Daybreak - You are a quick commerce company. You have a billion dollars. How do you win?

Episode Date: January 30, 2025

'As the battle for winning 10-minute deliveries heats up, so do the stakes. Pick one of five quick commerce companies. Determine what winning looks like. Write your solution’That was the challenge we threw at some of India’s smartest, most ambitious and creative students from top business schools across the country. In our brand-new mini series 'One Billion in 10 Minutes', you will hear their ambitious and creative pitches – all rooted in the real world and centred around five quick commerce platforms that have completely changed the way we all shop.The six-episode mini series goes live on Monday, February 3. But before that, we thought we would give you a sneak peak here on Daybreak. Check out the first episode of the series, where two teams — Metamorphosis from IIM Ahmedabad and Voldemort from IIMK Kozhikode —  go head to head with their billion dollar strategies for the OG quick commerce platform, Big Basket. 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.We are now on WhatsApp at [phone]. Text us and tell us what you thought of the episode!

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the same. secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they managed to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into.

to the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert, as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcast. or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode.

Hello, dear listeners, today we have an extra special Friday episode of Daybreak for you. As most of you who listen to us regularly know, we at the Ken have been closely tracking the evolution of India's quick commerce space for a while now. And it won't be a stretch to say that it is nothing like the world has ever seen before. It's got all the elements of a great story. Super exciting, full of new ideas and ups and downs and basically packed with drama. Now, I'm not going to give too much away, but Rahal, my co-host, along with my colleagues

Nuha and Praveen, have been working day and night, I kid you not, to bring you a thrilling limited series on QuickCommerce in India. What you will hear next is the first of the six-part series. that'll actually drop on Monday, but we wanted to give our lovely daybreak listeners an early preview. So keep an eye on the Ken app on Monday. And without further ado, here is Rahil with the first episode of $1 billion in 10 minutes. Very good morning, everyone. We are team atomorphists from I'm Ahmedabad, and we are here to present our gold ideas and actionable strategies to redefine the quick commerce playbook of Big Basket.

Let's dive in. Now, there's something you don't hear every day. Unless you are at a B-school or have been to one, case competitions are probably new to you. For the uninitiated, the rules are simple. You get a case, which you can think of sort of like a problem, and you find the best, most creative business solution for it. That's exactly what team metamorphists from IIMM-Dabar was trying to do a couple weeks ago at the Ken's first-ever case competition,

organized in partnership with Zerodha. Our bold strategy is primarily category play of high margin, quick commerce-friendly categories by leveraging Tata's ecosystem thereby driving sustained growth and ensuring long-term market leadership. Now, you're probably wondering what problem they were trying to solve.

All case competitions start with a problem statement, and this was ours. In three sentences, the challenge before you is, number one, you're a quick commerce company, number two, you have $1 billion. Number three, how will you win? That's it. We won't even tell you what winning looks like.

That's up to you. If this sounds uncomfortably fuzzy, that's intentional. The purpose of a great strategy case is to create a scenario that most closely replicates what's happening in the real world. That was Praveen Gopal-Khrushnan. He's the author of the Ken's weekly newsletter, Nartreaf. And in his spare time, he also moonlights as the Ken's chief operating officer. We call him PGK here at the Ken's.

newsroom and if you stick around you are going to be hearing a lot of him. So the thing is I always think in terms of story. Like it's one of the things of the Ken. So I always see this as here are the stakes. The stakes are really high, right? The resources are interesting. There is a billion dollars in the table. And there are five characters. And each character has their own desire, their own fears, their own wants and their own needs and most importantly their own beliefs and journey. And so that is the heart of it. We got close to 100 submissions from across India's top business schools.

That's close to 100 strategies for real world quick commerce companies using a billion dollars. Our in-house team headed by PGK shortlisted the top 10 teams and they went on to present their strategies at a virtual event last month. True to the QuickCommerce theme, each pitch was exactly 10 minutes long. One team ultimately won the competition and a 10 lakh rupee price. So 10 teams, 10 minutes, 10 lakh rupees. Over the next six episodes, you will hear their ambitious and creative pitches, all rooted in the real world and all centered around five QuickCommerce platforms

that have completely changed the way we all shop. Big Basket, Swiggy Instamart, Blinket, Zepto and Flipkart minutes. You hear two pitches in every episode and right at the end, we tell you which of the two teams made it to the top five. Only one strategy can win. I'm Rahil and this is $1 billion in 10 minutes. Let's get into it. We are kicking things off with the two teams that chose Big Basket.

