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
- Both brands will be benefited by data base sharing and a better customer connect.
- Both BigBasket and Tata can now cross sell their products and up their revenues.
- BigBasket can fetch more funds. The brand now has an option to go public.
- BigBasket’s entry fillips Tata Groups’ “Super app” (Tipped to unify many products and services) 3
Benefits to the Customer
- The new-found BigBasket can be pitched firmly against ace players like Amazon, Reliance and Walmart. This competition leads to better pricing and quality.
- 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
- The deal has exited Alibaba group from BigBasket. This enables the brand to get rid of the negative Chinese tag.
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.
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#Marketing Management#E-commerce#e-grocery#BigBasket#Tata Digital
(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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