Fund infusion gives online grocer more muscle to take on local rival Grofers, and helps the Chinese firm battle Amazon in India.
Mumbai : Chinese e-commerce major Alibaba will pump up to USD 300 million in online grocery firm, BigBasket, according to industry sources.The deal, which is expected to be announced in the next few weeks, will give BigBasket more muscle to compete against rivals like Grofers and e-tailing giant Amazon, they told PTI. The sources did not wish to be identified as the discussions are private.
BigBasket declined to comment. Meanwhile, an Alibaba spokesperson said: “As a matter of policy, we do not comment on market speculation”. In November, the Chinese e-commerce firm had sought the approval of the Competition Commission of India (CCI) to acquire a stake in BigBasket. Investing in BigBasket would help the NYSE-traded Alibaba take on its US-based rival Amazon in India. A deal will also help the Alibaba-backed payments bank Paytm further strengthen its presence in the Indian e-commerce space, PTI added.
NASDAQ-traded Amazon has received the Indian government’s approval for its proposed USD 500 million investmwent in a food retail business. It is also ramping up its business in the segment with Amazon Pantry and Amazon Now.
With people becoming comfortable buying even milk and bread online, the online grocery segment is projected to witness strong growth over the next few years in India. According to a report by Franchise India, the online grocery market is expected to be a Rs 2.7 billion market by 2018-19. Founded in 2014, Gurugram-headquartered Grofers is backed by Tokyo-traded SoftBank and Sequoia Capital. BigBasket, founded in 2011, operates in Bengaluru, Hyderabad, Pune, Mumbai, Chennai, Delhi-NCR, Ahmedabad, Patna, Kolkata, Jaipur, Vijayawada, Indore, Punjab and Lucknow. The firm has raised over $200 million from the Abraaj Group, Bessemer Venture Partners, Growthstory, Helion Venture Partners, IFC and Sands Capital.