Alibaba has just emerged as the leading investor in India’s online grocer BigBasket, fronting a majority 75% of the latest $200m capital injection.
Existing investors Abraaj Group, Sands Capital and International Finance Corporation (IFC) were the other investors in this latest financing round.
After this round of funding, BigBasket’s valuation was pegged at about US$950m, just short of unicorn status.
The funds will be used to develop agricultural supplier networks, as well as to build warehousing and supply chain infrastructure.
BigBasket had initially held investment discussions with other parties including Amazon and Walmart, before Alibaba swooped in.
Founded in 2011, the company claims to be India’s top online grocery retailer with operations in 27 cities in the country. It carries fresh produce, grocery food items and household items on its site.
This investment will help BigBasket contest in the online grocery space with Walmart and Amazon.
Walmart: Advanced stage to buy Flipkart?
Just days ago, news leaked that US retail giant Walmart is in advanced talks to buy a significant stake in India’s Flipkart.
Flipkart is India’s dominant e-commerce marketplace while Walmart is the largest retailer in the world. This union would bring two superpowers together to join forces to combat Amazon in offline and online retail.
The Economic Times reported that Walmart is planning a 15-20% stake in the business.
Flipkart, launched in 2007, carries over 80 million products on its site. The company sell groceries to six cities in India so far and is contemplating further expansion.
According to Reuters, Flipkart has various investors including Japan’s SoftBank Group, China’s Tencent, and eBay and Microsoft.
Amazon: US giant flooring the pedal
Meanwhile, Amazon has just pumped Rs 1,950 crore (about $306m) into its India unit, adding even more fuel into its race against its competitors.
With this further funding, Amazon Seller Services in India has so far received close to Rs 8,150 crore (about US$1.3b) in the 2017-2018 financial year from its US parent, according to the Registrar of Companies filings.
The fourth capital infusion points to Amazon India's increasing desire to grow market share in India, where it offers Amazon Pantry — its core offering of groceries and household products available in over 30 major cities — and Amazon Now, an app-based service that provides two-hour grocery deliveries in Delhi, Mumbai, Bengaluru, and Hyderabad.
India’s grocery retail market is estimated to be worth about $600b.
For grocery retail in other big Asian markets, news recently broke on Walmart and Rakuten combining powers to launch an online grocery delivery service in Japan, as well as on China’s online and IT giant Tencent announcing investment discussions with Carrefour.