April 29, 2021 11:49:43 am
The Competition Commission of India (CCI) has cleared the acquisition of online grocery firm BigBasket by Tata Digital, a subsidiary of the Tata Group.
With this approval, the deal, which has been in the works for over the last six months, is nearing its close.
What are the details of the BigBasket and Tata Digital deal?
In the deal, Tata Digital Ltd will acquire up to 64.3% of Supermarket Grocery Supplies Pvt Ltd — the B2B unit of BigBasket and get sole control over the B2C unit Innovative Retail Concepts Pvt Ltd. Reportedly, the deal values BigBasket at over $1 billion. BigBasket’s CEO Hari Menon is expected to continue in his role after the acquisition.
What does the deal mean for BigBasket and Tata Digital?
For the Tata Group, the deal marks its first major step towards its plan of setting up a “super-app”. While the company has significant presence in several other retail segments like electronics, fashion, and even has an e-commerce portal TataCliq, it had not entered the online grocery segment.
For BigBasket, it will provide the necessary firepower to the brand to compete against the latest entrants in the e-grocery segment such as Reliance, Amazon and Walmart-owned Flipkart.
How is India’s e-grocery market shaped?
According to RedSeer Consulting, the e-grocery segment is a $300 billion market. According to the firm, although the sector received a significant boost from COVID, e-grocery platforms still penetrate less than 1% of the grocery space in India.
The total size of the e-grocery segment grew from $1.9 billion at the beginning of 2020, to $3 billion by year end.
Other than large players such as BigBasket, Amazon, Reliance and Flipkart, smaller or segmented players such as Softbank-backed Grofers, Milkbasket, CountryDelight, Godrej Nature’s Basket, Easyday are also present in the sector.