Managing service inventory.

Service inventory includes all process steps that are completed prior to the
customer’s arrival. As with physical inventories, service inventories allow firms
to buffer their resources from the variability of demand and reap benefits from
economies of scale while also providing customers with faster response times.

As of December 2011, BigBasket kept fewer stocks than it does now. With the
growth in business, the Company moved to an inventory model for most of its
products in 2013. Inventory model means that the Company purchases its
products from suppliers such as P&G, HUL, farmers, and mills. Its procurement
centres are located across the country according to its operations.

Since the Company purchases in bulk, it receives a higher discount on the cost
price and passes a small amount on to the customers. However, most of its
profits come from its private labels, Fresho, Royal Organic, Happy Chef
Gourmet. In these cases, it purchases unbranded products or where there is less
competition and sells them on its platform under its labels.

For perishable goods, the Company works on a "just-in-time model.”

Compared to the industry average of one-month, Big Basket maintains

inventory for ten days. With a lower stock level, the Company can save money
and reduce losses from perishable items. Big Basket wastes approximately 5%
of its perishables, which is a global benchmark. By combining these two
elements, the Company brought down cost by about 3%, which is critical in a
high-competition but low-margin business like groceries.

When Big Basket started out, there was no concept of apps. This meant
customers could not save their location while placing an order. Despite this, Big
Basket maintained its tenet of on-time delivery then as it does now. Right after
the first order by a customer, our client service representative would call them
and take their exact location through the Lat-Long technique with the map open
in front of them on the desktop. Once the location was flagged, it was recorded,
and the delivery boy could easily navigate to the customer location using
Google Maps. Their residential complex location data was so accurate that
Google Maps even bought this data from them, which was an important
milestone for them.