Grocery is the fastest moving among all the FMCG products. People need vegetables and other food products almost on a daily basis and thus, the need arises very quickly. India for the longest time in history depended upon the local Mandi (vegetable and market where vendors sell the produce) and Kirana stores (smaller and local version of today’s supermarkets). However, with the advent of the internet and with it the benefits of it, the Indian way of grocery shopping is changing rapidly.
Grocery shopping through online platforms seemed to be unimaginable at first for India. However, this has changed over the years. It is getting easier for individuals to use a smartphone and the internet getting cheaper by the day. So online shopping is on a stellar rise and with it, the e-commerce players. Big Basket is the largest player in the online retail market of grocery.
The Internet is being used by many Indians. So much so, that it has taken the 2nd spot in terms of highest internet users after China. The numbers of netizens are on a steady rise and so is the mobile internet transfusion in the country. These developments have provided internet-based startups in India with a huge market in the country. In fact, major players from other countries as well are coming to India to test their mettle.
The food tech sector has witnessed rapid growth in recent times. Big basket is an e-commerce platform for the delivery of FMCG products, foods and fresh produce. Funds are crucial for a company for its continuous growth. Big Basket managed to lure big corporations and investors to pour money in their businesses. Recently, they closed a deal worth $150 million, which is supposed to take their value north of $1 billion. With this achievement, the startup will become part of the coveted unicorn club of India. India will gain a new unicorn and its reputation the startup country will remain intact and even increase.
Food delivery and restaurant reviewer platforms such as Zomato and Swiggy are now some of the largest unicorns in India in the food-tech industry. Big basket is looking forward to standing shoulder to shoulder with them soon. The recent funding round was led by Alibaba, which already is a major investor in Big Basket. They will be putting in another $50 million. Along with Alibaba, the UK government’s CDC group and South Korean investing giant Mirae Assets Global Investments are also participating. These big names in the investment scene make Big Basket one of the largest e-commerce platforms as well in India.
Alibaba is currently a major stakeholder in Big Basket with around 24% according to the Economic Times report. Alibaba was testing the Indian market especially in sectors such as the grocery shopping. In 2018, Alibaba’s officials on being asked about their plans to start operating in India said that they want to invest in new areas, which have a high frequency and return rate. Grocery is perhaps the sector, which has the most repeat buyers due to the nature of the inventory and public demand.
Big Basket’s success has proved a good investment for Alibaba. The recent funding will allow the company to be ahead of its competitors such as Grofers and e-commerce players such as Amazon and Flipkart. The new FDI policy introduced by the Indian government is a big hurdle for the foreign players but the local players such as Big Basket will benefit from it. We can see more such investments in this sector in near future.