In 2020, BigBasket witnessed an unprecedented surge in demand as it welcomed a new set of customers who were buying groceries online for the first time. Amid the dramatic shift in consumer behaviour, Arun Jayaraman, Head of Marketing – Loyalty, Site Merchandising and Partnerships, BigBasket, tells WARC how the online grocer sees the Indian market growing after weathering the pandemic storm.
This article is part of a Spotlight series on on what e-commerce 2.0 means for brands in India. Read more
- A massive surge in the number of people wanting to try online grocery for the first time during the lockdown helped BigBasket further reinforce its dominance in the segment.
- Social commerce is going to play a key role in time to come and this is going to be an area that online grocers will look into seriously.
- With the grocery segment attracting new players amid a growing market, it will be critical to understand consumer needs and provide the best customer experience.
WARC: The pandemic, the lockdown, the economic impact, these were unforeseen. What was BigBasket's immediate reaction? Was there a major rethinking of marketing strategy?
There was an organic demand for groceries and food online and there was not a great deal of rethinking of marketing strategy because we had done our groundwork in the past. We have been in the business for the last 10 years. What changed was the fact that there was a huge swing in terms of customers wanting to try online grocery. This helped us scale pretty quickly and massively.
The bigger challenge was how to ensure we were ready operationally to service the surge in demand. In terms of both our brand awareness and being the first to enter the market, we were in a position of strength before the pandemic. This reinforced that effect for us during those two to three months.
WARC: It would be stating the obvious that BigBasket was among the brands that did well during the pandemic. Did you use this as an opportunity to expand your reach?
In terms of reach, we are present in all the major markets within the country. We are a localised business. We have warehouses locally, our inventory is curated from the local market. At present, we are in around 32 cities pan-India.
It was more a question of how online grocery was initially more for the niche market, the SEC A customers who were buying online, for instance. This turned the tide because people were worried about going offline to buy groceries, especially in the larger retail formats.
We built the base over the last 10 years – the opportunity was there for us to leverage operations. The biggest challenge was the first two to three weeks that were pretty hard but after that, all of us rallied together to make sure we were ready to deliver on the demand.
We saw a 300-350% jump in customer acquisition for those three months.
WARC: Have you also been actively encouraging consumers who probably still aren’t as tech-savvy? Those who aren’t comfortable shopping online, shopping on the phone, and still prefer buying from the regular brick-and-mortar grocery store.
During the pandemic, we did two things pretty well. One, we understood that the COVID-19 impact is far more serious for senior citizens. So we opened a senior citizens helpline and we took orders. Customers could call the helpline, we wrote down the orders manually and fulfilled them.
Second, we launched community delivery where an entire apartment could place an order because the more you aggregate, the better it is in terms of optimising efficiencies. We created a platform for a bunch of people to place orders and we could then deliver in bulk.
These two initiatives that we took during the pandemic can pave the way for future ones as well. Going forward, we are also exploring other options. For example, social commerce will become a major key driver ahead. WhatsApp will play a key role. We want to work on things like these and rather than just doing it for the sake of it, we want to make sure that we provide the best experience even there. We are working internally to build those things out for the near future.
WARC: How differently are you looking at e-commerce now? Would you say that 2020 was a revelation and strategies are changing in a big way?
I can talk about online grocery. This category is very touch-and-feel. People are worried about quality. You have to straddle between three to four different features, choices, quality, convenience, and then you have pricing. All these are key factors.
For grocery, yes, it was a watershed moment. Right now, it’s more mass-market than what it used to be. With more opportunities, we have seen a lot of new entrants in the grocery market. The challenge for us will be to make sure we maintain our superiority in terms of market share, and at the same time, be the frontrunner in growing the online grocery market.
We still have a long way to grow based on multiple data points that have come from a bunch of surveys. It is very apparent that there is a market, which is untapped; there is a lot of willingness to try online grocery. We will have to be the frontrunner in setting that agenda and that’s what we are working on and that way, our strategies will change.
We are present in every need of a user. It could be a top-up need or a stock-up need. We already have our milk subscription online that we might expand into other markets as well. We want to be present everywhere, so we don’t turn down the opportunity that we have at the end of this.
WARC: You mentioned that there are a number of new players coming in. The thing is these new entrants are already established players in their own segment. Do you see the market maturing from the perspective of both sellers as well as consumers?
We always welcome competition. As you pointed out, these players are not new to the market but are possibly, relatively new to selling groceries online. This will definitely grow the market. However, we believe in our ability to provide the best. Our USPs are primarily convenience, pricing and a few other factors. We believe in our ability to provide trusted experience. I don’t think that’s a problem for us.
The consumers will be spoiled for choice. Even within the existing market, you see a lot of switchers because in grocery, it is difficult. In a typical basket size of about 17 to 18 items, any one of them can go wrong either objectively or subjectively. Subjectively here I mean, the product quality might not be up to the mark, or the delivery experience could disappoint. So there will be a lot of switching behaviour. In that sense you will have options to purchase from.
For the retailer, it will be most important to provide the best customer experience, which will spin the needle. The other factors, price and quality, can be worked upon. And currently, in the market, there is no major deviation among the larger players. The key lever to use would be customer experience, which we have a fair degree of experience in.
WARC: From BigBasket’s perspective, how has the profile of the Indian consumer changed since 2020? What are some of the new consumer needs or preferences that you’re trying to meet?
