With the demand for private labels seeing a surge on its platform, online grocery player BigBasket is betting big on the in-house segment with an investment of Rs 200 crore in the current financial year.

The Bengaluru-based company is in the process of adding a slew of new offerings to its private labels category eyening to take the monthly sales from Rs 250 crore now to Rs 400 crore by March 2022. Currently around 38 per cent of the company’s revenue is generated from private labels.

“We treat our private labels like an FMCG brand. These are an integral part of our differentiation strategy which we have carefully built across categories,” says Seshu Kumar Tirumala, national head, buying and merchandising, BigBasket.

The company will be investing the Rs 200 crore to build its capability in storage, cleaning and packaging of private label products. It is planning to set up ripening chambers for bananas and mangoes, and a controlled atmospheric chamber for apples in Himachal Pradesh. Apart from setting up cold storage for potatoes and onions, it will be building packaging chambers for fruits and vegetables at all its distribution centres across the country. BigBasket will also be adding a cleaning and repacking centre for foodgrains in Indore for north India markets, like the one it already has in Vijayawada. The company also sells meat and poultry under its Fresho brand and will be setting up its own butcheries in all markets to keep a check on quality control.

According to experts, private labels are important for every retailer as they offer additional margins and help the company stand out.

“Companies like BigBasket can't compete sustainably on low-prices with established grocery retailers. Private labels help with competing profitably and also in being distinctive,” said Devangshu Dutta, Chief Executive of Third Eyesight.

The Alibaba-backed company will be adding cold pressed juices, chips, greek yoghurt, handmade natural soaps, and olive oil to its private label offering in a couple of months. It also has plans to foray into the frozen food and ready to eat category with cold cuts and marinades. “During the lockdown we found that there is a huge demand for frozen snacks, hence we are looking at that segment starting with frozen pizzas,” said Tirumala.

The company has around 2,000 SKUs for its in-house brands which would go up to 2,500 with these additions by the end of FY21.

BigBasket has around 8 private labels including Fresho for fresh produce, BB Royal and Popular for staples, Tasties for snacks, Good Diet for healthy snacking, Lindberg for chocolates and Happy Chef for sauces and spreads.

The company has plans to add over 30 new items to the Tasties brand which plays in namkeens and assorted biscuits. “We want a range of snacks for every ethnicity eventually in Tasties,” says Tirumala.

With health and immunity in spotlight after the Covid-19 outbreak, the company is also in the process of setting up a separate category for health and wellness where all the immunity building products of FMCG companies would be sold.

BigBasket has seen its daily orders double to 400,000 per day with a 45 per cent retention rate for first-time customers after the pandemic outbreak as customers get used to the convenience of ordering online, according to the company.