Much before Zepto, Instamart and Blinkit took over the screen real estate on smartphones, BigBasket had already silently built an empire in the online grocery delivery space.

Even the rapid growth of quick commerce in the past three years has not fazed the Tata-owned company. That’s because BigBasket is home to the largest private label business in the Indian ecommerce space.

From everyday staples to fresh produce to household items across categories, BigBasket gradually entered into the private label business even before dark store mania swept through India.

Seshu Kumar Tirumala, chief buying and merchandising officer at BigBasket told Inc42 that out of the INR 10,062 Cr in sales generated by the company in FY24, close to 40% came from the in-house and private label brands.

The INR 4,000 Cr revenue from private labels for BigBasket far surpasses anything that Zepto has generated through Relish and Daily Good, for instance. The other platforms competing with BigBasket like Instamart and Blinkit do not have a sizable presence in the private label brands business.

Zepto has started making some inroads in the private label brands vertical with its meats and egg brand, Relishprojected to hit INR 500 Cr revenue in 2026. The quick commerce startup also launched its daily staples brand Daily Good last year.

It must be noted that there are key differences in how these private labels are created. Zepto’s model is not the same as BigBasket, and perhaps therein lies the reason for BigBasket’s huge private label business, which dwarfs what Instamart or Blinkit brought in in the whole year.

Founded in 2011 by Vipul Parekh, V. S. Sudhakar, Hari Menon, V. S. Ramesh and Abhinay Choudhari, BigBasket’s private label push was a wholly unique idea when it was introduced in 2014.

In some ways, the company was ahead of its time because at the time only large marketplaces had explored this model. Amazon had its Prime Basics and Solimo line in India, while Flipkart also experimented with some product categories. BigBasket began the private label push in 2014-2015 by partnering with kiranas and retailers to sell its private label products including the BB Royal line of staples.

BigBasket’s private labels such as Fresho and BB Royal brought in 33% of the company’s net sales for FY15, as per a TOI report.

The company built on this early lead in a big way with successive funding rounds — between August 2015 and September 2017, BigBasket raised close to $500 Mn which enabled the company to truly capitalise on the gap in the market.

And then in 2021, the Tata Group went on to acquire BigBasket in a deal valued at nearly $1 Bn.

To a large extent, BigBasket was the only player in the grocery delivery space between 2014 and 2019. The hyperlocal brigade came and went with Dunzo hanging on till 2024, but by the time the quick commerce boom came around, BigBasket was well entrenched.

The Tata deal truly put BigBasket in the big league with giants such as Amazon India and Flipkart even though it had already reached a revenue scale of INR 6,500 Cr by FY21 before the acquisition.

The acquisition gave BigBasket momentum to expand its same-day (slotted deliveries) and next-day delivery models, and private label brands became a huge component, allowing the company to compete on price.

Of course, with Blinkit, Zepto and Instamart capturing the imagination of consumers after 2020, BigBasket seemed to be at risk. The company was forced to move into express deliveries too, but Tirumala claimed there was no attrition from the active user base even when BigBasket did not offer BBNow.

“Incidentally, we did not lose a single customer from our e-commerce platform after the quick commerce revolution. This has been partly due to the fact that we had a strong presence in the private label brands with promised qualities and consistent delivery timelines,” the exec added.

Private label brands have become an intrinsic part of BigBasket’s DNA.

Today, Fresho (fruits and vegetables), Fresho Meats, BB Royal (staples), and BB Royal Organics anchor the company’s food essentials portfolio. These brands alone account for close to 30% of the platform’s total sales, according to Tirumala.

BigBasket has also developed differentiated brands for snacks and packaged foods through Tasties and Tasties Origins, for healthy snacks (BB GoodDiet), traditional and regional food items (Indie Secrets) and items for religious rites and rituals.

“The way we looked at private labels is that it has to be recognised as a brand in itself . We have product managers who will actually, you know, who are responsible for all the business. These managers are responsible for sourcing quality to marketing and ensuring growth in these categories,” the BigBasket executive explained.

We were told that each BB brand is run like an independent consumer packaged business — with product managers, sourcing leads, and marketing owners, giving it the consistency and identity customers expect from national brands.

While on average about 35% to 40% of the overall sales come through private labels and owned brands, it varies from month to month and from region to region based on the seasonality.

On the surface, owning brands — from sourcing the raw materials to producing finished goods to deliveries — seems like a more cost-intensive exercise than running an ecommerce marketplace.

The clear organisational structure helped mitigate some of the challenges, while other operational efficiencies came into the picture.

“We do not have any in-house manufacturing facilities. Most of our warehouses, dark stores run on leasing models. The crucial piece is sourcing fruits, vegetables and other foods. In the case of fruits and vegetables, we have developed a network of collection centres in the city outskirts, near villages and farms,” Tirumala told us.

The company directly ties up with farmers in each village through a dedicated app that registers details about the farmer. On-ground employees visit farms to verify location, check the produce quality and harvest season.

