BigBasket's consumer arm's FY22 loss increased four times as labour costs increased
The company's increasing losses coincided with BigBasket's ventures into the offline market with outlets bearing the "Fresho" brand and its investments in rapid commerce and 10-minute grocery delivery services through BBNow.
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According to BigBasket's most recent Ministry of Corporate Affairs filings, Tata Digital's consumer arm's net loss increased fourfold in FY22 (2021-2022) as employee benefit expenditures doubled (MCA).
According to the company's regulatory filings, BigBasket's B2C (business-to-consumer) division posted a net loss of Rs 812.7 crore for FY22 compared to Rs 202.7 crore in FY21 (2020-21). However, the company's operating revenue increased by 17% to Rs 7,098 crore. According to the documents, Innovative Retail Concepts' B2C division of BigBasket spent Rs 739 crore on personnel in FY22 as opposed to Rs 236 crore in FY21.
Other costs incurred by the business, such as those for advertising and transportation, more than doubled to Rs 1,097 crore.
The company's growing losses occurred at a time when it made significant investments in offline ventures. The Hari Menon-led business announced in November that it would add 200 physical locations around India by 2023 and 800 by 2026. In November, the business opened its first "Fresho"-branded offline location in Bengaluru.
With BBNow, BigBasket is entering the rapid commerce and 10-minute delivery markets with other modern technology players such as Zomato-owned Blinkit, Y Combinator-backed Zepto, Reliance-backed Dunzo, and Swiggy.
According to reports from last month, the Tata Digital-owned business has 160 dark storefronts spread over 10 cities, serving about 45% of its clientele. By the end of the next month, the firm stated that it intended to double the amount to approximately 300 in Tier 1 cities and approximately 40–50 in Tier II cities. According to the company, BigBasket has already established dark storefronts in cities like Kochi, Lucknow, and Vizag.
BigBasket's co-founder and CEO, Menon, claimed in a recent interview with Moneycontrol that his company is the only one in the supermarket industry to have all the forms that customers can need.
The formats Menon was referring to include BBInstant, a platform that instals vending machines in residential complexes and corporate canteens, BBDaily, a subscription offering, and BBNow, a rapid commerce offering.
