How BigBasket plans to enter the crowded group buying segment

Bengaluru: Tata Group-owned etailer BigBasket has started testing a group buying model for delivering groceries in Tier IV towns amid growing competition in the category, according to people briefed on the matter.

BigBasket’s move to experiment with community buying—or what’s loosely called social commerce—comes at a time when companies are trying different ways to amp up their grocery and essentials verticals amid an increase in demand for these categories online.

With this, the Bengaluru-based online grocer will join a growing list of ecommerce firms— including Walmart-owned Flipkart, SoftBank-backed Meesho, DealShare and Udaan—which have been making aggressive moves in this space to widen their customer base and serve value-conscious users.

“They (BigBasket) have started testing the group buying model in areas what’s often called ‘Bharat’—beyond Tier II and III towns—starting with Karnataka,” a person aware of the matter said. BigBasket cofounder and CEO Hari Menon declined to comment.

“There is not going to be a one-model player (in grocery),” said Arpit Mathur, partner at consulting firm Kearney, when asked about BigBasket’s latest experiment. “Everyone looks at China as a developed online grocery market. There, online grocery comprises 15-20% of overall grocery retail. That itself has four or five different models. BigBasket is an out-and-out grocery player. They would want to have an offering for all types of buyers.”

Pioneered by Pinduoduo, group buying of groceries online took off in China’s small towns before catching on in larger cities. Pinduoduo is a relatively new ecommerce player in China compared to Alibaba and JD.com. It had a 13.2% share of the country’ ecommerce market in 2021, according to New York-based market research firm eMarketer, putting it in third place behind Alibaba and JD, which had a 47.1% and 16.9% market share, respectively.


Multi-platform approach
With group buying for Tier III and IV towns, BigBasket is looking to widen its user base beyond the metros. The company currently operates in around 30 cities across India. All its big rivals have launched services to tap users beyond the top cities. Flipkart recently added groceries to its social commerce app Shopsy, while Meesho has told ET it would double down on the category through Farmiso. Startups such as DealShare and Udaan—through Price Company—are other leading ecommerce experimenting with group buying of groceries and other essentials beyond metros.

BigBasket is also expanding into express deliveries and is said to be playing a crucial role in Tata Digital’s ‘super app’ plan, as reported by ET. Sources said BigBasket's express delivery service BB Now will be launched soon, after being tested in parts of Bengaluru.

Menon told ET in November that the firm would also bring all its grocery offerings into its main app, which is being referred internally as the 'BB super app'. He said the company had also begun to work on including its subscription-based essentials delivery service BB Daily in the main app.

Meanwhile, quick commerce—10 to 20 minute deliveries—has emerged as a convenient way for customers to buy groceries in big cities. The sector is seeing massive investments for platforms such as Swiggy’s Instamart, Reliance-backed Dunzo, Zomato and Blinkit, and Mumbai-based upstart Zepto. Ride-hailing firm Ola is also trying its luck in the segment—again.

Last year, Menon had first told ET that the company would launch its own 10-minute grocery delivery BB Now after having learnt many lessons on offering quick deliveries over the years.