Tata Buys Majority Stake in BigBasket, to Compete Against Amazon, Flipkart

Tata Sons Private Limited said on Friday that Tata Digital has acquired a majority stake in online grocery platform BigBasket. This new deal will put the India’s largest conglomerate in direct competition with Amazon, Flipkart and Reliance Industries, which have been dominating the e-commerce space in the country.

Tata Digital, a 100 per cent subsidiary of Tata Sons Private Limited has bought the stake in BigBasket. In March, Competition Commission of India (CCI) approved the Tata-BigBasket deal, wherein the Indian conglomerate has picked up 64.3% stake in the online grocery for Rs 9,500 crore, according to media reports.

With BigBasket, Tata Group has expanded its control over the retail space, where it now has control over electronics, jewellers, grocery and fashion verticals. The salt-to-software conglomerate has been planning to launch a “super app” that will tie in all its consumer businesses, according to media reports.

The deal comes at a time when online shopping has accelerated in India, especially in the aftermath of COVID-19 pandemic. Tata Group is building a digital consumer ecosystem addressing consumer needs across categories in a unified manner and online food & grocery is an important part of this ecosystem. Accordingly, this acquisition presents an attractive opportunity for Tata Group in its overall vision of creating a digital ecosystem, said a statement from the company.

Pratik Pal, chief executive officer of Tata Digital said, “Grocery is one of the largest components of an individual’s consumption basket in India, and Bigbasket as India’s largest e-grocery player, fits in perfectly with our vision of creating a large consumer digital ecosystem. We are delighted to welcome Bigbasket as a part of the Tata Digital.”

Tata group’s acquisition puts the enterprise value of BigBasket at over Rs 13,500 crore, according to reports. In March 2019, BigBasket had raised $150 million from Mirae, Alibaba and CDC Group, which placed the Bengaluru-based company in the unicorn club. The company had earlier said it planned to utilise the proceeds of this fundraising to further penetrate into existing markets with more investments in the first mile, scaling-up of its supply chain and for developing new reseller channels.

E-grocery has been one of the fastest growing segments in the consumer e-commerce space in India. Founded in 2011, BigBasket operates in 25 Indian cities. It has emerged as one of populare online grocery platforms in the country in the recent years. It also operates a farm-to-fork supply chain with over farmers and several collection centers across India.

Hari Menon, chief executive officer of Bigbasket, said: “We are extremely excited about our future as a part of Tata Group. As a part of the Tata Ecosystem we would be able to build stronger consumer connect and accelerate our journey.”