Tata Group Intends to Buy Majority Stake in ‘Big Basket’ backed by Alibaba
Tata Group Intends to Buy Majority Stake in ‘Big Basket’ backed by Alibaba
Tata Group is in advanced negotiations to purchase approximately 80 percent of the Indian online grocery delivery service ‘Big Basket’. A person familiar with the subject matter stated that it is an agreement that is likely to value the local online grocery store backed by Alibaba Group Holding Limited at something like 1.6 billion dollars.
According to the proposal, the Tata Group and Big Basket have agreed on the structure of the agreement and the Indian multinational conglomerate ‘Tata Group’ is probably to purchase 50-60% of existing capitalists, including Chinese retail giant Alibaba and a few other key investors.
The chairman of the Tata Sons, N. Chandrasekaran said at the company’s annual meeting this year that the ‘super-app’ would provide services such as food and groceries, fashion, electronics, education, healthcare, and bill payments.
However, Tata Group’s strategy seems to be to establish a beachhead in India’s e-commerce market in the context of increased online sales due to the coronavirus (COVID-19).
Meanwhile, a second individual familiar with the subject matter stated that the main objective of the Tata Group is to win large market shares and the Big Basket can make that possible, as well as the agreement, will also help the Tata group in conceptualizing its proposed “Super App” by adding an extensive range of household items and grocery products from Big Basket.
According to Forrester Research, the Indian online grocery delivery firm gets around 300,000 orders daily and the Bengaluru-based company sells more than 18,000 products and has recently hit gross merchandise value (GMV) of $1 billion.
Besides, the Chinese giant ‘Alibaba’ which owns 29% of Big Basket, is likely to dispose of its entire stake in the deal to Tata Group, as per the reports.
Lastly, online grocery shopping in India has experienced rapid growth during the coronavirus pandemic, but the field is still wide open as none of the players have yet made a breakthrough.
