Alibaba-backed BigBasket ramps up subscription business; acquires smaller rival DailyNinja

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Updated: March 24, 2020 2:13:50 PM

BigBasket currently competes with SoftBank and Tiger Global backed Grofers, Amazon Fresh and Amazon Pantry, Flipkart Supermart etc in the grocery play. Swiggy and Dunzo have also been in the grocery segment.

The acquisition will help bbdaily to by 150-200 per cent in the coming 12 months.

Alibaba-backed e-grocery company BigBasket has acquired smaller rival DailyNinja that is largely into the delivery of daily need products such as milk, bread, eggs apart from fruits, vegetables and more. With this acquisition, BigBasket’s online milk subscription service — bbdaily, which claimed 1.6 lakh daily deliveries, will have to access to around 1.1 lakh customers of DailyNinja transacting daily and a network of 2,000 milkman partners, according to a statement by BigBasket. DailyNinja currently operates in Bengaluru, Hyderabad, Chennai, Mumbai and Pune and would have access to non-milk products of bbdaily such as bakery, snacks, vegetables, fruits etc.

Access to DailyNinja’s base of milkman partners gain significance for BigBasket as “Business with small traders is a key and growing part of BigBasket’s business,” said Hari Menon, Co-Founder and CEO, bigbasket, even as the company aims to “achieve breakeven much sooner than planned,” he added. BigBasket said its focus is to grow the subscription business to fulfil the recurring consumption needs of customers at low delivery costs. It had earlier acquired milk-delivery startups RainCan, Morning Cart and a controlling stake in Savis Retail which made IoT-enabled snack vending machine Kwik24.

BigBasket currently competes with SoftBank and Tiger Global backed Grofers, and large horizontal players like Amazon Fresh and Amazon Pantry, Flipkart Supermart etc in the grocery play. “When we started DailyNinja 5 years ago, bigbasket was the company we were hoping to emulate,” said Sagar Yarnalkar, CEO and Co-founder, DailyNinja. The acquisition will help bbdaily to by 150-200 per cent in the coming 12 months.

Also read: Coronavirus cripples funding in young startups as investors redirect focus on conserving cash

Over the past five years, India’s grocery market has seen a few shakeups and a handful of deals before the likes of BigBasket and Grofers climbed on top. PepperTap, LocalBanya, ZopNow have been the biggest casualties in the sector while Grofers acquiring My Green Box, Swiggy’s acquisition of Super Daily, and Milkbasket-Veggie India deal are some of the buyouts occurring in the market. Apart from Swiggy, which jumped into the market with Swiggy Stores by listing offline stores on its platform, its rival Zomato is also reportedly planning to enter the grocery space while players like Dunzo have already been in this segment.

Online grocery segment, having wafer-thin margin, is likely to grow at 60 per cent CAGR from around $2.1 billion in gross GMV in 2019 to $8.7 billion in 2022 driven by daily essential and express delivery services, according to a RedSeer report in September last year.

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