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Big Basket SWOT Analysis

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Published: 2020-12-03

Big Basket is the largest online grocery and grocery store in the country. They offer products from a wide variety of categories including vegetables and fruits, beverages, dairy products, rice and dal, condiments, meats, packaged foods, and personal care products.

Strengths in Big Basket's SWOT analysis:

  1. Product range: Big Basket offers a huge range of products spanning around 18,000 products.
  2. Exotic Range: It also features exotic fruits, vegetables, and imported foods that are not easily available in nearby retail stores. This gives them an advantage in catering to customers who like to buy such things.
  3. Discounts: Big Basket offers huge discounts on various products. They also have the product bundling technique to maximize sales and provide maximum discounts to customers. This makes them a lucrative purchase option for customers.
  4. Comfort: Big Basket offers an escape from the hassle of waiting in line at shopping malls or walking to the retail stores. They give the products right on the doorstep and offer multiple payment options. The punctual delivery guarantee makes them a lucrative option. Customers, especially in large cities where life is very fast and it is difficult to reach customers, can shop at any time of the day.
  5. Target group: They have chosen their target customers very carefully and have established themselves in the metropolis and some Tier I cities. They operate in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Mysore, Vadodara, Patna, Indore, Vijaywada, etc. They currently operate in around 25 cities.
  6. Business model with low fixed costs: Most of the items Big Basket sells are perishable and therefore depend on the retail stores they coordinate the products with. This means that they have no storage costs and make their business model more profitable.
Also read Good Day's SWOT analysis

Weakness in Big Basket's SWOT analysis:

  1. Delivery time: Big Basket delivers the groceries the next day. Many retailers have started delivering home deliveries to nearby companies and customers in minutes to hours. Customers prefer to do this instead of waiting 24 hours.
  2. High variable costs: The Costs of operating many delivery people, vans, storing perishable items, and wasting them in transit result in high variable costs. They have to bleed more money and take longer to break even.
  3. Minimum order quantity / price obligation: Big Basket does not offer home delivery below a certain set order price limit. This means customers would be forced to add a product or two in order to avail of the service. In doing so, they lose a customer.
  4. Be at home: Customers have to be at home when Big Basket wants to deliver. This means that customers have to plan according to the delivery time. If the order is delayed in any way, the service will make the customer angry and unhappy. In addition, they have to pay a small surcharge for home delivery.
  5. Order cancellations: They depend on the stores they are associated with to provide them with the items. If they don't have the items, they can't deliver them. This sometimes leads to the cancellation of orders. Out of stock problems tend to make customers unhappy, and the repetition of such problems makes customers reluctant to reuse the service.

Opportunities in Big Basket's SWOT analysis:

  1. Market: The Indian retail market is worth more than around 550 million US dollars and groceries cover 60% of this share. So it's a huge market with lots of players and customers.
  2. Food growth: India is that sixth largest Food market in the world. The e-commerce grocery market is growing at a rate of 19% year over year.
  3. Expansion: Many cities are still not affected by these startups, and Big Basket can target them and gain the advantage of being a first mover. They can expand into tier 2 cities and expand their market.
  4. Cross-selling and value packaging - Cross-selling is a great advantage for Big Basket as it can sell multiple products by bundling them together.
Also read Tissot's SWOT analysis

Threats in Big Basket's SWOT analysis:

  1. Competition: It has a low presence in terms of the cities it covers, so it is highly competitive by other startups like Grofers, PepperTap, Nature's Basket, Zop Now, Aaram Shop, Mera Grocer, etc.
  2. Bigger ones actors : Larger players in terms of financial support and presence are also entering this lucrative industry. Players like Amazon, Flipkart, and Google have also stepped into this industry. This can prove fatal for smaller players like Big Basket to compete with them.
  3. Smaller players: Many other localized stores have picked up on this trend and launched the home delivery service for nearby customers, killing groups of target customers in different regions and cities.
  4. Customer loyalty : It is very difficult to retain customers. They tend to switch with the service provider that offers the most discounts.