Alibaba to invest $200m in India’s online grocer Bigbasket

An employee weighs tomatoes after packing them at a BigBasket warehouse on the outskirts of Mumbai November 4, 2014. REUTERS/Danish Siddiqui/Files

Alibaba Group Holding Ltd., China’s e-commerce giant, plans to invest about $200 million in India’s largest online supermarket, Bigbasket, leading a $280 million funding round in the startup, according to people familiar with the negotiations.

Alibaba is taking a stake of about 25 percent in Bigbasket after months of negotiations, said the people, asking not to be identified because the matter is private. The Bangalore-based grocery business had previously been in talks for an investment from e-commerce pioneer Amazon.com Inc., which in June agreed to acquire U.S. grocer Whole Foods Markets Inc.

The investment marks an escalation in the competition between the world’s two largest e-commerce companies in India, one of the world’s fastest-growing — and as yet unconquered — online retail markets. Amazon founder Jeff Bezos has vowed to invest $5 billion in the country as he challenges local leader Flipkart Online Services Pvt. Alibaba has invested in One97 Communications Ltd., which runs digital payment and e-commerce businesses.

The Bigbasket deal is awaiting approval from the country’s antitrust authority, the Competition Commission of India, the people said. That is now seen as a formality and should come through any day, one person said.

Bigbasket and Alibaba did not respond to emails seeking comment on the new funding.

The deal values Bigbasket, a purveyor of groceries and household needs like toothpaste and freshly-ground masala (spice) powders, at $800 million. An affiliate of One97’s Paytm E-commerce Pvt may join Alibaba in its $200 million stake with a small investment, the person said.

Grocery and daily essentials is a challenging business the world over, even in advanced markets like the U.S. and China. Bigbasket, owned by Innovative Retail Concepts Pvt, operates in a country where expansion is difficult beyond the biggest cities because of rudimentary logistics and a shortage of refrigerated trucks and warehouses.

Growth will require capital expenditures, and Amazon got government approval earlier this year to invest $500 million into food retailing. Several high-profile grocery startups have collapsed in the last couple of years in India.

At the same time, online retailers can build loyalty and push high-margin private labels and fresh produce to buyers in the e-commerce segment that sees the highest repeatability.

Bigbasket’s TV commercials feature Bollywood actor Shahrukh Khan shopping for his home and then endorsing in Hindi “Main ek Bigbasket-eer hoon, aur aap?” (I’m a Bigbasket-eer, and you?). The company now delivers in over two dozen Indian cities and offers 18,000 products from over 1,000 brands. Its existing backers include the Dubai-based Abraaj Group as well as Sands Capital.

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.