I started building ShopasULike, the brand before BigBasket, investing all my savings of 2.5 million. Eventually, Metro decided to partner with me. I had decided that I would not carry any inventory, but would just run the front end. There would be back-end integration with Metro, which would send updates on what is in stock. The online platform was launched in April 2010.
We had limited presence — in a few residential complexes in Whitefield and other parts of the city — because of logistical challenges. Those were the days when I sweated it out, literally! I visited apartment buildings explaining how the store worked. We travelled in an eye-catching van.
I had been a grocery shopper — from Bhopal’s weekly markets, to London, Vegas and Bengaluru — and knew that unless I helped the customer avoid a trip to the store, my idea wouldn’t take off. I needed a full range of products, from chilled fruits and vegetables to staples. For mobile refrigeration, I customised a van for 1 million for transport. Did it pay off? I guess. It drew oohs and aahs wherever it went.
The Indian customer is used to examining the vegetable — breaking an okra tip or squeezing the tomato gently — before buying them. To compensate for this, I knew, the presentation was critical. I came up with a plan, after a lot of thinking. The vegetables would be placed in a black tray, called punnet tray, to bring out the colours of the veggies and fruits. They would then be shrink-wrapped with a nice sticker on top. Slowly, I started gaining traction.
Meanwhile, I reached out to my former boss, Kanth Miriyala at IGATE, and he advised me to find co-founders. I reached out to the Fabmart team, who had by then set up offline grocery stores by the same name. They merged with Trinetra, which finally was acquired by More, which Amazon bought recently. That would be new battle for us to fight, an interesting one too.
I had signed on Sudhakar, Vipul, Ramesh and Hari as advisors in July 2010. Over a year, we kept scaling up, adding more residential complexes. In July 2011, K Ganesh and Meena Ganesh reached out to Sudhakar. That was a coming together of three promoter groups — Ganesh, Meena and Shrini (Srinivas Anumolu) as one, the Fabmart four as another one and me, the third. Somewhere around October, we decided to marshal all our resources together and launch a new company and brand.
BigBasket was up and running on December 3, 2011, as a pan-Bangalore service and we moved all the customers from ShopasULike to the new platform that night.
My parents were not even aware I was venturing into something like this. My wife — my sounding board and my best friend — stood by me all along and was as sure as me that this would work, even when we had to sell our house to get the business going. The 2.5 million in initial capital had vanished in nine to 10 months.
Sports taught me to never give up, and be persistent. Some business partners had to opt out. Before Sudhakar and team came in, there was my colleague from Infosys. But, when investors backed out after initial rounds of discussion, he threw in the towel as he could not go on after five to six months without a salary. I was on my own thereafter.
During the ShopasULike days, investors were skeptical. Across the world, there were big failure stories such as of Webvan, which collapsed around 2000. Their attitude was most discouraging. Around August 2010, when we were doing around 30 orders a day, I had approached an investor. He asked me to come back when I saw 50 orders a day. It was laughable because to go from 30 to 50, I needed more manpower, delivery van and so on — the very reason I needed funds from him! I had to sell my house by then, in December.
I don’t know what I was thinking when I sold my house or what I would have done if my plan failed. But I was rarely stressed out. I had already gone through this cycle, of quitting a cushy job at Mitsubishi for Style Country which lasted only for six months. So, if the worst did happen, I could return to the corporate world. If I could manage that when my resume showed an experience of three years at Mitsubishi and a failed start-up, I was much better placed with over 10 years of work experience.
I never imagined I would fail, though I never imagined this scale of success either. My first order was just 250 gm of greens, but in the second month itself — that is in May 2010, I found my first customer who shopped for 5,000 in a month, I went around telling everyone that I just need 4,999 more of them!
It was not easy, starting BigBasket. There were difficult decisions to be made, but we stuck with them, be it with offering the complete range to the customer, giving on-time delivery guarantee or no-questions-asked return policy. We gained customers’ trust and they grew comfortable shopping with us.
Perhaps, the big milestone was the setting up of our warehouse. We did it for two reasons. One, Metro was the intermediary and they needed their margins. So, at the end of the day, we were taking home only 8%. After we built the warehouse and started buying directly, our margins shot up to 18%. Second was the cut-off time when we took the last orders for the day. We had to make time to collect items from Metro, segregate them and then deliver to customers, and so we took orders only till 6 a.m. Now, with the warehouse, we could take orders till noon. It has become a very attractive proposition for customers because the orders zoomed from a few hundreds to a thousand plus.
