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Alibaba and Paytm Mail Eye $200 Million Investment in Grocery Delivery Firm BigBasket

Alibaba and Paytm Mail Eye $200 Million Investment in Grocery Delivery Firm BigBasket

Tuesday, August 29th, 2017

Though the U.S. market is still swirling with the completed Amazon and Whole Foods merger, the e-commerce giant isn’t the only one looking to gain a stronger presence in the growing online grocery sector. Alibaba and its subsidiary Paytm are reportedly considering a $200 million investment by way of an acquisition.

Paytm is considering purchasing BigBasket, an online grocer that Amazon had also previously explored buying, according to Economic Times. For those unfamiliar, Alibaba, Paytm’s parent, is a China-based e-commerce powerhouse and boasts a market cap that is now marginally larger than Amazon’s own.

Alibaba's corporate campus in Xixi, Hangzhou, China

BigBasket's gross sales were among the fastest growing for major online retail companies, according to Praxis Global Alliance, which noted that the company registered a compound annual growth rate of about 209% between 2013-14 and fiscal 2014-15.

While no deal has been made yet, a transaction with Alibaba and Paytm Mall could be finalized in the coming weeks should the negotiations go through. This, the news source reported, would put grocery at the center of the e-commerce market battle.

Ankur Bisen, Senior Vice President, Technopak Advisors“It’s going to be an Alibaba versus Amazon play in the long run,” Ankur Bisen, Senior Vice President at Technopak Advisors, told source VCCircle in an earlier interview. 

The world looks to be smaller in cyberspace, as multiple sources note Paytm and Alibaba's investment in BigBasket will give it a stronger defense against Amazon’s expansions across the Atlantic, as well as gaining an entry into additional retail segments and regions.

BigBasket’s in-house brands include Fresho for fruits and vegetables and Happy Chef for gourmet foods, which accounted for more than one-third of its sales. It is seeking a valuation of $1 billion, according to people familiar with the situation, a term that Amazon did not accept but Paytm Mall might.

Praxis also noted that grocery is one of the fastest-growing segments in retail, stating that grocery accounts for about 4% and about half of the overall retail market. 

Will this move go through, and how will that affect the online grocery market? Deli Market News will report.