Company - - Dec 11,2017
Alibaba Group Holding Ltd., China’s e-commerce giant, is set to invest about $200 million in India’s largest online superstore, Bigbasket, leading a $280 million funding round in the startup.
It has been identified that grocery and daily essential products is a very challenging business around the world over, even in innovative markets like the U.S. and China. BigBasket is currently operating in a country, where expansion is difficult beyond the biggest cities because of rudimentary logistics. The company now delivers in over two dozen Indian cities and offers 18,000 products from over 1,000 brands.
The Alibaba and Paytm Mall association is likely to own around 35-40% stake in BigBasket, which is registered as Supermarket Grocery Supplies. The transaction is predictable to involve a principal investment of approximately $220 million while $80 million will be used to acquire shares from existing investors.
Alibaba is the world's largest retailer as of April 2016 ahead Walmart with operations in about 190 countries. It is also one of the largest Internet companies, generating more revenues than Amazon and eBay combined.
The transaction will add to a portfolio of strategic investments the Chinese Alibaba Group, is building in India as it squares up against Amazon in one of the most dynamic markets for e-commerce. This Bangalore-based grocery business had previously been in news for a vast investment from e-commerce pioneer Amazon.com Inc., which in June agreed to attain U.S. grocer Whole Foods Markets Inc. As reported, founder of Amazon, Jeff Bezos has vowed to invest $5 billion in the country as he challenges local leader Flipkart Online Services Pvt. Amazon is preparing to retail fresh produce in the country after securing government approval through its new entity.
The Bigbasket deal is currently in anticipation of approval from the country’s antitrust authority, the Competition Commission of India.