BigBasket, the retail giant under the Tata umbrella, has set its sights on a substantial increase in the monthly revenue generated by its quick commerce arm, BB Now. The company’s Chief Operating Officer, TK Balakumar, revealed this ambition on the sidelines of the E-commerce and Digital Natives Summit 2023, held in Bengaluru earlier this month.
Speaking at the event, Balakumar outlined the company’s strategy, stating, “We are on the cusp of achieving a significant milestone by doubling the monthly revenue of our quick commerce arm. If we manage to attain a figure ranging between Rs 250 and 275 crore by the close of March 2024, we will achieve a balanced contribution margin.”
As of March 2023, BB Now had recorded a revenue of Rs 175 crore. Balakumar emphasized BigBasket’s dedication to achieving profitable growth across its entire business landscape, including its quick commerce endeavours. “Our objective for this financial year is to attain contribution margin neutrality, encompassing our quick commerce operations,” he asserted.
Balakumar further elaborated on the company’s approach to achieving this goal, highlighting a strategic balance between growth and profitability. This involves optimizing infrastructure, embracing automation and advanced technology, enhancing operational efficiency, empowering warehouse staff productivity, and expanding the use of electric vehicles.
Responding to inquiries regarding the timeline for profitability, Balakumar pointed out that the company was already in a positive contribution margin position from the perspective of its full-service model. He stated, “We are working to consolidate our current contribution margin from 2% to 4-5%. Our objective is to approach the 4% mark, effectively doubling our performance from the previous year.”
Discussing the broader business performance, Balakumar disclosed that the company had achieved a 25% growth rate in the preceding year and was presently operating at a topline figure of 1.5 billion dollars.
With regard to BigBasket’s financial status, it was revealed earlier this year that the B2C division had experienced an 89% increase in losses for the fiscal year ending March 2023. However, operating revenue witnessed nearly 5% growth during the same period.
Balakumar confirmed the company’s intentions regarding an Initial Public Offering (IPO), stating, “We are deeply committed to this journey and are diligently preparing as a leadership team.”