Investments in Amazon Retail and BigBasket to boost Indian e-grocery market

Amazon Retail India manages the supply of grocery and food items. As per the reports, the investment is against an allotment of 240-million equity shares of face value Rs 10 each. The entity has so far received Rs 115-crore from Amazon.

Last week, Amazon Retail’s filings with the corporate ministry showed that the firm had increased its authorised share capital to Rs 355.5-crore from Rs 165.5-crore earlier.

Whereas, grocery e-tailer BigBasket’s USD 150-million round led by South Korea’s Mirae Asset Global Investments is set to value the company at a little over USD 1.2-billion. 

Largest shareholder Alibaba will invest USD-50 million, while Mirae Asset will put in USD-59.9 million and UK government-owned CDC Group will invest USD-40 million, it said.

BigBasket’s USP lies in its supply chain integration for fresh fruits, vegetables, and meats businesses, which others struggle to fulfil due to deep reliance on kirana stores in a marketplace model. 

The round gives BigBasket firepower to aggressively venture into new cities and categories such as micro-delivery. It also helps maintain market leadership against Amazon, Flipkart, and Grofers, which are trying to establish a presence in groceries to take advantage of the segment’s highly repetitive and habit-forming nature. 

In February 2018, BigBasket operator Supermarket Grocery Supplies closed a USD 200-million round led by the Alibaba Group. There was also a USD 100-million secondary component in the deal. Currently, Alibaba holds about 24% in BigBasket, with Ascent Capital at 15.5%, Abraaj Group at 16.2% and founders and promoters holding 11%. 

Sources: Business Standard, Economic Times