As earlier reported, Alibaba is investing $300 million in the hyperlocal grocery delivery firm, Big Basket. As per the reports, BigBasket will gain a post-money valuation of $850 Million. Further, the transaction is expected to involve a primary investment of about $220 Million while $80 Million will be used to acquire shares from existing investors.
In 2017, BigBasket also raised three funding rounds back to back, the latest being in October of $8.02 Mn (INR 52 Cr) from four of its existing investors including Abraaj Basket, Bessemer Venture Partners along with International Finance Corp and Sands Capital. Just a few days before this, it raised a funding of $5.8 Mn in two tranches from Helion Ventures and Trifecta Venture.
People Matters reached out to T.N Hari, HR Head BigBasket to talk about the implications of this funding on the talent strategy.
Q: What kind of implications do you see on your overall talent strategy?
We will see a significant step up in the growth. The overall macro-level structure of the organization is already in place, is well tested and rearing to go. Growth for us would largely mean driving new strategic initiatives and hiring more headcount at the bottom of the pyramid. Obviously, there would be some hiring at the supervisory and leadership level as well, but that won't be in large numbers. We are already prepared on that front. The fight for talent will be at the associate level. Our talent strategy at this level has always been about making them feel respected and valued; giving them opportunities to up-skill and educate themselves, and in the process increase their earning opportunities. We have a "BigBasket Trust" that is committed to improving the lives of our associates and their families. In the ultimate analysis, good ideas are easy to come by, but the ability to execute flawlessly is the differentiator. And every time we have demonstrated an ability to execute.
New funding rounds will raise the level of competition. This is good for the market and the consumers. The online grocery market would mature faster, and consumers will see good times. At some point in time in the future, the competitive contours will be redrawn. But it is difficult to predict the end game at this stage.
Q: How do you see "e-FMCG" as an industry evolving in the market? What are the top skills do you think are important in e-FMCG industry and what kind of skilling gap you observe in the current landscape?
The e-FMCG market will get to maturity faster now, and consumer preference for online shopping will see a boost. e-FMCG will result in a boost to private labels since private labels drive margins. Consumers too will begin to accept private labels, and over a period some of the private labels will become powerful brands by themselves that can create consumer pull. Again this is good for consumers - better quality products at lower prices.
As for skilling gap, every growth industry has always seen massive skilling gaps. So, industry leaders like big basket need to become market-makers for talent, and we have demonstrated the traits of a market-maker for a while. In every function, at all levels, we have hired people who can punch above their weight class. We spend time coaching them on their jobs with a lot of intensity. In the process, we get them to deliver outstanding performance. Newer players in this space may try and buy out some of this talent to accelerate their journey, but our strategy will continue to be about nurturing and growing talent. We believe most of the talent that is nurtured and developed in-house demonstrates considerably higher loyalty. They tend to be emotionally attached to the company and its culture more strongly than a mercenary workforce. Sustaining our culture in high growth times is something we will never lose sight of.