Mumbai-based Tata Group is in advanced talk to buy a majority stake in online grocer BigBasket for $1.3 billion. The acquisition comes at a time when major companies are looking to expand their online retail business in the country.
An employee sorts out vegetables before packing them at a Big Basket warehouse on the outskirts of Mumbai. (Photo: Reuters)
The Tata Group has entered advanced talks to buy as much as 80 per cent stake of Alibaba-backed online grocer BigBasket for $1.3 billion. If the deal succeeds, the local online grocer will see its value soar to $1.6 billion.
A person familiar with the matter has told the Mint newspaper that the salt-to-software conglomerate is now negotiating how much stake it would purchase in Innovative Retail Concepts Pvt, commonly known as BigBasket.com.
Neither Tata Group nor BigBasket has officially commented on the development yet.
Like many other major conglomerates, Tata is also looking to strengthen its online retail presence in the country. Earlier reports had indicated that the Tata Group has been scouting for potential e-commerce assets that it can acquire as the battle for e-commerce dominance heats up in India.
Local acquisitions have become key for major conglomerates who want to make their presence felt in the online space to take on existing players like Flipkart and Amazon.
Mukesh Ambani’s recent fundraising for Reliance Retail Ventures Limited (RRVL) and the JioMart plan already puts him at a better position. But the Mumbai-based Tata Group is now seeking to sniff out potential acquisitions to narrow the gap.
Online grocery potential
Larger companies started focusing on local online grocery acquisition following the rapid growth in the online and e-commerce sector during the pandemic.
It is worth mentioning that about half of India’s $1 trillion retail markets comprises grocery sales and most conglomerates have realised that there is huge potential for growth.
While Flipkart and Amazon are spearheading India’s e-commerce market, even they are trying hard to expand their online grocery market footprint.
Experts had said earlier that local acquisitions will be key for major companies to flourish in the online grocery segment as it would help them to expand their reach beyond the country’s urban cities.