Why are Amazon, Reliance, Walmart backed Flipkart, and several others competing for a piece of the action in online grocery retailing? Consider some numbers from Redseer:
⚡️Grocery is expected to be a $790 billion market by 2024. Of this, online grocery is expected to be around $18.2 billion.
⚡️ The market, currently around $603 billion in size, is dominated by traditional retail (95.7%).
⚡️Only 0.3 % of the market is served by online retail and 4% is served by modern retail. The remaining is still catered to by traditional stores.
What do these numbers tell us?
The headroom for growth is massive! At the risk of sounding cliched, I’ll say this: even if you end up with a modest 1% of the market, you’d have a business that sells goods worth over $7.9 billion a year.
What will help drive this growth?
Improvement in supply chain infrastructure
Expansion to smaller cities
Government policy that allows 100% FDI in food and retail
Did the lockdown slow them down? Not at all. On the contrary, after a slowdown in the months of March and April, they grew faster.
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Since I started tracking the sector in 2012, dozens of startups have come and gone. But one company has been constantly on my radar: BigBasket. The company, which mostly focused on heads down execution, was valued at $1.2 billion in their previous round of funding (2019). As per reports, their valuation is likely trending upwards of $2 billion now.
BigBasket is not our typical startup with young founders, snazzy tech, and headline-grabbing public relations machinery. Its founders are older, it works in a business with razor-thin margins, yet is inching closer to profitability, and it has held its own even when hyper funded startups unleashed deep discounting blitzkrieg.
How does the company win? What makes it tick? In the book ‘Saying No to Jugaad: The Making of BigBasket’, authors T N Hari and Subramanian MS tell you how. The book gives us an insider’s view of what helps the company succeed. It talks about culture, strategic decisions, and focused execution. In this episode of the podcast, we discuss the book. This episode is brought to you by the Gaja Capital Book Prize which was instituted to celebrate the best books on contemporary Indian business.
Listen in!
JPK & Ravish
PS: Also check out this episode on getting startup hiring right on The Orbit Shift Podcast. It is a podcast that I’ve been working and brings you practical insights from founders, investors, and experts.
★ Giveaway alert ★
We’re giving away five copies of the book ‘Saying No to Jugaad: The Making of BigBasket’ to our listeners. All you have to do is to say something (be nice 😊) about this episode on Twitter or LinkedIn with the hashtag #UseCasePodcast. Tag me and Hari.
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⚡️The BigBasket Story: From being written off to $2+ Bn valuation