You already heard team metamorphosis. they want to expand the kind of categories available on Big Basket by leveraging the Tata ecosystem. Here's what their opponent's team, Waldemort from IIM CoriCode had to say. Big Basket can win by leveraging the Tata brand to collaborate with Kirana partners in a cost-efficient manner. What winning means to us, in one sentence, we'll play the bleeding game, will bleeding slower and capture the market share. This we will do by optimizing our operations, ensuring low-capital investment, while ensuring a great-cassence. customer experience. So, both teams want to leverage Tata, but in entirely different ways.

On one hand, you have metamorphosis that wants to make the most of the whole Tata ecosystem. They're not just thinking about groceries, they are thinking beyond that. And then you have Team Waldermott. They are trying to pull off something that many have attempted and failed at, partnering up with Kirana stores. But before we get into their strategies, we need to understand where things stand for Big Basket today. Because yes, both strategies have to be ambitious and creative, but they also have to be reflective of Big Basket as it is today. So, Big Basket, in a way, is an enigma.

That's the Ken reporter Noha Bovey. She covers quick commerce and has written extensively about the Big Basket story. Now, one thing you need to know, Big Basket is the OGEe grocer. When it was launched back in 2011, ordering groceries online was pretty uncommon. So it was the first in the business to actually make it happen. But then somewhere down the line, it lost its way. Before Tata Digital acquired it in 2021, it was in a space where it was very unsure of what it wanted to do.

Then for a long time, Big Basket had the highest market share in terms of grocery. And I think it in a way took it for granted and held on to the idea that, you know, things were going to be the same. But things were anything but the same. Because once the likes of Blinket and Instamart enter the picture, the bar for grocery delivery only got higher and people's patience only became shorter. 15-minute deliveries, 10-minute deliveries, even 5-minute deliveries. Every new entrant undercut the others delivery time and Big Basket just could not keep up.

That really impacted and kind of made Big Basket an out-of-fashioned platform where it was struggling to hold on to the consumers it had and it started losing market share in that way. But Big Basket has one trump card that no other platform has. It's why both metamorphosis and Waldemort picked it in the first place. Tata. Their reliability factor was further enhanced by the Tata acquisition. Once that came into the picture and they announced that they want to move towards

quick commerce as a model completely. So it really changed the way. people are looking at the platform today. Maybe it is still too late in the game, but they do have the Tata backing and their muscle to power through. But apart from that, I also feel there's scope to do innovation here. Like just look at the landscape. Blinket and Zepto have been very aggressive from the start,

and they have kind of pioneered themselves as someone open to taking a risk. If I look at an Instamart or even, especially a big basket, they have been functioning in a way like some Sarkari worker, Like, you know, they have a to-do list and they're going to just, like, do that every day and go home and, like, you know, continue day and day out. But if, like, you have $1 billion and, like, you know, you have been given the platform to, like, go all out and do anything and everything, I think Big Basket is one platform where you can really surprise the consumer with how you want to innovate. And surprised they did.

I spoke to both teams in the run-up to their big presentations. Remember, this is a case competition rooted. in the real world. So it was important for our participants to think about the context that their company existed in. How did they do it? What does winning look like to them?

Does Big Basket really stand a chance? Here's what they had to say. So basically for QuickCommerce, we have thought of a category expansion strategy because we felt that category expansion is the way to go for Quick Commerce in the future for it to be sustainable in the future as well in the profitability arena.

First up is team metamorphosis. You just heard Krishna Pradeep. Pradip and his two teammates, Saicharan and Gaurav are case comp veterans. They've done a few together as a team as well. Yeah, we did four other corporate case competitions. You know, we made it to the finals. We have a 100% strike rate till now. The team also very candidly admitted that their schedules had freed up a fair bit recently.

