Paytm Mall, Paytm’s e-commerce platform, is close to pick up a majority stake in online grocery provider BigBasket. The companies are very close to finalize the deal anytime soon, reported Business Standard citing unknown sources.
Both PayTM and BigBasket are portfolio companies of Alibaba. Alibaba invested $200 million in BigBasket in February this year, while for PayTM the Jack Ma founded firm is already one of the biggest investors, thus it could play an important role in BigBasket’s acquisition by Paytm Mall.
It is to be noted IndianWeb2 could not verify the report however the pattern suggested that PayTM is indeed interested in BigBasket. In September last year, it was reported that BigBasket could raise Series-E round of funding from investors including Paytm Mall and Alibaba. Eventually in February, the Alibaba invested in BigBasket without any participation from PayTM Mall.
IF the acquisition deal goes through, it will not only give Alibaba a greater hold over India’s e-commerce market, which is dominated by the likes of Flipkart and Amazon but will also help both Paytm and BigBasket consolidate revenue through repeat customers.
A report published in Business Standard quoted sources saying that Paytm Mall and BigBasket are discussing the deal, which is in the fast track. But talks are stuck as BigBasket wants the company to be valued ‘premium’, and also seeks a seat on the Paytm Mall board.
The BigBasket acquisition reports are coming within few days after Paytm’s parent, One97 Communications, has received $300 million in fresh funding from Warren Buffet’s Berkshire Hathaway Inc.
Grocery retail in India is estimated to be over 60% of the country’s total retail market. According to analysts, grocery retail market is worth of anywhere between $400 billion to $600 billion at present with the potential to cross $700 billion by 2022. Online grocery is still small, but analysts see it as having huge potential.
Growing e-commerce industry and increasing internet penetration coupled with increasing smartphone users to increase online grocery sales in India through 2021.
In April, it was reported that Nasper-backed online food ordering & delivery startup Swiggy is also planning to launch a medicines and grocery delivery service, as it looks to diversify its business model and boost volume beyond just food ordering.