Did you know? BigBasket makes more revenue than 32-year old Spencer’s Retail

• Spencer's is trailing behind BigBasket in terms of revenue, despite its heavy offline presence.
• Revenue of Spencer’s was 30% less than online grocery delivery startup BigBasket in the financial year 2020.
• BigBasket may record its best financial performance in 2021, whereas Spencer’s has reported a decrease in sales.

The year 2020 has been a game changer for India Inc. in many aspects. From shopping to working, everything has taken a digital spin and the debate of ‘online vs offline’ has been getting much stronger.

Thirty two-year old Spencer’s Retail, one of the prominent retail chains in India ⁠— owned by RP Sanjiv Goenka group ⁠— reported its annual financial report and it was a fairly decent one. The business was surely affected by the Covid-induced lockdown in the first quarter of fiscal year 2021 (FY21), but was flourishing the rest of the year. Yet, its revenue dipped 7% to ₹2,481 crore and losses widened to ₹163.8 crore.

This really got us wondering how the company fares in comparison to other players in the grocery segment -- both online and offline.

Online grocers are cumulatively the third largest player in the market behind DMart and Reliance Retail, according to a report dated June 4 from the broking firm Motilal Oswal. BigBasket is the biggest of that lot. What’s more shocking is the fact that BigBasket, just 10 years old in the market, earns more revenue than Spencer’s.

The comparison between BigBasket and Spencer’s may be of apples and oranges, but it is definitely an interesting one. The three-decade-old Spencer’s, which has a strong presence across 191 stores across 42 cities, earned almost 30% less than a decade-old online grocery business BigBasket in FY20. A scan of the last three financial statements (between FY18 to FY20) of the companies, revealed that this gap in revenue is not a new one.



This trend is expected to be carried forward in FY21 as well, especially with the sort of growth BigBasket has witnessed last year. Being the biggest player in the online grocery space, the company has doubled its daily deliveries to 3 lakh compared to pre-Covid days.

The company claims to have clocked a gross sale of ₹8,000 crore ($1.1 billion) in FY21. Though BigBasket is yet to report its financial statement for FY21, Business Insider has mailed the company seeking more details of their financial performance. It is expected to be the strongest one yet at least in terms of the revenue growth. No wonder, Tata Group was compelled to acquire BigBasket in order to pursue its Super App dreams.

Spencer’s, on the other hand, has reported receding revenue and widening loss during FY21. Though the company did test out a hybrid model by experimenting with online delivery in partnership with Dunzo and Uber last year, that doesn’t seem to have made much of a difference for the company either. Its revenue from sales (operating revenue) reported a 7% dip to ₹2,428 crore compared to ₹2,644.80 crore reported in FY20.



Well, BigBasket is actually much worse than Spencer’s in terms of its losses. The company had been burning cash ever since its inception in 2011 and is nowhere close to profitability. Whereas, Spencer’s had hit profitability in FY19, but went back to reporting a loss soon after.



According to stock broking house Motilal Oswal’s latest report on the retail segment, the online grocery segment has grown about 30 times over the last seven to eight years to reach $3 billion. Currently, India has about 154 million transacting households. Of which, 130 million are already using online grocery solutions, creating an addressable market of $293 billion.

Historically, the e-grocery segment has garnered a single-digit share of the overall organised grocery market in India, but 2020 brought these online grocery solutions to the forefront as stepping out of the house was no less than a health hazard, due to the pandemic.

Not only Spencer’s, but other traditional retail players like DMart and BigBazaar were compelled to take up an omnichannel approach and started taking online mode of ordering in partnerships with logistics and transportation players like Uber, Ola, Dunzo, Rapido and more. Besides this, Reliance’s JioMart expanded its presence from three cities to 200 cities in May 2020 in order to take a bigger share of the market.


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