BigBasket is one of the first Indian online grocery delivery service companies. It claims itself as a one-stop-shop for all of your daily needs ranging from household products to groceries. BigBasket became the largest online grocery market in India with over 5 million customers. It operates in more than 25 cities in our country. With a massive valuation of Rs.26,278 crore, BigBasket is all over the news headlines. Reason? BigBasket revenue.
There is not a striking difference between the BigBasket revenue. But there is a massive difference between the loss made by the company in the last two fiscal years.
Go through the write-up to know the details of BigBasket’s financials in FY23.
BigBasket Revenue Breakdown
BigBasket, a B2C company, earned revenue of Rs.7,434 crore in FY23. Whereas it earned Rs.7,095 crore in the last fiscal year.
Let’s look at the revenue earned by the company in the last two consecutive fiscal years.
|Sale of grocery and household products||Rs.7,175 crore||Rs.6,879 crore|
|Advertisement income||Rs.230 crore||Rs.173 crore|
|License income||Rs.6 crore||Rs.5 crore|
|Membership Income||Rs.4 crore||Rs.23 crore|
|Scrap Sales||Rs.19 crore||Rs.15 crore|
|Total Revenue Earned||Rs.7,434 crore||Rs.7,095 crore|
Note: We have already explained the revenue sources and working strategy of BigBasket in the article “BigBasket Business Model.” You can look into it for more details.
BigBasket Expenses Breakdown
After seeing positive growth in revenue in the last two fiscal years, you may assume that the company is running successfully. Well, it is true that it is running successfully! But the mounting losses may raise your concerns about the company.
Let’s head toward the expenses side, and see the expenditures that cost the most for BigBasket-
|Cost of goods sold||Rs.5,969 crore||Rs.5,830 crore|
|Employee benefits||Rs.916 crore||Rs.739 crore|
|Advertising and promotional expenses||Rs.385 crore||Rs.184 crore|
|Logistics||Rs.682 crore||Rs.454 crore|
|Subcontractor expenses||Rs.165 crore||Rs.117 crore|
|Others||Rs.881 crore||Rs.605 crore|
|Total Expenses||Rs.8,998 crore||Rs.7,929 crore|
How does BigBasket work?
After seeing the whopping expenses, the obvious question that may come to your mind is- How does it work? Why does the expenses exceed BigBasket revenue? What is its working strategy that consumes such a humongous amount of money? Read the following sub points to get the answer.
Some prime working strategies of BigBasket are-
BigBasket has a bunch of retail partners, bank partners, and delivery partners. The retail partners include local farmers, manufacturers, and wholesale retailers. Through these partners, BigBasket can source the products directly. The bank partners help BigBasket to offer discounts and promotions to its customers. The delivery partners include a fleet of delivery agents who deliver the products directly to your doorstep.
2. Usage of Advanced Technology
BigBasket operates through its own website and mobile app. Its tech-centric approach has helped it to enhance its operations seamlessly. Although it helps them to optimize the inventory, BigBasket has to spend heavily to maintain its technology.
3. Dark Stores and a strong supply chain
BigBasket spends heavily to maintain its warehouses, dark stores, and logistics network. All of this helps it to manage the inventory effectively and efficiently.
Mounting Losses: BigBasket Financials, High Expenses & Low Revenue
By now you have realized what could be the financial condition of the company. Spending heavily on expenses and earning low revenue comparatively, resulted in the mounting losses of the company.
Look at the overall financials of BigBasket–
|Revenue Earned||Rs.7,434 crore||Rs.7,095 crore|
|Expenses||Rs.8,998 crore||Rs.7,929 crore|
|Profit/Loss||Rs.1,535 crore||Rs.812 crore|
High Expenses and low revenue led to the humongous loss of Rs.1,535 crore for BigBasket. Its cash expenses have surpassed the threshold value. Due to this, its annual losses mounted over three folds.
Future Plans of BigBasket
The e-grocery firm BigBasket is planning for rapid expansion. It is seeking to expand its network to over 100 towns. As per recent reports, its presence will cover over 450 towns in India. Also, it is planning to launch several brick-and-mortar shops. However, this project is in the trial stage.
Despite facing heavy losses, it is optimistic about its future operations. BigBasket, owned by Tata, will launch its IPO soon. It is hoping to raise approx. $1 billion through the IPO. The company’s development goals include the introduction of new goods and services.