The country's top online grocer BigBasket.com is partnering speciality third party stores, going closer to consumers home and moving in to kirana stores with its own private label as it takes the competition right back to hyperlocal startup peers.
Many of the hyperlocal startups such as Peppertap and the most funded of the lot- Grofers, have an asset light business model where they provide an online platform for ordering grocery and food products from neighbourhood stores.
BigBasket follows an inventory based model where it buys the products in bulk from manufacturers and then allows consumer to buy from its online property.
Hari Menon, co-founder & CEO of BigBasket, told Techcircle.in, "Online grocery is a very complex business in terms of execution and it is best executed through an inventory led model. There is also an element of control across the entire range of value chain."
"In an inventory- and asset-light model, the margins get split further and things like customer-fill rate and quality assurance may go for a hit," he reasoned.
While the heavily funded peers in the business- Grofers raised $165 million across three rounds in 2015 itself- have been making a marketign splash chiipping away at some of the business from BigBasket, they too have faced challenges. Grofers shut shop in around one-in-three cities it operates in.