Grocery has become top priority for leading e-commerce companies in India as transaction in other categories aren’t growing significantly. Following the lines of its investee company – Paytm Mall, Alibaba has also shown interest to invest in online grocery platform Bigbasket.
According to the Economic Times report, Alibaba and Paytm Mall together are in talks with Bigbasket for picking up stake in online grocer. Earlier, Entrackr reported that Paytm’s plan to own majority stake in the Abraaj group funded company. However, it looks like Alibaba has also joined Paytm for Bigbasket funding.
Paytm Mall and Alibaba jointly begun due-diligence to pump-in $200 million round in Bigbasket that will shoot-up later valuation to $900 million (post money). Interestingly, Amazon was also interested to invest in Bigbasket.
The Jeff Bezos led company had entered into a 60-day exclusivity agreement with Bigbasket for a potential acquisition. However, talks failed to go further owing to valuation asked by the online grocery platform.
BigBasket is the largest funded online grocery store with $220 million in funds from investors including Abraaj Group, Bessemer Venture Partners, Sands Capital, Helion Venture Partners and International Finance Corp.
Meanwhile, India’s largest online grocer is also talking with Singapore’s sovereign wealth fund Temasek Holdings and China’s Fosun Group for potential investment.
After raising $200 million from Alibaba and SAIF Partners for Paytm Mall, the Noida-based company has started to reinvent itself on the lines of T Mall (also known as Taobao). Recently, it delisted about 85,000 sellers to weed out fraudulent merchants and improve customer experience. Of late, consumer experience with Paytm isn’t at par with Amazon and Flipkart.
E-commerce companies in India are struggling to bring new buyers. Currently, India has about 70 million online shoppers and this number is almost stagnant from past 18 months or so. Meanwhile, grocery is considered as sticky category as consumers tend to buy it at least twice a month.
The frequent buying in grocery can drive more transaction and enhanced loyalty to the e-commerce platforms. Besides Paytm Mall and Amazon, Flipkart will also begin grocery selling later this year.