Sets Subsistence Price for Tomatoes in Bangalore
BANGALORE, August 26, 2016 /PRNewswire/ —
To Sell the Product to the Customer at Zero Margins to Promote Consumption and Generate More Demand for Tomatoes to Uplift the Market
bigbasket.com, India’s largest online supermarket has taken a lead by voluntarily setting a subsistence price of tomatoes for farmers hit by crisis due to the sudden crash of tomatoes in Karnataka.
With a glut of tomatoes in the Bangalore market owing to a bumper harvest in the growing regions of Kolar, Malur and Chikbalalpur, prices in the wholesale markets have crashed to as low as Rs 1/- per kg. A price as low as this does not even recover the cost of production of tomatoes, which is around Rs 5/- per kg.
As a first step towards addressing the ongoing crisis, bigbasket.com has decided to pay the farmer a subsistence price of Rs 7/- per kg as against the market price of Rs 5/- to cover at least the cost of cultivation of the farmer and give him a sustenance income.
At the same time, to be fair to the consumer, they will be selling the product to customers in Bangalore at zero margins.
“This small step being voluntarily taken by us shall change the discourse around distress sale by the farmer and highlight the importance of right pricing in agriculture commodities, as there is the farmer on one end and the consumer on the other. It is important, not to harm the interest of one at the cost of the other,” said Vipul Mittal – National Head F&V, bigbasket.com.
“It is our endeavour to educate the consumers on the minimum price we should pay for a commodity like tomatoes and seek their support in furthering the good cause,” he added.
Selling tomatoes at a zero margin to consumers will help promote consumption and generate more demand for the product to uplift the market. It is imperative to understand that agriculture commodities are not manufactured in factories and are exposed to multiple risks. The greatest of them being the price discovery at the end of the harvest, which depends on the forces of demand and supply as well as the perishability of the crop.
bigbasket.com presently has operations in 26 Indian cities and has over 3 million registered customers. With over 20000 products across various categories: fresh fruits & vegetables, grocery & staples, beverages, bread, dairy & egg, branded foods, meat, personal care and household items;bigbasket.com is committed to making life simpler and grocery shopping a breeze .
It is worth noting that 20 percent of bigbasket.com’s value comes from fruits and vegetables, and this is about three times higher than what a physical chain does. For them, fruits and vegetables are a key category for regular traffic driver. Through its recently launched programme Farmer Connect, bigbasket is helping increase the income of farmers by around 10% to 15%. The company has set up several collection centres (CC) across the country and is now sourcing 60% of its fruits and vegetables directly from the farmers thus, eliminating middlemen in the procurement process.
bigbasket.com was founded in December 2011 in Bangalore by a team of five – V S Sudhakar, HariMenon, Vipul Parekh, V S Ramesh and Abhinay Choudhari. The team has both offline and online retail experience, as they had earlier set up India’s first e-commerce site FabMart.com in 1999, and then established the Fabmall-Trinethra chain of more than 200 grocery supermarket stores in southern India. Servicing up to 2.7 million registered customers, bigbasket has grown into India’s largest online supermarket with over 20,000 products from over 1000 brands and presence in 25 cities across the country including Bangalore, Hyderabad, Mumbai, Pune, Chennai & Delhi-NCR, with plans to expand to other cities soon. bigbasket’s online food store offers a variety of products across various categories: fresh fruits & vegetables, grocery & staples, beverages, bread, dairy & egg products, branded foods, meat, personal care and household products. BigBasket.com is committed to making life simpler and grocery shopping a breeze.