Touted to be the biggest deal in the online grocery space so far, Tata Group is in the final phase of obtaining a 68 per cent share of BigBasket- the Alibaba-backed online grocery start-up.
According to business reports, this share would be around Rs 9,300-9,500 crore.
According to an ET Now report, Alibaba, which owns nearly 30 per cent stake in BigBasket, and a handful of other investors, like Abraaj and IFC, are getting a near-complete exit from the start-up as part of the deal with Tata Group.
After the profitable months during the coronavirus pandemic, BigBasket competes with SoftBank-backed Grofers and Reliance’s JioMart.
BigBasket and Grofers’suserbases skyrocketed by as much as 80% last year, analysts at Citi Bank estimated in a recent note, adding that JioMart, run by 4th richest man in the world, Mukesh Ambani, had already started to pose serious competition.
Tata Group, which reported revenue of $113 billion in 2019 and operates several popular brands such as Jaguar Land Rover and tea maker Tetley, looks to expand their consumer businesses and works to develop a ‘super-app’ in India.
Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.
“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one," they wrote.
Till recently, the No 1 player in the space was BigBasket, with it hitting $1 billion annualized GMV & selling over 300,000 orders every day. Reliance Industries also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they added.
The expansion of Reliance Industries, one of India’s largest industrial houses, in e-commerce last year may have driven Tata Group to rush its digital efforts.
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