India's digital payments firm Paytm could soon be teaming up with Chinese fintech investor Alibaba to invest in a $200 million stake into India's leading online grocery store Bigbasket. In a report from Deal Street Asia, the two fintech companies are in a 60-day exclusive…
India’s digital payments firm Paytm could soon be teaming up with Chinese fintech investor Alibaba to invest in a $200 million stake into India’s leading online grocery store Bigbasket.
In a report from Deal Street Asia, the two fintech companies are in a 60-day exclusive pact with the grocery store, but that the two companies could either invest together or separately.
According to Franchise India, India’s online grocery market is estimated to be worth less than $100 million at present, but is expected to rise to cross $25 billion by 2020. With such promising figures for the market, an investment from fintech Paytm would boost its position in the e-commerce sector. For Alibaba, it could strengthen its position against U.S.-based Amazon.
Interestingly, other major players that are also said to be interested in Bigbasket and are undergoing discussions with the store is Amazon.
In a statement from an Amazon spokesperson, they said:
We have received the government approval for food retail based on our application for the same. We are excited by the government’s continued efforts to encourage FDI in India for a stronger food supply chain.
The Economic Times had reported in June that Amazon was in preliminary talks to buy Bigbasket, but according to a spokesperson for the online grocer this wasn’t true. Now, though, it looks as though the tides may be changing. At the time it was claimed that Jeff Bezos, Amazon CEO, had committed to spending $5 billion in India over the coming years in a bid to compete with local rivals.
Amazon has already acquired Whole Foods in a $42 a share, in a deal valued at $13.7 billion, reports CNBC. It was initially thought that the deal would close in the second half of 2017. However, in latest reports that deal is under scrutiny after some groups raised anti-trust concerns. Whole Foods have said that it could take until May 2018 before the deal is closed.
Such an alliance between two major fintech firms could help them pitch themselves against the likes of Amazon, which is planning on investing $500 million into food retailing in India.
Bigbasket, which is owned by Supermarket Grocery Supplies Pvt, received a $150 million investment in March to expand its services into new cities. The company currently serves five million visitors and processes one million orders each month, and claims to offer over 19,000 products from more than 1,000 brands.
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Last modified: January 24, 2020 11:59 PM UTC