And all the three of us also have written offers. we have PTOs from our summer into Jeefroons. So we also had time on our hands. And when we saw this case competition that actually came up, we thought that this seemed unique. I mean, something that Ken has come up with, it is unique in its nature, in its very nature. I wanted to understand their strategy in their own words.

No business speak, no buzzwords. So I asked them to explain it to me like they would to a friend or a relative who doesn't necessarily have an MBA. And they very kindly complied. So our solution is focused on 3K areas. So firstly, it was introducing private label beel kits, which actually leverages on Big Basket strong brand and fresh produce while offering customers convenient and high quality meal solutions.

The second one that we thought of was expanding into healthcare delivery, which encompasses medicines, diagnostics and even ambulance services. So actually we proposed this three blanket because we thought of it as capitalizing on Tata 1MG's e-farmar leadership and enabling 10 minute delivery. And the last one, which we thought was the most ambitious one, we proposed introducing in-house professional services for urban needs. So because we believe that for big commerce model with its instant availability and focus on quick fixes, this will revolutionize the urban services market, thus making this highly appealing to the network vendors.

The reason they picked Big Basket was because of trust and credibility. That, according to Pradeep, was an edge that no other platform had. Like I said, we thought about category expansion as a way forward for quick commerce. And we thought someone who actually expands into categories needs trust, trust and credibility behind the branding. And we knew that Big Basket already had this many private labels with them. So with that they were actually showcasing trust and credibility. So with the new services as well under Big Basket's own banner, we know that the trust and credibility can be something that can be achieved. So the first part of their three-part strategy is meal kits.

You get pre-portion ingredients or, you get pre-portion ingredients or, you know that's a good idea. All the prep work will be done by them, they'll give you a recipe, and then all you have to do is assemble and cook. That works because it ties into Big Basket's identity as a grocer in the conventional sense. Again, this is a platform known for its fresh ingredients. Then the second part of their strategy is Big Basket's entry into Farmer, something that multiple platforms have been trying to do at the moment. Some like FlipCart Minutes of course have even managed to do it. But the advantage that Big Basket has is Tata 1MG, like Frum. Pradeep mentioned. Now, the third part of their strategy is really interesting. It's urban services.

So you can get a plumber, an electrician, carpenter, barber, cook all within minutes. They call it BB quick serve and the logistics of it would make most people's heads win. But they see a huge opportunity here. So, urban services was something we thought of after identifying gap in the market. Firstly, like, urban services market is expected to grow very representative. like 20-25% caggar. And then second thing is whatever urban services are present right now are like slotted deliveries.

But how do you get service providers on demand? Well, they suggest having them sit at dark stores ready to reach a consumer's home within minutes. That may seem like a crazy idea to you. But crazy ideas are something that Gaurav and

Saicharan excel at by their own admission. Like I and Cherin are the ones who used to come up with a load of ideas. Sometimes as gibberish as providing 10 minute take-off vitals which can take you from one place to another so you can skip Bangalore traffic. That was something we also thought of. But then Pradip was the one who was the sort of realistic one. Like guys, let's calm down. Pradeep may be the skeptic of the group but the one thing they all agree on is that Big Basket has tremendous potential for innovation.

Interesting fact, actually, we actually picked our name as Metamorphus, is signifying Big Baskets journey. So they started off in 2013 as a grossity player. They reinvented themselves. So Metamorphus is something where to do two to three

transformations to actually come into a big majestic butterfly. So we thought Big Basket is on the cusp of it. For us at least, it felt like it was on the cusp of something there. Team Waldemort shares that belief, although they got a fair bit of flag for their choice of name.

You've seen one Big Basket team. This is the other big basket team. It's a team called Voldemort. I don't know why they picked the nick, but anyway. Hi. So, this is the team from IIM Corikod. Prachi, Nisarg and Kusagra. The three of them first worked together on an economics project.

And after that, there was no looking back. They had what Kushagra calls that synergy. Prachi is the ideal kid. The one that you want foreign studies. Like she scored full marks in the finance victim. I mean, the average score of the class was less than 50% and she scored full. Even the professor workshop, how is this happening? Then comes Neserk.

