In an official announcement on March 13, 2021, the Tata Sons Pvt Ltd has revealed that the company will be buying about 64.3% stakes of BigBasket.
The holding company of Tata Group, Tata Sons Private Limited, has announced its plan to acquire a major stake in BigBasket, the largest online grocery provider in India. The Indian conglomerate is planning to acquire the stakes of BigBasket brand through its wholly owned subsidiary, Tata Digital Limited (TDL). Tata Sons will be acquiring around 64.3% stakes of the grocery provider for over US$ 1 billion from the SGS (Supermarket Grocery Supplies Pvt. Ltd) which holds the rights to sell products to various commercial units via bigbasket.com. SGS handles the B2B sales of BigBasket brand and with this deal it will retain the whole possession of IRC (Creative Retail Concepts Pvt. Ltd), the product providing company to consumers on the bigbasket.com. Last year, BigBasket had reported an increase in its year-to-year revenues by 36% on the end of financial year in March 2020.
Tata Group intends to introduce an application which will connect all of its consumer businesses. The company plans to debut in e-commerce market which is undisputedly pre-dominated by the tech giant Amazon and the newly launched local brand JioMart. The Tata Digital Limited is involved in the business to offer innovative services associated to access and identity management.
This acquisition of BigBasket is expected to boost Tata Group in the vast online grocery retail market of India, which had witnessed an enormous growth over the COVID-19 lockdowns since 2020. Although, the domestic online grocery retail sector and e-commerce market has become crowded with several multi-national companies and some emerging home-grown companies venturing in this business. It will be worth-watching to see how Tata Group manages to sustain this competition and consolidates its credibility among other players.