Farm Level Connect: Empowering Agri-Commerce in India

A Case Study by BigBasket

Fab Journey
In 1999, V S Sudhakar, Hari Menon, Vipul Parekh, Abhinay Choudhari and V S Ramesh started
one of the first online businesses in India called Fabmart.com. In 2001, they started an online
groceries business as a part of Fabmart. In spite of the market being in its infancy then,
Fabmart.com did exceedingly well. They then went on to setup a physical retail chain called
Fabmall which was a chain of grocery supermarkets in the South of India. This business was
sold in 2006, and eventually renamed by the buyers, the Aditya Birla Group. The founders
however were always enamored by online grocery and recouped to launch BigBasket.com in
2011.

About BigBasket
Established in 2011, bigbasket.com (Supermarket Grocery Supplies Private Limited) is India’s
largest online food and grocery store with over 18,000 products and 1000 brands in their
product catalogue ranging from fruits and vegetables, rice and lentils, spices and seasonings,
packaged products, beverages, personal care products, meat and other processed foods.

The company operates under four key segments: full-service platform primarily designed to
cater to the monthly planned grocery demands of customers in Tier-I cities; express specialty
delivery to cater to the immediate, top-up requirements for items with limited shelf-life;
partnerships with specialty stores to supply perishable items such as meat and meat products;
and B2B model that provides inventory management services for smaller provision stores and
hotels. The company is backed by strong promoters with extensive experience of retail and e-
commerce, and institutional investors such as the International Finance Corporation (IFC),
Sands Capital, Helion Advisors, Zodius Capital and Bessemer Venture Partners to mention a
few.

Case Overview
BigBasket currently has a customer base of 8 million and looks to double its customer base to 20
million by 2020. It works closely with hotels, and restaurants as well as nearly 2,000 kirana
stores. It has 26 warehouses in 30 cities and all their hubs are close to the farming locations. The
company also plans to invest in technology to further strengthen customer service areas and
back-end efficiencies.

Fruits and vegetables form a major part of BigBasket sales, and BigBasket is very committed to a
mutually beneficial relationship with farmers across the country. BigBasket currently procures
85% of its fruits and vegetables requirement directly from farmers under a programme called
‘Farmer Connect’. The programme also facilitates relationship building with these farmers and
value addition via training programs for understanding and implementing practices that
improve the quantity and quality of agricultural yield.

Recently, BigBasket collaborated with Government of Karnataka and local farmer associations,
with the intent to supply and procure organic produce and train farmer groups on grading,
packing and quality aspects. The initiative aimed to create a cascade effect by eliminating
middlemen from the value chain - Farmers would reap benefit of up to 15-20% above prevalent
market prices and retailers could sell the produce at cheaper rates to consumers. Consequently,
the initiative also introduced small and marginal farmers to national level markets.

Barriers to E-commerce Adoption by Farmers

 Product complexity: The transformation of crop and livestock production from commodity
to differentiated product industries driven by the shifting focus of consumer demands
towards healthier, convenient and highly differentiated food ; their demands for food safety
and trace back ability; from continued advances in technology; and from the need to
minimize the total costs of production, processing and distribution. This has led to increased
complexity for the Farmer who was till now comfortable in his own space.

 High-touch Transactions: Even though farms have become increasingly more business-like
in their structure and farmers operate in a B2B Environment, individual farms still receive a
great deal of personalized individual attention. Buying inputs, selling gain or Livestock,
Purchasing Machinery, obtaining financing and arranging transportation are all transactions
traditionally conducted on a one to one basis.

 Lack of Training: The Myth in B2B Commerce, If you Build it, ‘they’ will come is proved
wrong by some farmers who still are not comfortable in doing business with the Online
Grocers. A weak Sales network and a poor customer service are one of the strongest
barriers.

Unlocking the Agri-Commerce Opportunity

BigBasket is looking for full scale solutions through which it can work together with farmers
towards the objective of doubling the farmer’s income and providing consumers a quality yield.
This can include interactive ways to impart knowledge on farming practices, location specific
and produce specific solutions, quality checks and other out of the box solutions that you can
think of.

"Big Basket" intends to train farmer groups on grading, packing and quality aspects. "The
intention is also to enable farmers sell produce directly to consumers. Hence, both sides will
explore options for co-branding as well. This is a big step towards "from-farmers-to-consumers"
direct linkage,"

Problem Statement
Devise a strategy for Big Basket to provide added value to farmer via:
1. Doubling the farmer’s income, increasing awareness and bringing more farmer community
on board
2. Differentiated/Unique Selling proposition from other online grocery players, Supermarkets,
Retailers etc.
Format
• The case analysis document must be in MS Word/PDF format (.doc/.docx/.pdf)
• Must not exceed 2000 words (excluding exhibits and excel sheets)
• Font Type: Arial/ Calibri with text size of 11