The online grocery store in the country has been growing at a dizzying rate during COVID-19
Tata Group is in advanced talks to buy up to 80 percent of BigBasket in a deal that is likely to value the local online supermarket backed by Alibaba Group Holding Ltd. at around $ 1.6 billion, a person familiar with the matter said.
The conglomerate is now negotiating how much stake it would buy in Innovative Retail Concepts Pvt., Which is commonly known as BigBasket.com, said the person, who asked not to be identified to discuss the details of the private conversations. The Mint newspaper previously reported that Tata could buy about 80% for $ 1.3 billion.
A Tata spokeswoman declined to comment, while BigBasket did not respond to requests for comment.
Mumbai-based Tata Group, with combined revenues of around $ 113 billion and major brands like Jaguar Land Rover and tea maker Tetley, is seeking local e-commerce assets at a time when the race for Indian buyers online is intensifying.
While billionaire Mukesh Ambani’s JioMart seeks to shake up the industry dominated by local units Amazon.com Inc. and Walmart Inc., Tata seeks potential acquisitions to bridge the gap with its rivals.
The online grocery store in India has grown at a dizzying rate during the pandemic, but the field is still open as none of the players have made a dent. About half of India’s $ 1 trillion retail market comprises grocery sales and there is enormous potential for growth.
The pandemic is shortening timelines to build internal capabilities, and for Tata, Walmart’s $ 16 billion acquisition of Indian online retailer Flipkart in summer 2018 could serve as a playbook. Flipkart is now face to face with Amazon in the India market.
Mint reported that Chinese giant Alibaba is likely to divest its entire stake in the deal. Representatives for Alibaba declined to comment.
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