Like he has a stellar background. I mean, IAT Bombay, then EY consultant, then BCG, all of it. So, academically very stellar. And he has solution to each and every problem. And for me, I can just make best out of what limited resources I have. so indexed in something, Chicago. The three of them wanted to come up with a solution that was sustainable, long-term and unique to India.

They wanted to figure out how to cater to a customer that is price-sensitive but wants value. That's the typical Indian customer that we cater to. And then we chose the company as big basket because they were the leader in providing availability and pricing, but they lacked the delivery speed. Their solution? Kirana partnerships. Many have tried, but most have failed. Apart from the general lack of

infrastructure at most Kiranhas, the other big issue is that Kiranhas generally resent quick commerce platforms. I mean, why wouldn't they? They pose the biggest existential threat to Kiranhas. So in our strategy, we have ensured that the retailers and the Kiranastros also get some value proposition. They get a product at a cheaper price, as long as they continue to work with the model, they update the inventory regularly. And we have also ensured that we don't need the exact inventory number that retailers has. We can work with multiple retailers and we can ensure that any one of them can provide a product. So there is a less chance of failing and there is a less chance that the retailer has to update inventory at least 10 times a day. He can do that

two times a day, one time a day. And he gets a value proposition where he gets a cheaper product than a wholesaler. By partnering with Kirana's, Team Waldemort believes Big Basket will be able to make significant inroads into Tier 2, Tier 3 India, as well as a bunch of tourist cities. It'll also take the pressure off

of setting up more and more dark stores. So, we studied about dark stores. What is their initial cost? What is their operations? And when we did all the feasibility analysis, we did some secondary data research, we got to know that, Each black store costed around $90,000 to $100,000 per black store.

And that covers roughly an area of 2 kilometers to serve a product, delivered product in 10 minutes. So we think that how do we replace it? How do we make it more cost efficient for tier two cities to it be feasible? So we then started searching what can be a dark store alternative. And ultimately we broke it down to camera stores, that we can have multiple canals stores in same area with minimal cost. Waldemort also says that their strategy is future proof.

Let me explain. So, considering the existential threat that Kirana stores face because of quick commerce, the team assumed that there will come a time when the government gets involved. When some sort of legislation is imposed, that could really throw a spanner in the works for most quick commerce platforms. But not big basket, of course, because by then, it would have already tied up with Kiranhas. Apart from it, Kirana stores being, like, they are already a challenge. We just have to integrate Tim.

They are the oldest form of retailers in Indian markets. So why not do something with them? So this was our whole idea. On one hand, we have metamorphosis with its three-pronged strategy, meal kits, pharma and urban services. On the other, we have Waldemort with one goal and one goal only, Kirana partnerships. So which team wins? I think Voldemort said, oh, we are picking Big Basket,

and their awareness of Big Basket relative strength over its competitors was restricted to... Well, we are connected to Tata. Tata is the most trusted band in India. And hence, we will work with Kiraana and that is what will give us some success. It's not like... By the way, it's not like they said this very strongly.

It was almost like bullet point five, which is, we're going to work with Kirana stores and it's going to work because A, B, C, D and oh, by the way, we are also... Tata and Tata is trusted. Okay, fair. I mean, they said it, but they didn't make it central, right? I think, so you could argue, did you look at them and say,

do they really understand the strengths of Big Basket and what makes it powerful and unique? Not so sure. I feel what Metamorphosis did better was metamorphosis just leaned into what Big Basket strengths was. I think they had a much greater awareness of the company they picked. Right? I feel like. Team Metamorphosis did a much better job with the narrative. Their narrative was very sharp. It was very memorable.

And I think that made a big difference. That was PGK again. And if he didn't give it away already, team Metamorphosis won this round. So this is our first team in the top five and it is one step closer to the 10-lap-Rupie price. Next up is Swiggy Instamart. Thank you for listening to 1 billion in 10 minutes,

a six-part mini-series based on the Ken's first-ever case competition organized in association with Zerodha. This episode was produced by me, Rahal Philipos and Nooha Boberi. It was edited by Rajiv Sien. Don't forget to like and share this episode, and you can also write to me at Rahil Adderate the-ken.com. Let me know your thoughts on this podcast and also which pitch you thought was stronger.