Going one step ahead, Chinese e-commerce giant Alibaba Group Holding has got approval from the CCI (Competition Commission of India) to acquire a stake in Bengaluru-based e-grocer BigBasket.
Alibaba and BigBasket are in talks to square a deal of over $300 million which could be materialised in the coming days. According to the report, Paytm Mall is also likely to invest in BigBasket as part of the deal and will hold about 35-40% stake in the grocery etailer along with Alibaba.
This backing from Alibaba will indeed give BigBasket, a much-needed firepower to maintain its leadership position and fight Amazon, Grofers, as well as newly entrant Flipkart.
Last month, Flipkart launched its grocery delivery service under the brand name ‘Supermart’ in Bengaluru. It is the second time Flipkart has entered grocery and FMCG segment.
Flipkart’s rival Amazon India also launched its grocery ordering app, Amazon Now in February 2015. As per Kalagato, a data tracker platform, Amazon had about 31.2% market share in March 2017. Amazon delivers grocery in four cities – Mumbai, Bengaluru, Hyderabad and Delhi.
BigBasket along with Amazon and Grofers have earlier got approval for FDI in food retail with an investment to the tune of $695 million over the period of time with the Department of Industrial Policy and Promotion (DIPP).
In October this year, BigBasket picked up two rounds of investments. The online grocery firm raised Rs 52 crore from its four existing investors, including UAE-based Abraaj Basket, Bessemer Venture Partners along with International Finance Corp and Sands Capital. The funding came on the back of raising another Rs 38 crore in two tranches from Helion Ventures and Trifecta Venture in the same month.
The investors in the country are betting that the sector will turn into a multi-billion dollar category over the next few years. E-grocery sales are forecast to reach $1 billion in 2017, according to market research firm RedSeer Consulting Pvt. Ltd.