Amazon eyes BigBasket to tap into India's online grocery space
What's the story
Amazon is currently exploring the possibility of buying online grocery site BigBasket in order to solidify its stance in India. If the e-commerce giant does end up buying BigBasket, it'll have, in its hands, India's largest online grocery firm that has a solid footing in 25 cities and it'd surely give Amazon an edge over its biggest Indian rival, Flipkart. Here's all about it.
Market
Nothing concrete is on the table, as of now
For Amazon, India is currently of utmost priority and in order to consolidate market share, it needs to make proper acquisitions in here. However, according to reports, the buyout talks are still in the nascent stage and there are no definite proposals on the table, as of now. While Amazon representative refused to make any comment, BigBasket's spokesperson said that the rumors weren't true.
Move
Amazon needs to act fast
Amazon's biggest Indian rival is on its final leg of acquiring Snapdeal, a move which will not only make it a formidable entity but will also open up avenues for Flipkart to get investments from SoftBank's deep pockets. Although, Jeff Bezos has fixed $5 billion war kitty to battle it out in the country's e-commerce market, it'd still need more to woo Indian customers.
No deal
BigBasket may refuse a buyout
Even if Amazon shows interest, BigBasket may not agree to a sale, as they already have the $150 million funding received last year, and this year in March they have again scooped up Rs. 45 crore in venture debt to strengthen delivery network and build new warehouses. BigBasket has already managed to break-even in two cities and its revenues are on an upward trajectory.
Okayed
Amazon's $500 million investment on the online food retailing sector
Amazon has been planning to get into online food and grocery sales for quite some time, in its bid to increase product offerings. It had asked the Indian government for food retail trading license and its plan to invest around $500 million in the sector is going to get sanctioned soon from the Department of Industrial Policy and Promotion, which takes care of FIs.