Hari Menon, co-founder and CEO of BigBasket, recently shared his insights at IGIC 2024 on the profound impact of e-commerce on India’s logistics, digital infrastructure, and employment landscape. Menon highlighted the transformative growth driven by e-commerce and its future trajectory, focusing on several key areas.
Rise of E-Commerce Sites Like BigBasket and Its Impact
Logistics and Supply Chain Infrastructure: According to Menon, e-commerce has revolutionized India’s logistics and supply chain infrastructure. The proliferation of warehousing, innovative transportation solutions, and advanced last-mile delivery technologies are direct results of the sector’s expansion. “The scale we see today in logistics is unprecedented. You’re now seeing warehousing, logistics, and transportation solutions that are innovative and new. There’s a lot of technology integrated into warehousing, and the scale of these operations is impressive. This growth in scale is largely thanks to the rapid expansion of e-commerce across the country,” Menon noted.
Digital Infrastructure and Payment Systems: He emphasized the remarkable evolution of digital infrastructure, particularly in payment systems. Reflecting on his early entrepreneurial days with FabMart in 1999, Menon described the primitive state of online payments then. “We used to ask customers to give us their card details over the phone, and someone on the other end would manually authorize and authenticate those payments. It was highly risky, very dangerous, and worrisome. From those early days in 1999 to today, we’ve seen a complete evolution of payment systems, which are now entirely secure and online. Various types of payment systems have emerged and evolved, significantly improving the digital infrastructure. Faster internet speeds and broadband have also played a crucial role in this development,” he recounted. Today, secure and diverse digital payment methods, such as UPI and buy-now-pay-later options, have become standard, drastically improving transaction safety and convenience.
Job Creation and Women Empowerment: E-commerce has significantly contributed to job creation, particularly in blue-collar roles. Menon highlighted the increasing employment opportunities for women in various capacities, including delivery roles. “I think we’ve seen significant job creation since the rise of e-commerce. I’m not just talking about white-collar jobs, which have always been there, but the evolution of blue-collar jobs. This is something I’ve witnessed firsthand, and it has grown and scaled remarkably. Women’s employment has also increased substantially; today, we even see female delivery bikers. This evolution has occurred over time, driven by a vibrant startup ecosystem that fosters innovation across multiple sectors.” he said. He also stated that BigBasket has been a proponent of this trend, actively promoting women employment across its operations.
Innovation and Financial Inclusiveness: The vibrant startup ecosystem fueled by e-commerce has spurred innovation across multiple sectors, from logistics to customer service. Fintech advancements have enhanced financial inclusiveness, enabling credit access and financial empowerment for individuals in smaller towns. “E-commerce has opened markets for small businesses and artisans, allowing them to reach a broader customer base,” Menon stated.
Future Trends and Consumer Behavior
Mobile Commerce: Looking ahead, Menon predicts the dominance of mobile commerce, with app usage far surpassing desktop transactions. “One of the key factors enabling this growth is the rise of mobile commerce. About 6 to 8 years ago, the ratio of app usage to desktop usage was 50-50. Now, it’s nearly 95-5 in favor of apps. Hardly anyone uses a desktop for e-commerce anymore; it’s almost entirely done on mobile devices. This significant shift to mobile is here to stay and will continue to shape the future,” he observed.
Payment Methods: Payment methods will continue evolving, driven by secure and innovative systems like UPI and new options such as buy-now-pay-later. “UPI has completely changed the landscape; people don’t carry cash anymore, as payments are now made through their phones. New payment types, such as buy now, pay later, have been introduced, thanks to secure systems that have been developed. These systems are working well, with very few defaults. We can expect to see continued evolution and innovation in this area,” commented Menon.
Social Commerce and Quick Commerce: Menon anticipates significant growth in social commerce, where transactions are integrated into social media platforms like Facebook and Instagram. Moreover, the rise of “quick commerce” is reshaping consumer behavior. “I think buying habits are completely changing, thanks to the advent of quick commerce. People no longer want to wait or plan their purchases. They come home from work, decide what they want to eat, and have it delivered in 10 minutes, whether it’s ready-to-eat food, rice, pulses, or any other items. This shift is significant,” he explained.
Menon admitted his initial skepticism about the model but now sees it as a game-changer. “Initially, I was skeptical about this model, concerned about its commercial viability. However, my perspective has completely changed. At BigBasket, we now focus on faster deliveries, offering 2-hour, 15-minute, and even 10-minute delivery options. This is a major shift, especially for groceries, which have traditionally been planned purchases made at the beginning of the month or end of the week. Now, people buy whenever they need something, without stocking up their pantries,” he stated.
He further said that this quick commerce model is here to stay, and companies like BigBasket and BBM have proven its commercial viability. The business has scaled rapidly, marking a significant change in consumer behavior.
Investment and Technological Advancements
Menon added that he foresees substantial investments in the e-commerce sector, further fueling its growth. He hinted at future technological advancements that will continue to shape the industry, promising more detailed insights in subsequent discussions. As e-commerce in India is projected to reach $400 billion by 2026, Menon’s observations underscore the sector’s dynamic evolution and its pivotal role in driving economic and social progress.