For FY23, BigBasket’s B2C division’s net loss nearly doubled.
Innovative Retail Concepts, which runs the business-to-consumer (B2C) arm of grocery and quick commerce firm BigBasket, on Thursday reported an 89% increase in its net loss for the year ended March 2023 even as its operating revenue grew by almost 5%.
The Tatas-owned e-grocer earned Rs 7,434.4 crore in operating revenue in FY23 while its net loss stood at Rs 1,535.2 crore, the company said in its financial filings.
Revenues from sale of products rose 4.3% on year at Rs 7,175 crore. Advertising – the next largest source of revenue – saw a 30% jump to Rs 230 crore in the last fiscal. BigBasket generates advertisement revenue from selling banner ads or top slots in search results on its app and website.
Procurement of goods was the biggest cost, increasing 2.4% from a year ago to stand at Rs 5,969 crore. Spendings on employee benefits surged 21% to Rs 916 crore, while advertising expenses roughly doubled to Rs 385 crore.
BigBasket operates through three main models – main grocery app called BigBasket that provides scheduled delivery, quick commerce app BB Now, and subscription-based grocery delivery app BB Daily. All the services barring BB Daily are now nestled inside the main BigBasket app.
The continued losses for the nearly 13-year-old firm come as it faces intense competition in both grocery delivery as well as relatively new verticals like quick commerce.
For instance, in the scheduled delivery business, BigBasket faces competition from the likes of Reliance JioMart, Walmart-owned Flipkart, and Amazon India. In the subscription-focused delivery business, it faces competition from Reliance-owned Milkbasket, and in the quick commerce segment, it competes with the likes of Zomato-owned Blinkit, Swiggy Instamart, and Zepto.
Tata Group bought a majority stake in BigBasket in 2021, buying out the entire stake of its-then largest shareholder Alibaba in a deal valuing the company between $1.5 billion and $2 billion.
The Tatas had invested in BigBasket’s parent entity Supermarket Grocery Supplies, soon after which Innovative Retail Concepts, which runs the B2C arm of BigBasket, was made a subsidiary.
AdvtBigBasket raised a further $200 million in new funding from parent Tata Digital and a few others in December 2022, at a heightened valuation of $3.2 billion, as reported by ReTale.
In that time, it has had to solidify its position in the quick commerce fight with BB Now, and has often been roped in to help with the tech stacks of other Tata Digital entities like 1MG and Tata Cliq. In February, ReTale reported that competitor Reliance JioMart had quietly closed down its quick-commerce entity, JioMart Express.
Since the acquisition, BigBasket has become an important part of Tata Group’s online retail play that also includes the likes of e-pharmacy app 1MG, online apparel retailer Tata Cliq, and the group’s super app Tata Neu.
In March, ReTale reported on Tata Neu’s muted performance in the first year of its existence, as Tata Digital president Mukesh Bansal formally left the organisation. Bansal stepped away from day-to-day operations at Tata Digital in January.
Bansal’s exit was followed by a few other rejigs at Tata Digital. Shivcharan Pulugurtha, chief strategy and business officer of Tata Neu, left the firm, ReTale reported last week. Gopal Asthana, former chief business officer at Nykaa Fashion, has been hired as the chief executive of its fashion business Tata Cliq, to replace Vikas Purohit who had quit earlier this year and joined Meta.
