Q-comm brewing: Tata Group brands gear up to strengthen BigBasket’s BB Now

As Indian consumers increasingly rely on quick commerce platforms, major Tata Group brands are gearing up to partner with the company's 10-minute delivery service, BB Now. Notably, Tata-owned BigBasket's quick delivery division has been operational for approximately 2.5 years, but it was only in the past year that the company shifted its focus from slotted deliveries to quick delivery as part of a major overhaul of the brand.

According to Raagleena Sripada, Head of Marketing at BB Retail, a plethora of Tata-owned companies have intended to join BB Now vertical. "In the next six months, there will be a lot of collaboration with big brands," Sripada added.

Notably, BigBasket partnered with Tata-owned jewellery brand Tanishq during Akshaya Tritiya this year. And, this month, the salt-to-software conglomerate's coffee chain Starbucks launched a pilot direct delivery via its mobile application.

Storyboard18 reached out to Tanishq and Starbucks but they declined to comment.

According to the senior vice president at Elara Capital Plc, Karan Taurani, quick commerce is a high-growth engine, with the segment growing by 60-80 percent over the medium term over the next three years. He said, "What started off with grocery in 10 minutes about two years back, now includes beauty personal care, gifting, pet care, food, mobile phones, gadgets, etc".

Taurani mentioned that while Starbucks might venture into the quick commerce space, it’s unlikely to offer a 10-minute coffee delivery service. Instead, the focus would be on selling gift items and accessories, such as coffee pouches and mugs. He further added, "It makes sense for Tanishq to sell gold coins and for Starbucks to offer coffee products and gift articles."

Last month, BigBasket pivoted to a 10-minute delivery segment by tying up with Croma Electronics (Tata Group's gadgets brand) to deliver the iPhone 16 models to customers within 10 minutes.

'Marketing moves'

BigBasket is not only planning to collaborate with brands for its BB Now vertical but has also intensified its marketing efforts. Sripada told Storyboard18, "It was a strategic decision of the company to remain quiet over the past two years. Now, as we are make a massive switch from slotted deliveries to a quick commerce segment, marketing has become crucial".

The online grocery-to-gadgets delivery platform has allocated 60 percent for performance marketing and 40 percent for the brand-building campaign. Sripada said that the mainland agency of BigBasket is Pentagon Communications but the brand also works with other outdoor agencies depending on the need and campaign.

On influencer marketing for BB Now vertical, Sripada said BigBasket has signed a strategic partnership with Kusha Kapila, Gaurav Kapoor, and Danish Sait. She said, "When influencers are used correctly and in line with the brand's voice, it does have a good payoff".

'Business expansion'

The company is eyeing to expand the quick commerce segment in tier-3 cities. So far, BigBasket's 10-minute delivery services are available in tier-1 cities and a few tier-2 cities.

"Switching to quick commerce vertical across 200 cities will take time but we are moving quickly. Our focus will be to cover a maximum of the city with 10-minute delivery to ensure at least 80-90 percent of the city is covered," Sripada added, "BigBasket is ramping up to add around 100 dark stores in a year to meet the requirement". Currently, BBNow has 400 dark stores in 35 cities. BigBasket's plan is to link clusters of dark stores with these warehouses to streamline the delivery of both popular grocery items and non-grocery products.

BigBasket's consolidated net loss narrowed by 21% to Rs 1,415 crore in the fiscal year 2023-24. The Tata-owner platform's losses were Rs 1,785.4 crore in FY2023.

According to the data sourced by data intelligence platform Tracxn, the revenue of BigBasket has scaled up by 6 percent to Rs 10,099 crore in FY24 as against Rs 9,499 crore in FY23.

The consolidated expenditure of the company has witnessed a marginal rise to Rs 11,515 crore in FY24 while the return on equity declined by 161 percent in the same fiscal year.

Founded in 2011, Tata acquired BigBasket in 2021 for $1.14 billion. According to Tracxn data, the online retailer has raised $942 million in more than 20 rounds.