In the beginning, I remember how we had trouble with stacking in our warehouse. When we did it for the first time — with our planogram (a diagram that guides stacking) in place — we went miserably wrong. We had it down on paper, but reality was vastly different. So all of us sat around and did it all over again, and that ran pretty late into the night. I remember the rush we were in to implement it, since there was the business to run too.
We adapted quickly. When we began operating distribution centres, with the first one up in Bangalore in February 2013, we realised that we could sell items with our private label too from there. We could set ourselves apart with the quality of products we offered. That’s also when we started our Express service, realising that typically 20-25% of a customer’s monthly grocery spend goes into emergency buying. In 2016, we also partnered with neighbourhood specialty stores for sweets and confectioneries, since people spend a tidy bit on that every day and now about 3,000 orders come in every day for sweets and confectioneries.
But grocery business is not a piece of cake, margins are wafer thin. Even our initial growth at 100%+ (CAGR) wasn’t too aggressive. After the first funding round, from Ascent Capital in February 2012, we went from one to three cities — Bengaluru, Hyderabad and Mumbai. For three years, we operated only in these three cities. We paced ourselves deliberately to set up our dark stores and perfect the back-end processes. We grew in confidence and, in two years, we went from three to 25 cities. When we expanded, we also rolled out the Express delivery and specialty business.
Express delivery is so different now from what had been planned in those days. Then, we had tried tapping into the kirana-store network and share our technology with them. We thought we could maintain a small assortment — maybe 200-400 — products that could be needed urgently, and deliver them through the Express. The kiranas would stock these, which carried our private label, and deliveries would go fromhere. We signed up 25 stores in September 2014, enthusiastically. But, it was a disappointing experience. Not every store was professionally run — they kept different timings, many found it difficult to follow systems and technology, and there were helpers at these stores leaving frequently and it was a pain to constantly train the new recruits. We could not deliver a consistent experience, and knew that we could not scale up this way. That’s when we decided on delivering from our own warehouses. We do regular B2B business with kirana stores now, supplying the full range of our products to them.
Our first cheque — of $10 million — came in 2012, from Ascent Capital. By February 2018, the cheque size grew to $300 million. Our board has been supportive all along. Maybe it was comforting for them that we were able to achieve whatever business plans we chalked out. Alibaba is on board now. I wonder when we will have our tryst with Jack Ma.
In e-commerce, my role model remains Jeff Bezos. It is unfortunate that we could not strike a deal with Amazon. They had wanted to invest in BigBasket for a long time, but we had to turn their offer down since it did not match the board’s expectations.
We are part of the start-up story but we are not the typical start-up founders — that is, young passionate chaps brimming with energy, working as well as partying together. Well… I’m the youngest here and I’m 47. I would rather snuggle inside my nest, my home and spend time with my family when I’m free. ‘Free’ is a tricky word though. There is no clear line between when I am working and when I am free. A lot of work is done over the phone. If a customer complaint escalation happens just before you are going to bed, you can’t shrug it off saying ‘this is family time’. It is good and bad, but that is the way it is.
My life has certainly changed from what it was in the small town in Bhopal. I don’t play hockey any more, instead I have taken to tennis. My only regret is that I was so engrossed in setting up the business those days that I couldn’t give enough attention to my first daughter during her early years. Now when I find myself spending much more time with my younger one I realise I didn’t have that sort of moments with my elder daughter. I see how much I missed out while she was growing up and what I couldn’t give her during those years. So now I am trying to participate more in her school functions and projects. I hope I will be able to make it up to her someday.
These days I consciously try to spend more time with my kids, going out for movies and travelling on holidays. Thankfully, I don’t have to visit the grocery store as often. We order two to three to four times a day online! Though, I have to admit, there are times I need to step out to get them… What do you do when you need something in five minutes!
All I wanted was 5,000 customers purchasing groceries for 5,000 each, every month, when I started off. Today we have one million customers, with an average monthly shopping bill of 3,000. It is satisfying to see how far we have come.
For now, things are looking good. We are among the top five grocery retailers of the country. IIM-Ahmedabad, couple of years ago, honoured me with Young Achievers Award, and we just did our fourth shoot with Shahrukh Khan last week. This has been my longest stint at any company, for almost nine years now. That’s a large part of my life, so the business has become sort of my baby.
My other babies, my daughters, take pride in what I do. My wife too, but she prefers to “mind her own business”. She might start that Montessori school she always wanted to. We all have to follow our own dreams, don’t we?
This is part 2 of a two-part series. You can read Part 1 here.