Daybreak - Hari Menon has to save Bigbasket from itself

Episode Date: March 26, 2025

In January this year, nearly every single employee of the OG E-grocer Big Basket received an email from their CEO, Hari Menon. It was supposed to be a rallying cry. The Tata-owned e-grocery giant had finally—after much hemming and hawing—embraced quick commerce.For a long time, Bigbasket didn’t care much for quick commerce. Menon himself dismissed it in April 2023 as unnecessary and “thrust upon” consumers.But now the Tata board has had enough. Quick commerce isn’t just a fad anymore, it is the industry. Which is why, the pressure is on for Big Basket to make up for lost time and get back on the right track. And that’s going to take a whole lot more than just an email. Tune in. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories. 

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In January, nearly every single employee of the OGE Grocer Big Basket received an email from their CEO, Harry Menon. And this wasn't your typical start of the email. It was kind of a rally cry, like, you know, to ensure all the Big Basket employees were on the same page. they all knew they had to work much harder going forward. That's my colleague Nuha Bubei. Just a couple weeks ago,

Nuha spoke to multiple employees at the Tata-owned E-c grocer, one of whom was Hari Meenan himself. You see, this particular email landed in their inboxes at somewhat of a turning point in the Big Basket story. When they read that email, it was like, Harry was kind of promising to the relevant stakeholders that going forward, like, you know, they had to do much better.

that they had to go through certain challenges to ensure Big Basket could quickly become, say, the number two in Quick Commerce. There's a reason the CEO of a company that practically created the online grocery segment here in India would settle for being second best. In many ways, it comes from a place of self-awareness because Big Basket is very late to the Quick Commerce game. I think even until the end of last year, Big Basket wasn't fully committed to the quick commerce model.

They waited a long time. They vehemently believed that quick commerce is a fad. It will go away. Who wants everything delivered to you in 10, 15 minutes? But they were proved wrong and badly. So while its biggest competitors, Blinket, Instamart and Zepto kept raising the stakes, slashing delivery times down to 10 minutes and less, expanding categories like never before,

big basket chose to take the high road. It's stuck to delivering products in 30 minutes to an hour. Now, it has realized that this approach just won't work anymore. It knows it can't just treat quick commerce like a side gig. But up until it reached that point, Harry Mennon did have his reasons for steering clear of the whole thing. They wanted to be in the slaughter delivery business because that was the most profitable endeavor for them.

And they wanted to continue doing that. When I spoke with Harry, he mentioned like, you know, it is not easy to leave a path which has been profitable for you for like a long period and just jump on the bandwagon because you see like you know everyone talking about it. It's a very tough decision to make and I think that's what hurt Big Basket in the end. The lack of conviction like you know to believe that they can move to a different model and still try to be relevant for their customers. That's where they lost their audience.

While Big Basket took its time, Blinket, Instamart and Zepto raced ahead and grabbed hold of as much market share as they could. In the end, Big Basket was left with just 9%. But now the Tata board has had enough. Quick Commerce isn't just a fad anymore, it is the industry. Which is why the pressure is on for Big Basket to make up for lost time and get back on the right track. And that's going to take a whole lot more than,

in just an email. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahil Filippos and I don't chase the news cycle. Instead, every day of the week, my colleagues Nikda Sharma and I come to you with one business story that is worth understanding and worth your time. Today is Thursday, the 27th of March. If you opened the Big Basket app about 18 months ago, you would see two doors, BB daily for two-hour deliveries and BB now for faster orders.

But when the company decided to go all out with quick, commerce last year, they knew they would have to change up that strategy. Hari told me they realized very quickly that consumers do not want to bear that burden when they open the app of choosing which door to open. So they took out the door itself and then in the transition period, they decided that the default location which the app will open into is the quick commerce mode, which is basically BB now. And then later on, if you want, to choose like, you know, the slaughter delivery option, it is available at the checkout stage. So like, you know, their consumers can decide, oh, maybe I don't want this item immediately.

I can still have it, like, say, in an hour or two. Okay, Noha, that's a full U-turn from Big Basket's original model, right? Why do you think it took its time to kind of get to this point? Despite all the success that Swiggy Instamart, Blinkets, Zepto had already seen in the last few years? I think it was very different. to convince the leadership at Big Basket and by extension, like, you know, the Tata leadership as well, to embrace quick commerce completely. Not all the stakeholders were on board that, like, you know, we have to move through that model. Is it very necessary? They realized very late

that they should have embraced it earlier. And I think around the end of last year is when they chose to like, you know, go full on into that mode. Right. It's interesting that you mentioned Tata leadership. I mean, at the end of the day, the Tata brand is known for being obsessed with doing things, you know, quote unquote, the right way. I suppose to some degree that does explain why Big Basket would have been so cautious, right, to enter that 10-minute delivery space.