In grocery, purchases can be defined by two segments. One is your stock-up and the other is the top-up segment. The top-up segment is something that you want to buy based on either an impulse or something that you need immediately. Most of the market share for the top-up segment goes to kirana because it is right next to home and people can go and buy from there.
And this is a market that is primarily based on the speed of delivery. People expect faster deliveries, especially for grocery. It may not be half an hour or one hour, it can possibly be in the range of half-day or one day, depending on the size of the basket.
For us, the next major challenge is to address the top-up market and to do that, we have certain initiatives that we’ve taken already. We have vending kiosks placed in a lot of apartments primarily in Bengaluru; we call it BBInstant, where we stock up most of the impulse purchases. We also have BBDaily, the milk subscription service, where we deliver milk early in the morning. Along with milk, we also deliver around 2,000 SKUs of groceries as well.
It’s a latent need that consumers have these days and this need is also varying among customer cohorts. For example, if you look at younger couples or bachelors, they want things urgently. They are used to a certain level of service from food delivery service platforms.
The second latent need is the wide degree of assortments. People don’t want to shop between multiple vendors or players in the market. They want as much as can be offered in one single shop. It’s also something we are aiming for. Our next goal is to make sure we cater to almost 99% of our user's basket across categories. We are making a lot of changes to our back-end operations and inventory management systems to make sure a product that is possibly available in Hyderabad can be accessed by those in Bengaluru, and similarly in Chennai or Delhi. We are working on this diligently for the past two to three months.
These are the two things that will make a major difference. Otherwise, on the pricing front and other factors, most players are almost on par with each other.
WARC: Delivery is a critical component of not just service product fulfilment but also a major brand touchpoint with consumers. But the marketing function doesn’t have much control over this last mile. How are you navigating this to ensure that the consumer experiences are consistent and positive? Especially during the pandemic, you probably lost customers when they preferred to be in a long queue outside a store rather than wait for an online grocer to deliver.
I am sure we would have. Since our capacity is finite and the demand was more than we could deliver, I am sure we would have lost both customers who came the first time to try BigBasket or online grocery and also loyal customers we couldn’t sort of address. Although we made a bunch of changes to make sure that our loyal customers are serviced better.
We have a strong learning and development team. Lot of our agents or delivery executives are part of the organisation. They go through a stringent learning and development process where we train them across a bunch of factors and also how to react in certain situations.
There is a level of delivery experience that we try to maintain. The only time it went slightly haywire was during the pandemic because we didn’t expect the sort of reaction to it. In terms of marketing, we closely track our customer’s voice. We work with our customer support teams and operations teams to figure out what’s happening on the ground. We listen to our customers.
We have a sense of what is happening. It’s not like we can’t completely act on it and wherever there’s a complete deviation from the process, we make sure we raise it internally. But in terms of the experience part, I believe that we do a great job at training a lot of our executives and making sure our experience is consistent across cities.
WARC: Do you think Indian consumers are largely going to stay online now that they have experienced the convenience of shopping from home?
If you take a typical online consumer, especially one who is shopping for groceries, there is a way the purchases are made. The customer comes once or twice a month to large players like us. For all top-up needs, depending on the digital maturity and the other platforms that he/she uses, most of those orders go to the kirana stores. There are also those who buy both online as well as from a modern trade retailer. There is a plethora of options available.
To capture the customer’s entire wallet on a single platform might be difficult for the next five to six years. We’re trying to do the best we can by addressing all the markets necessary for online groceries.
WARC: You don't want to speculate, of course.
You might see a larger share of wallet possibly coming to online than before but the old habits of going to the nearby shop or a modern trade retailer will sustain even post-COVID.
WARC: As a marketer, what have been some key learnings about e-commerce in India and where do you see it heading? What is e-commerce 2.0 to you?
Difficult question to answer. This might be very simplistic as an answer but I think the market is set for growth.
For instance, people who come to pay their bills online, how do you move them to buy more articles that are branded where quality is not such a major concern, and then how do you migrate them to buy food online? That's how the funnel might work.
The Tier II markets are growing faster than the Tier I markets. In Tier I, the rate of growth has been fairly steady. I don't think it will be exponential in the foreseeable future. In Tier II, the market has matured pretty drastically over the last year. There is access to the internet, the digital maturity has gone up by leaps and bounds. Those markets are primarily value-driven. WhatsApp is a major channel for those markets already. We have to make sure that social commerce picks up.
Also, we actually don’t focus on the vernacular level but if you look at Amazon, they are. So we have to make sure we appeal to that segment of the population as well.
To broaden our reach and ease of access is something that we will have to work on. The company that does this, I believe, will succeed.
WARC: What advice do you have for fellow marketers looking to further develop their own e-commerce marketing strategies?
A lot of people in the market are looking at more channel strategy rather than an overall company level strategy in terms of who to address, how to address, key value features, how to drive value to the user. The basics are something that marketers have to focus on for now. Channel strategy can flow from there.
What I would suggest is make sure that you zero in on who your customer is and ensure you devise a strategy that appeals to that set of customers. Be very consistent in your comms across channels. Over time, that will help rather than doing short bursts of large campaigns, which might only yield in the short run.
Read more in this Spotlight series
E-commerce in India: A chance to do right
How e-commerce behaves differently for different consumers in India
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E-commerce: Consumer sentiment data
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E-commerce in India: Where do we go from here?