SWOT Analysis of Big Basket

Big Basket is the largest online food and grocery store of the country. They offer products from a wide range of categories that includes Vegetables and Fruits, beverage, dairy products, Rice and Dal, Spices, Meat, Packaged foods and Personal Care products.

Table of Contents

Strengths in the SWOT Analysis of Big Basket :

Product Range: Big Basket offers a huge range of products which stretches to about 18000 products.
Exotic Range: It also offers exotic fruits, vegetables and imported groceries which are not easily available in nearby retail outlets. This gives them an edge in catering to customers who like buying such stuff.
Discounts: Big Basket offers huge discounts on various products. They also have the product bundling technique to maximise sales and offering maximum discounts to the customers. This makes them a lucrative option for customers to buy.
Convenience: Big Basket offers an escape from the hassle of standing in the queues of malls or going all the way to the retail stores. They give the products right at the door step and offer multiple payment options. The on-time delivery guarantee makes them a lucrative option, Customers, especially in big cities where life is very fast and it is difficult to reach thThe customers, can shop at any time of the day.
Target Group: They have selected their target customers very carefully and have established a footing in the metropolitan and some tier-I cities. They operate in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Mysore, Vadodara, Patna, Indore, Vijaywada, etc. They are currently operational in about 25 cities.
Low Fixed Cost business model: Most of the items that Big Basket offers are perishable hence they depend on the retail stores they are coordinating with for the products. This means they have no inventory cost and makes their business model more profitable.

Weakness in the SWOT Analysis of Big Basket :

Delivery Time: Big Basket delivers the groceries the next day. Many retailers have started the facility of home delivery to nearby societies and customers in just few minutes to hours. So customers prefer this instead of waiting for 24 hours.
High Variable Cost: Cost of running many delivery guys, delivery trucks, storage for perishable items, wastage during transportation makes the business run at a high variable cost. They have to bleed more money and will take longer to break even.
Minimum order quantity/price compulsion: Big Basket does not offer home-delivery below a certain set order price limit. This means that customers would be forced to add a product or two just to avail the service. This makes them lose a customers.
Be at home: Customers have to be at home when Big Basket is about to deliver. This means the customers have to plan according to the delivery time. If by some means the order gets delayed customer gets angry and unhappy by the service. On top of this they have to pay a little add on price for the home delivery.
Order Cancellations: They depend on stores that they have tied-up with to provide them the items. If they do not have the items available they won’t be able to deliver them. This sometimes tend in cancellation of orders. Out of stock issues tend to make the customers unhappy and repetitive of such issues makes the customers reluctant to reuse the service.

Opportunities in the SWOT Analysis of Big Basket :

Market: Indian retail market is valued at more than approx. $550 million and grocery alone covers 60% of this share. Hence it’s a huge market with many players to accommodate and customers to cater.
Grocery Growth: India is the 6^th largest grocery market in the world. E-commerce grocery market is growing with a year on year growth rate of 19%.
Expansion: Many cities are still not covered by these startups and Big Basket can target them and gain the first movers advantage. They can expand to tier-2 cities and increase their market.
Cross selling and Value Packaging – Cross selling is a major advantage for Big basket as it can sell multiple products by product bundling.

Threats in the SWOT Analysis of Big Basket :

Competition: It has small presence in terms of cities covered hence, it is getting a huge competition from other startups like Grofers, PepperTap, Nature’s Basket, Zop Now, Aaram Shop, Mera Grocer, etc.
Bigger Players: Bigger players in terms of financial backing and presence are also entering this lucrative industry. Players like Amazon, Flipkart and Google have also entered this industry. This may prove fatal for smaller players like Big Basket to compete with them.
Smaller Players: Many other localized shops have picked up on this trend and have started home delivery service to nearby customers thereby killing groups of target customers across regions and cities.
Customer Retention: It is very difficult to retain customers. They would tend to move with the service provider that offers the most discounts.