Tata Group Has Bought 68% Stake In Big Basket For $1.3 Billion

The Tata Group appears to have taken the first step in building its own super-app — and taking on Amazon, Flipkart and Jiomart.

The Tata Group has bought a 68% stake in Big Basket for $1.3 billion (Rs. 9200 crore), CNBC TV-18 reports. As a part of the deal. Chinese company Alibaba, which had a 28% stake in Big Basket, and Dubai’s Abraaj Group, which had an 18% stake, will exit as Big Basket investors. Big Basket’s co-founder and CEO Hari Menon, and the company’s top management, will stay on.

The acquisition follow’s Tata Group’s declaration last year that it was planning to launch its own super app. “It will be a super app, a lot of apps in apps and so on . . . We have a very big opportunity,” Tata Sons Chairman N Chandrasekaran had said in August. “The Tata Group, depending upon how you count, touches several hundred millions of consumers in India, if you take consumers who are walking in everyday into a Tata facility … How do we give a simple online experience connecting all of this, and at the same time a beautiful omnichannel experience? . . . That is the vision,” he had added. The super app will provide food and grocery ordering, fashion and lifestyle, consumer durables, insurance and financial services, healthcare and bill payments.

While there might be lots of verticals on the anvil, it’s no surprise that the Tata Group is launching its super app with a grocery company — grocery delivery orders have low order values, which people can use to dip their toes into a new e-commerce app. They’re also high-frequency, which means that if the service works well, people can end up using it several times a month. It’s possible to build a whole e-commerce business around this, slowly graduating these users from buying milk and groceries on your platform, to getting them to buy higher value items like clothes, accessories and electronics. This is the game plan with which JioMart had launched its e-commerce venture — after starting off selling groceries, it’s now adding new categories, including electronics on its platform.

And the Tata Group has plenty of its own e-commerce operations to integrate on the app. It has digital arms in Tata CliQ and Croma, brands like Tanishq and Voltas, and even consumer products like Tata Salt, Tata Coffee and Starbucks. To top it all, it has deep pockets, and could really make a dent in the e-commerce space if it puts its mind to it. JioMart had been trying to emerge as an Indian competitor to Amazon and Flipkart, but it seems that yet another homegrown conglomerate — the Tata Group — has also thrown its hat in the ring.