towns.

This may help BigBasket ward off competition from hyperlocal startups like Sequoia-backed Grofers and PepperTap, which are smaller but expanding rapidly and offer deliveries in less than two hours.

BigBasket currently offers four delivery slots throughout the day of an hour and a half each, with same-day delivery is available for orders placed before noon.

The rise of hyperlocal food delivery startups is fueled by India’s highly fragmented retail market, where the vast majority of stores are family-owned and few major players dominate. Hyperlocal startups make it easier for customers to do their regular grocery shopping and competition means that companies like BigBasket will have to either offer increasingly short delivery times to keep up or consolidate with other players.

Last week, BigBasket acquired Delyver, a hyperlocal food delivery startup also based in Bangalore. While the two companies will maintain separate operations, BigBasket can now use Delyver’s fleet, which promises delivery within an hour in almost 40 Bangalore neighborhoods.

BigBasket founder and chief executive officer Hari Menon told the Economic Times that its new warehouse will allow the company to expand its business model. While most of its orders come from people doing their regular grocery shopping, BigBasket’s smaller warehouses called “dark stores,” will be able to handle smaller, last-minute purchases more efficiently.

In smaller towns, BigBasket’s dark stores will enable shoppers to receive purchases overnight. The company plans to expand into Mysore, Coimbatore, Madurai, Trichy, and Vizag starting next week.

Unlike Grofers and PepperTap, which partner with small local stores, BigBasket carries its own inventory, which is a more expensive business model but gives the company greater control over its products. According to Crunchbase, BigBasket has raised $35.8 million in funding so far.