Tata-BigBasket Deal Has Many Merits

BigBasket, the three decade strong e-grocer major, operates in more than 30 cities in India. Its average monthly customer orders exceeds 15 million which saw a rise of 80 per cent during 2020. It has established a viable business model as well. In spite of these pluses, the company endorsed a merger with Tata group, multi-segment heavyweight.  In May 2021, Tata Digital acquired over 64 percent stake in BigBasket. 1, 2 

How does this coalition benefit the brands?  And the customers?

Gains to the Companies

  1. Both brands will be benefited by data base sharing and a better customer connect.
  1. Both BigBasket and Tata can now cross sell their products and up their revenues.
  1. BigBasket can fetch more funds. The brand now has an option to go public. 
  1. BigBasket’s entry fillips Tata Groups’ “Super app” (Tipped to unify many products and services) 3 

Benefits to the Customer

  1. The new-found BigBasket can be pitched firmly against ace players like Amazon, Reliance and Walmart. This competition leads to better pricing and quality. 
  1. BigBasket’s inventory model (Stocking inventory in own warehouses) might see a shift. If BigBasket adopts hyperlocal (Sourcing the goods from third party outlets) model, that would ensure faster delivery, fresh material and reduced prices. 2
  1. The deal has exited Alibaba group from BigBasket. This enables the brand to get rid of the negative Chinese tag. 

Conclusion

E-platforms penetrate only 1 per cent of the grocery space in India.

Tata-BigBasket merger can be a game changer provided they are tactful to the changing consumer needs. 

Postscript

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Key Words

#Marketing Management#E-commerce#e-grocery#BigBasket#Tata Digital

Source Article 

(1)Tata Acquires Majority Stake in BigBasket.  

(2)Tata Digital buys 64% stake in BigBasket. Economic Times-May 28, 2021

(3 India’s Tata buys majority stake in online grocer BigBasket. Reuters                                                                                

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