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“We were pretty young,” Hari Menon laughs.

“We were one of the oldest entrepreneurs because we started late, but everybody else was 25 or 26. Our investors come and say we’re investing in old people. So 50 is young. At 50, you don’t necessarily retire. And the exits those days were reasonably good. But I don’t think you would be comfortable saying that is all I need for the rest of my life,” Hari shares in the 100X Entrepreneur podcast.

Before launching Bigbasket, Hari’s journey in the Indian ecommerce market started at the age of 37 with Fabmart in 1999.

In its first year, Fabmart did zero transactions and failed. However, this setback did not stop Hari and the other co-founders—Vipul Parekh, V S Sudhakar, Abhinay Choudhari, and V S Ramesh.

They soon launched a physical version of Fabmart called Fabmall—India’s first integrated online-to-offline retail company—which clicked well with customers.

With 300 stores in Tamil Nadu, Andhra Pradesh, Kerala, and Karnataka, Hari decided to sell it to the Aditya Birla Group. Soon, they founded Bigbasket in October 2011.

The ecommerce boom

In the 90s, no particular ecosystem existed for the survival of ecommerce companies, and there were hundreds of them at the time.

Hari recalls, “There used to be five to ten companies coming up, a lot of them in Bengaluru. All you needed was a “.com” attached to your name, and you’ll get funded. That was the situation in 1999 and 2000 in India. And the dot-com bubble burst in 2000 was so overhyped.”

Most of these ecommerce platforms were run on slow dial-up lines, and the access to technology was limited to desktops. Eventually, a lack of logistics mechanism and secure payment infrastructure saw these businesses collapsing as customers would not trust ecommerce sites.

“2000 was an absolute bloodbath year. Companies started shutting left, right, and centre; funding had completely stopped. Anybody who wanted to do anything, amid one year of frenzy, the whole economy collapsed,” Hari recalls.

Fast forward to 2011. Bigbasket finds itself amid no online competition, and the co-founders take a “brave decision” to do a complex business with groceries. 

“When businesses were collapsing, and much was not happening on the internet, we wanted to see how we can pivot and leverage what we built. So we set up the grocery business, and we knew how to do it,” Hari explains.

Soon, Bigbasket set up its warehouses, payment and supply chain infrastructure, a grocery inventory, and built its business model.

Building a profitable model is key

Businesses that suffer the most right now are those that are not building a profitable model, Hari says.

“You don’t have to be profitable overnight. All you have to do is demonstrate a profitable model. I think unit economics and profitability are going to be the next big thing. And logically, it doesn’t make sense to build a business that doesn’t make money,” he adds.

According to Hari, the newly launched businesses are getting a tremendous amount of boost and push from all the sectors. Traditional businesses, too, want to use the ecommerce model.

Moreover, he says, “Now, most organisations don’t survive without data. They have realised it’s an important thing, and they are trying to build data that makes sense.”

To know more, listen to the podcast here:

02:20 – Building India’s online grocery market in the last two decades

14:37 – Starting Bigbasket at the age of 50

21:16 – Dividing equity between the founders

21:42 – Mistakes and biases carried from the first venture

24:15 – Becoming a part of Tata Group, top learnings and observations

29:30 – His thoughts on “10-minute delivery”

33:14 – Any similar patterns between June 2022 and 1999 boom and bust?

35:14 – Businesses not building a profitable model will suffer the most

38:22 – Indian startup ecosystem in the next five to ten years

40:20 – Framework to identify large opportunities: scale and profitability

42:36 – Culture at Bigbasket

46:45 – Growing with the business as the CEO