The Tata group is inching closer to the acquisition of Bigbasket that will put the salt-to-software conglomerate in direct competition with JioMart, Amazon India and Walmart-owned Flipkart apart from boosting its attempt to create a super-app that will offer a wide range of products under one roof.
On Tuesday, a CNBC-TV18 report said the deal has entered the last lap and it could be closed at the end of this month.
The Tatas are looking to acquire a majority stake in Bigbasket, which is amongst the largest e-grocers in the country and is reportedly valued at $1.23 billion.
The Tata group could pay close to $1 billion for the transaction. It is likely to buy the entire 29 per cent stake held by Alibaba apart from that held by a couple of other shareholders as well. The rest of the investors in Bigbasket include Abraaj group, Ascent Capital, Helion Venture Partners and the CDC group.
The acquisition comes at a time the Indian government has placed riders on Chinese investments in the country.
More importantly, since the Covid-19 outbreak, the online mode has gained acceptance not only in the metros but also in Tier 2 and Tier 3 cities.
Bigbasket has over 18,000 products and 1,000 brands in its catalogue. It currently serves cities such as Calcutta, Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi, Noida, Mysore and Coimbatore.
The entry of the Tata group into online grocery could heighten competition, particularly at a time Reliance Retail is looking to expand its footprint after a successful fund-raising exercise.
Reliance Retail Ventures recently said it has completed the current phase of partner induction and the fund-raising exercise through which it mobilised Rs 47,265 crore from nine financial partners.
Analysts at Bernstein said in a recent report that the India retail market was around $700 billion in 2018. This is expected to show a compounded annual growth rate of 10 per cent and reach $1.3 trillion by 2025.
“The Indian e-commerce market is the largest opportunity in the Indian internet ecosystem. It is expected to reach $133 billion by 2025 from $24 billion in 2018, around 30 per cent CAGR,” the report added.
This is a $ 100 billion incremental opportunity. The winner in the Indian E-commerce market will be the one with the most compelling integrated value proposition’
