India’s on the internet grocery marketplace, which contributed .3 per cent to the $603 billion meals and beverages marketplace in India, has grown 73 per cent in 2020 from the preceding year. The gross merchandise worth (GMV) of the e-grocery marketplace elevated from $1.9 billion in 2019 to $3.3 billion in 2020, taking its penetration in the general marketplace to .6 per cent on the back of Covid tailwinds mainly, according to a RedSeer evaluation. The on the internet grocery marketplace is presently led by BigBasket, Grofers, Amazon Pantry, Flipkart Supermart, JioMart, Dunzo, and more. The fruits, vegetables, and staples category saw the strongest shift from offline to on the internet in 2020 with its GMV share in the e-grocery segment growing from 39 per cent to 47 per cent. This was led by consumers prioritising acquiring essentials on the internet followed by a shift from dining out to property-cooked meals.
Importantly, BigBasket is presently in sophisticated stages of discussion for promoting a 68 per cent stake in the organization to Tata Group for about $1.2-1.3 billion. According to sources familiar with the matter, the stake sale to Tata would worth BigBasket at roughly $1.8-1.9 billion. The deal could take 3-4 weeks to get completed post which BigBasket Co-founder Hari Menon will remain on board. The deal would provide an exit to BigBasket’s investors Abraham Group and Alibaba.
BigBasket declined to comment on the improvement though Tata Group didn’t reply to the e-mail query.
“Tata group has a significant presence in the Indian retail market across the categories, and given an online presence is now necessitated, the potential deal will ensure faster entry into the eGrocery segment. For Bigbasket, the deal helps in getting the needed funds and support for the next wave of growth,” stated Rohan Agarwal, Director, RedSeer. The improvement came ahead of BigBasket’s strategy to IPO in the coming years. “There are exits needed, people have to exit businesses and the best form of doing it is through an IPO,” Menon had stated at the Prarambh Start-up India International Summit final month.
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BigBasket had reported a 6.7 per cent jump in net losses to Rs 611 crore in FY20 up from Rs 572 crore in FY19 though its total revenue elevated from Rs 2,804 crore in FY19 to Rs 3,822 crore in FY20, according to the information from Tofler. “The company has been incurring significant losses over the years and has raised equity from shareholders to fund its operations. Subsequent to the year-end, the company raised Rs 3,935 million (Rs 393.5 crore) from certain investors based on which along with its existing working capital level at year-end, it believes it will be able to fund its operations for the next year,” the organization had stated in its regulatory filing.
Meanwhile, the on the internet grocery marketplace is probably to develop to $5.3 billion in size in 2021 and up to $26 billion by 2025 driven by digital adoption in markets beyond urban geography. According to RedSeer, several significant winners addressing varying consumer segments such as comfort acquiring, worth acquiring and so on., and use-instances such as stock-up, major-up and on-demand.