May 5, 2021 3:01:20 am
Tata Digital, the youngest company in Tata group, plans to bring an entirely new set of faces to manage the day-to-day affairs at online grocery, beauty products and convenience store BigBasket, according to people in the know of the development.
While incumbent BigBasket CEO Hari Menon is likely to continue in a management role, other senior members may be provided “a reasonable option” for exit, one of the persons said.
BigBasket — apart from being a part of the super app that Tata Digital is developing — is also likely to continue functioning as an independent store, while the warehouses and other logistics will be brought under a common management, the sources said. Tata Sons group said it had “no comments to offer” to an e-mail seeking response on the said plan.
Earlier in March, Tata Digital — the digital services subsidiary of Tata Sons — had proposed to buy 64.3 per cent stake in Supermarket Grocery Supplies Private Limited, a business-to-business (B2B0 entity. Supermarket Grocery Supplies, would in turn, buy 100 per cent stake in Innovative Retail Concepts Private Limited, a business-to-consumer (B2C) unit which manages the online retail store BigBasket.
The deal was cleared by the Competition Commission of India on April 29. With this deal, the Tata group would make its foray into the online grocery and daily need products segment. Though the company has presence in several sectors such as electronics, fashions and others, the BigBasket deal will help the salt-to-software conglomerate make the first major concrete step towards finalising the vision of its super app.
This deal will also enable the Tata group to compete with Reliance Industries Limited (RIL), Amazon and Walmart in the fresh fruits and vegetables as well as daily needs products space.
Mukesh Ambani-owned RIL has, via its subsidiary Jio Platforms, already operationalised Jio Mart, an online grocery store. Amazon and Walmart too have been selling grocery as well as other daily essentials through their platforms.
BigBasket, one of the biggest online grocery stores in India, saw a more than 80 per cent rise in new customers last year, while also observing customer retention rate of up to 50 per cent.
According to RedSeer Consulting, the e-grocery segment is a $300-billion market. Although the sector received a significant boost from Covid-induced lockdowns and restrictions, e-grocery platforms still penetrate less than 1 per cent of the grocery space in India, the consultancy firm said.
The total size of the e-grocery segment grew from $1.9 billion at the beginning of 2020 to $3 billion by its end. Other than large players like BigBasket, smaller or segmented players like Softbank-backed Grofers, Easyday, Milkbasket, CountryDelight, Godrej Nature’s Basket, are part of the sector.
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