Chinese ecommerce giant Alibaba is looking to acquire a stake in Indian online grocery player Big Basket and is seeking the approval of the Competition Commission of India for the same, reports VCCircle.
The investment into BigBasket will be made by Alibabaâ€™s subsidiary Alibaba.com Singapore E-Commerce. BigBasket is owned by Supermarket Grocery Supplies, a wholesale products supplier and is run by a separate firm, Innovative Retail Concepts, which runs the BigBasket property under licence from Supermarket Grocery.
This comes months after reports of Alibaba-backed Paytmâ€™s ecommerce unit Paytm Mall looking to invest $200 million in BigBasket.
Being backed by Alibaba will give BigBasket a stronghold in the online grocery space, where it already has a market leadership position. It will also give BigBasket the ammunition to take on fresh competition that is coming from Amazon, Flipkart, which have forayed into grocery and other players such as Quikr that are attempting to enter into this space.
Indiaâ€™s online grocery market has been seeing increased transactions. According to RedSeer consulting, Indiaâ€™s grocery market is on track to hit $1 billion in 2017, driven by volume growth and growing penetration.
Betting on this kind of growth, BigBasketâ€™s existing investors too, pumped in an additional $13 million into the online grocer. The funding round was led by Helion Ventures Partners, Abraaj Group, International Finance Corporation and Sands Capital, as per documents filed with the Registrar of Companies.
In fact, Amazon has committed an investment of $500 million into its food retail unit over the next 2-3 years after having received a regulatory approval to invest in food retailing in India.
Flipkart too, announced the relaunch of its grocery category â€˜Supermartâ€™. This is its second attempt after it launched a separate app nearbuy, which was eventually shut down.
There have been many players that attempted a play in this market and failed. Mumbai-based LocalBanya shut operations in 2015, following which Dehi-based PepperTap also closed down in 2016.