Big Basket to strengthen private brands: Hari Menon

On the back of hyperlocal online grocery stores such as

Peppertap

and

Localbanya

shutting down or scaling down operations, four and half year old

Big Basket

, has begun deliveries to hotel, restaurant and catering segment. Hari Menon, CEO, speaks to TOI on breaking even, deepening the reach in existing cities, expanding its customer base and strengthening their private brands’ portfolio.
Q: Could you explain the reason behind your recent move to sell your private brands in the

B2B segment

?

A: Our private brands form 33% of our total sale. We sell under the Fresho for fruits and vegetables, Happy Chef for the ready to cook, gourmet segment, Royal and Popular for staples and recently, under the Tasties brand – where we sell coffee and snacks. Selling in the B2B segment – namely 1000 Kirana stores and hospitality, catering centres and hotels, will fetch greater attention and we can get better returns and private brands would contribute to 40% of our business. Although I cannot mention the names at this moment, we have signed some marquee clients. At this rate, we can break even (operational costs) for all the 8 states by February 2017 and clock a revenue of Rs 1700 cr – Rs 2000 cr. B2B, which is contributing to 15% of the total sale, would go on to contribute 30% at the end of this fiscal.

Q: Why this move to strengthen private brands, when you follow a marketplace model?

A: Brands have always had a good recall among customers and this would help improve our sale. Also, we get higher margins from them. In another 18 to 24 months, private brands would contribute 40% of our total sale.

Q: Going by your customer sentiments, is there any particular category of product that you would focus on?
A: We look to introduce more gourmet products in our private brand Happy Chef, as a chunk of our customers are from the upper middle income categories, who take a liking to them. We would also introduce organic products. Some farmers do not cultivate organic crops since they feel the market is not strong, we plan to ramp up the segment and create new markets.
Q: Any new product offerings?
A: One category that we plan to introduce is called ‘place of origin’. The products for customers living in other cities who would want to have their native food items. We are building the technology for the same and awaiting GST, as this will involve an increase in logistics cost. In the non-food category, we plan to introduce wipes. We are hopeful to expand our customer base of 2 million to 10 million.

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