Even though now, of course, it is really bearing the brunt of that decision. That's very true. when we look at Big Basket, it is one company which, like, you know, when they acquired it earlier, it very much fit into the Tata ecosystem because Big Basket is the kind of company that works very similar to how a Tata company works. Like, you know, it takes its time, it doesn't brush into things. And like, you know, the growth is profitable, slow, gradual. And, like, you know, there's a lot of trust there. And that's how Big Basket has always functioned.

You cannot change the DNA of a company just because, like, you know, you see other companies eating away your market share. That's one thing they struggle with, and that's what we see with Big Basket as well. Even Tata's other companies, like, you know, we have seen Tata knew their very big bet on a super app in India, did not work at all. But they wanted to combine all the brands under the Tata umbrella into one platform. and even that was a very, they took a lot of time, very slow in building that as well, and they lost any kind of excitement, any kind of curiosity, anyone even wanting that product in the end. That's what we're seeing happening to Big Basket now as well. The Tata group is known for its rigid principles.

The quick commerce business, like most things, has its grey areas. Delivery times, for instance, most platforms tend to fudge them just a little bit, but Big Basket doesn't. For instance, one manager Noha spoke to told her that at Big Basket, the founders insist on 80% delivery time adherence, while everyone else in the industry runs at 50%. Even seemingly minor details become points of contention, like Ulu bikes. I'm sure you would have seen delivery drivers whizzing around on them.

They're very convenient because they don't require a driver's license. But at Big Basket, leadership sees exactly that as a problem. When it comes to 10-minute deliveries, there's some history there as well. You see, Big Basket was burnt before when it tried 90-minute deliveries about seven years ago. Back then, there weren't really a lot of takers for the service. So, naturally, Menon and all the other top execs at Big Basket and Tata weren't entirely sold on 10-minute deliveries either. Harry Menon told Noohar that there wasn't really a sense of urgency to dive headfirst into QuickComers then.

It sort of felt like a good to have rather than a can't live without. So, Big Basket clung to slotted deliveries. For years, even after it introduced 15 to 30 minute delivery, slotted remained the mainstay. But now that has changed. The company has a very ambitious plan to catch up with the other players in the 10-minute delivery race. And the obvious first step is to expand its dark store infrastructure. They've given themselves a pretty ambitious six-month.

timeline to do it. The current number that they have is around 400. They want to increase that to around 578 dark stores and also sized larger than their usual dark store. So the usual dark store is around, I think, 2,000 to 2,500 square feet. They want to take it up to 5,000 square feet and the SKU count also to around 20,000. That's the plan. And they also want to like have more dark stores in tier two where they already have some bit of an audience and they want to like you know leverage that as well to add them um also to their uh roster right but to what end right noha i mean if you're looking at the quick commerce landscape today each major player has some sort of a role to play right so for instance zepto gives you the best prices or blinket has managed to ace both speed

and variety where does big basket hope to fit into all of that? Looking at their strategy, looking at what they are doing, even on their app, even like, you know, in their communication, they just keep trying to leverage the Tata ecosystem and just keep trying to ensure people like, you know, about their customer service. They have been impeccable in that. They always want to stand by the TATA set of values and principles. They don't want to give that away. But in terms of where they stand as compared to. competition, they're in a limbo. I don't think I can fit it into any box because they themselves are unable to, like, you know, themselves figure it out where they want to be for a long period. They wanted to be enslaughted. Now they are in the quick commerce side of things.

Do they give products fast? Yes, but do they give it faster than blinket? Debatable. Same thing in terms of affordability. but Bibi has not essentially picked one side on what they want to do. They just want to do things a certain way, which is not exactly how competition does it. Now, the thing is, thriving in the quick commerce space is an expensive affair. Just look at the two biggest players, Blinket and Instamart.

