BigBasket’s B2C arm, Innovative Retail Concepts Private Limited, faced significant challenges in FY23, reporting a notable increase in losses. The company experienced a rise of 89% in losses compared to the previous year, totaling Rs 1,535 crore. Despite generating revenue of Rs 7,434 crore, there was only a modest 4.8% growth from FY22.
Various factors contributed to BigBasket’s losses. Firstly, the company incurred rising costs in areas such as advertising, employee expenses, and logistics. BigBasket has been actively investing in marketing efforts to expand its customer base, but these investments have not yet yielded substantial revenue growth.
Additionally, the company’s logistics costs have been on the rise due to the growing demand for online grocery delivery. To meet this demand, BigBasket expanded its delivery network, but this expansion incurred higher costs.
The Tata Group, which acquired BigBasket in 2021, is concerned about these losses. While they remain hopeful that BigBasket will become a profitable venture in the long run, the company needs to focus on cost reduction and improving revenue growth.
Several reasons can be attributed to BigBasket’s losses. Firstly, the online grocery market in India is witnessing fierce competition as new players constantly enter the market. This intensifying competition has put pressure on BigBasket’s profit margins.
Furthermore, the COVID-19 pandemic caused disruptions to the supply chain, resulting in increased costs for BigBasket. Lastly, the company’s heavy spending on customer acquisition has also contributed to its losses.
The future profitability of BigBasket is uncertain; however, the Tata Group remains committed to the company and is likely to continue investing in its growth.
