Tata group, which is considered as salt-to-software, conglomerate plans to strengthen its position with buying a stake in e-commerce play. The company intends to take a stake of 68% in Bengaluru based online grocery startup, Big Basket. By executing this step, the company will take on prime player present in retail space that includes Reliance, Walmart group, Amazon among others.
One of the analysts and chief executive of Third Eyesight, Devangshu Dutta expressed that a remarkable presence had been made by big basket in online space in last 12 months. For accessing a large customer base, this transaction could be useful for Tata group. As per Big Basket and red seer report, in the country, the e-grocery market is anticipated to heighten to $18 billion by 2024 with a growth rate of 57% annually.
Big Basket stated that during Covid-19 pandemic, the company had observed an increase in new customer base around 84% and along with this higher retention rate of 50% was observed, which is more when compared with pre-covid-levels. The company presently recorded orders per month around 20 million. Additionally, the company in the previous year had achieved the, annual revenue with a run-rate of $1 billion.
An investment about $1.2 billion is being lined up in the e-commerce, in order to boost the Tata group’s position in the segment, which is expected to rise in the next five years with a CAGR of over 20%. As mentioned by the publication citing sources in their report, that in e-commerce, the Mumbai-based conglomerate is plotting to buy Alibaba’s 30% stake and in e-pharma platform, 1MG majority Stake, as its plan. These couple of investments are expected to be in the final stages and could be complete over the coming weeks which can lead to exit of various investors that includes Alibaba, Abraaj group and IFC.
The planning by Tata group regards to bring a ‘Super App’ that will go live probably in December and January this year, is going on for purpose of bringing entire consumer businesses under one platform. However, the Tata group has not yet officially confirmed the development of it.