Their losses have only surged in their bid to outspend each other on speed and discounts. And that makes it even more difficult for Big Basket to keep up. Now, there's also a push from the top to be faster. Navine Talyani, the managing director and CEO of Tata Digital is also involved and he is going all out to integrate the four Tata brothers, if I may. 1MG, Chrome, Big Basket and TataClick. Don't forget that Big Basket does have access to a powerhouse ecosystem. And if you open the app, the first thing which you will see is like a lot of the Tata brands

are like just advertised at the very beginning. Like you see Chroma, like, you know, they are delivering through the app now. And it's just right there at the beginning. Then you have Starbucks as well now, which provides you beverages to your location. I think it is right now delivering in Bandoor at least because that's where I'm currently like, you know, based out of.

So I could see a Starbucks, Papachino retailing et cetera, to 50 rupees, which I could buy, but it would take me 30 minutes still. The plan for them is to reduce their time period and Starbucks would essentially become one of their food delivery partners and they would have a kiosk in their dark store itself from where Starbucks can, like, you know, deliver food. But that is for the future. Then they have Tata 1MG. They're essentially bringing all the Tata brands on the platform and advertising and telling people, you can have medicines, you can have electronics, you could have a premium beverage, you could have a premium beverages now on Big Basket.

So they're really leveraging that Tata brand, right, to kind of make up that distance between them and say like an Instamart, a blanket or a Zepto. Correct. That's true. But the problem arises here is like Tata New Tata New Tad try to do the same

thing. Even Tata New has Tata New Flash now, which is their quick commerce service. So if you open Tata New Flash app, you will see the same brand, same applications there. So Big Basket is also available on Tata New Flash. If you open Big Basket, it will, on the Tata New Flash app, it will take you to basically the same Big Basket thing. But it's just integrated on that platform. The thing is that they want to ensure people who come on Big Basket order from

there. And people who come on Tata New Flash also know that they can order anything through Big Basket. But it just is like very confusing right now because Tata New Flash is also quick commerce. Big Basket is also quick commerce. So it's like very hazy as to what they really want to do that. So you're saying that the Tata edge isn't exactly enough? I think it's the same thing as asking does Flipkart have an edge just because they did e-commerce delivery for such a long period? The answer is no. When you look at quick commerce essentially the name which comes first is blanket because first move advantage. I think that's what

helped Flipkart as well right when they first got into e-commerce. So just because they have the e-commerce edge that does not directly translate into them also having a quick commerce edge. It is the same for the Tatas. They have had a great retail presence. Like, you know, look at

Kroma, look at Starbucks, look at the amount of stores, offline stores that they have. But does that translate to like, you know, people actually thinking that they would go on Big Basket and shop a lot? Not necessarily. Multiple senior executives Noha spoke to told her that everyone in the Tata group is quite worried.

That's what happens when you lose ground in your own core business. Perhaps that also explains why the Tata board had asked Big Basket to raise external capital on its own. Folks at Big Basket see it's more of a valuation play, but others are a bit more blunt. At the end of the day, Tata's philosophy is not to invest in perpetually loss-making companies. The problem here is they're not happy with their performance. They know that their performance is lagging. Hari is not happy with this performance. People in Big Basket are feeling the pressure from not just like, you know, their competitors,

but also internally because they have to answer to like, you know, the leadership at like the Tata consumer, Tata digital level as to why they are lagging behind. and the problem is that they were always so ahead in the space, yet they did not see this coming. The fact that they learned about it from a competitor has been the biggest problem that they have faced. Off late, Tata has been tightening its purse strings. In the last fiscal, Tata Sons hit a pause on fresh investments in Tata New,

chroma Tata Click and the rest. By then, the holding company had already sunk an estimated 19,000, crore rupees into Tata digital. So what does that mean for Big Basket? Especially now that it's going all out with quick commerce. How should it look at winning, especially since it's joining a race that is already well underway? Best case scenario, I think the only case scenario right now,

is to maybe market the app in a different way, try to show why they still have it in them to like, you know, beat the likes of Zep. or Blinket, essentially also if you look at the leadership across, right, Harry and Whipple and people add Big Basket, much experienced, much older regimen of people, even at a Tata digital level. And when we look at, say, Zepto or Blinket, much younger leadership, that also translates into how, like, you know, decisions are made,

which we are seeing, like, you know, which we also see in the current landscape, how aggressive Adid Palichya or Dippender, Alvindar are in their approach as to how a Big Basket as to how a Tata is. So winning essentially right now for Big Basket, I don't even know if that is the word you can, like, you know, use, I think surviving, getting up, getting there is what they should focus on rather than thinking that there's a strategy, a full-proof, fail-save strategy that they can like, you know, fall back on. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business

news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippos and edited by Rajiv Sien.