“We also do a simultaneous price check on these commodities and compare them to average market prices and then display the rate that we can pay to farmers in these collection centres. At this point, if a farmer agrees to sell at the price, we make arrangements to collect the produce,” chief buying and merchandising officer added.

Farmers get price details on WhatsApp and BigBasket’s FarmUs app. The app enables the company to geo-tag farms, track harvest cycles, send real-time procurement alerts, and push daily market price updates. “An almost similar playbook is implemented when it comes to meat brands or daily staples brands,” Tirumala claimed

For the organic staples range, BigBasket partnered with 100 certified organic farmer groups. Agronomists ensure that these farmers aren’t utilising inorganic fertilisers or pesticides and adhering to organic farming practices.

BigBasket’s organic supply stack also accounts for traceability — sourced products are marked with the QR codes so the end consumer can see the origin and complete feedback loop around organic products.

Although Tirumala downplayed the impact of quick commerce on BigBasket’s private label portfolio, he admitted that the company is now planning to foray into other non-essential categories because of the impulsive purchase behaviour ushered in by quick commerce.

“One such category is event or occasion based merchandise, which we forayed into last year. Quick commerce enables us to unlock latent consumer demand around last-minute buying for festivals and holidays. BigBasket is now launching merchandise and hampers under its own label for gifting with returns provisioned for,” Tirumala said.

BigBasket’s partnership with Tata-owned electronics retail chain Croma allowed it to cater to the electronics boom in 2024. Croma and other Tata-owned retail chains are also a moat for BigBasket besides the private label build-up.

The platform’s next big focus will be to tap into impulse and convenience-led buying, introducing differentiated private label inventory that general marketplaces can’t match. It is also looking to expand its private label presence beyond staples and into general merchandise.

Do private labels improve customer retention and engagement? Tirumala claimed there is some impact even beyond the 10-minute delivery model.

“We have seen with our experience of managing these brands that our customer stickiness/ retention even for our slotted deliveries is over 50%, much higher than the industry average. Private label brands play a huge role in customer stickiness due to the brand loyalty and consistency factor. They provide quality assurance, brand familiarity, and supply chain control which are key levers for customer stickiness,” he claimed.

Having one brand name for multiple categories eliminates confusion among consumers or decision paralysis. On the unit economics side, there are higher gross margins to be had rather than sourcing from other players. Consistency is another important factor, particularly for snacks, food, fresh produce and meat.

Of course, operating proprietary brands brings challenges such as increased employee costs and figuring out the distribution model for dark stores, especially as such stores open outside the Tier 1 markets. The other big challenge is ensuring that dark stores themselves are run more efficiently and without compromising on the quality which is key for private labels, an issue that has come to the fore in recent months.

The third challenge will be to prevent inventory loss the risk of which is even higher in some categories like fresh produce, meats and festival based SKUs. For last-mile supply chain infrastructure, the company has dark stores equipped with cold storage for up to -15 degree Celsius.

“I think with inventory obsolescence, there needs to be a certain predictability of sales, timings etc which can predict this. We are trying to solve this challenge. There is definitely a certain cost having your own private label which comes in terms of write-offs, etc, but because of our long experience in this category and the way we have built our supply chain, we have been able to mitigate these,” Tirumala claimed.

While BigBasket’s leadership in private labels is currently uncontested, others are looking to cross this moat.

“BigBasket remains the most mature private label engine in Indian quick commerce. But with younger players like Zepto entering the game and customer preferences shifting toward instant gratification, BigBasket’s next phase will be about scaling fast without losing brand trust,” an ecommerce analyst added.

Zepto, one of the fastest-scaling quick commerce platforms, is aggressively expanding its private brand portfolio with labels in ready-to-eat meals, snacks, and pantry essentials. But as we noted earlier, there’s a key difference in Zepto’s approach since Zepto operates through three separate entities — Geddit Convenience, Drogheria Sellers And Commodum Groceries.

Zepto licenses its brand name to these entities which eventually assume the marketing responsibilities for these private labels.

The sourcing of meat and eggs is done through third-party partners. Zepto uses poultry supplier Henfruit to source these eggs as per the packaging details of Relish Eggs.

Analysts believe Zepto will venture into more categories to offset the cashburn it is incurring in its expansion efforts. “Zepto is likely to expand into impulse-led categories, where BigBasket is currently lighter. BigBasket’s edge lies in depth and trust, but Zepto’s speed, branding acumen, and young customer base mean that the battle for pantry space is only just beginning,” added the Bengaluru-based analyst quoted above.

There is also a reality dawning upon BigBasket which is a distant fourth leading player in quick commerce after Blinkit, Zepto and Instamart. However, when you look at the scale of the full grocery delivery model, BigBasket is well ahead.

The big question for BigBasket is whether it can evolve its private label strategy and keep up with changing consumer preferences shifting towards instant gratification.

[Edited By Nikhil Subramaniam]

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