Competition Commission of India (CCI) today gave the go-ahead for Tata Group’s proposal to acquire a majority stake in Alibaba-backed online grocery store BigBasket.
Competition Commission of India (CCI) today gave the go-ahead for Tata Group’s proposal to acquire a majority stake in Alibaba-backed online grocery store BigBasket. Tata Digital, a wholly-owned subsidiary of Tata Sons, will now acquire a 64.3% stake in the company, paving the way for a showdown in the online grocery business. BigBasket competes with Groffers in the segment which is backed by Sequoia Capital, SoftBank, and even Tiger Global.
The deal will see Tata Digital acquire 64.3% of the total share capital of Supermarket Grocery Supplies Private (SGS). With control over SGS, Tata Digital will also gain control of the Business to Consumer segment of BigBasket — Innovative Retail Concepts Private. While SGS the B2B (business-to-business) unit of BigBasket, Innovative Retail Concepts (IRC) is engaged in B2C sales.
According to Reuters, Tata Digital buying a majority stake in BigBasket will also see the exit of Chinese e-commerce giant Alibaba from the firm. Tata Digital is also expected to buy out investors such as Abraaj Group and IFC.
The deal will now put the Tata Group in competition with Amazon, which has been scaling up its online grocery business across various cities; and Mukesh Ambani’s Reliance Retail, along with SoftBank-funded Grofers.
With BigBasket, Tata Group has expanded its control over the retail space, where it now has control over electronics, jewellers, grocery and fashion verticals. Meanwhile, BigBasket is expected to get the much-needed funds to maintain its market share as competition continues to grow with global and domestic players gearing up for a battle. BigBasket was founded in 2011, and currently operates in 25 cities across the country.