Why Did Tata Buy Big Basket? 

Amidst tough financial situations during the COVID-19 epidemic, news that affected the market was the decision of Tata to buy Big Basket.

BigBasket was launched as an Indian online grocery store in 2011 by 5 young entrepreneurs.

The team stepped into the market with around $10 million in funding and gained popularity as it was one of the few of its kind.

Fast delivery and the wide availability of grocery options made BigBasket a household name in no time. The news of Tata buying BigBasket and becoming the Big Basket owner was a shock to many.

What made BigBasket sell its majority share? Why did Tata buy a grocery store amidst financial difficulties surfacing the whole market? If these questions have to be summed up in a one-word answer, then it has to be Digital power.

Let’s get you into the details of the deal for better clarity.

Tata Bought Big Basket-Aa Financial Boom

In May 2021, authorities at TATA announced their happiness at purchasing 64.3% of shares in a leading online grocery company- BigBasket. The deal went through in March, and it was announced in the later month.

According to sources, the deal involved approximately 95 billion dollars. The deal also involved buying shares of E-commerce giant- Alibaba.

The share purchase was made by TATA Digital, a wing of TATA Sons, becoming the owner of BigBasket. While authorities at both ends refrained from making any further statements, financial geeks could easily see the benefits that the deal gave TATA.

Many argue it to be a mutually beneficial deal, but the share of stakes indicated a different picture.

Why Did Tata Buy Big Basket?

BigBasket Market

BigBasket was launched as an online grocery store, and within a short period, it got a strong foot in the market and expanded its name in over 25 Indian cities.

Studies show that BigBasket reached $1.1 billion in gross sales between 2020-2021, which goes out to prove that TATA is in for a big bag. In addition, BigBasket has around 55,000 stock-keeping units, adding to its market value.

Covid

The deal came along when the world was facing the COVID pandemic and relied heavily on online stores for everyday needs. In India, grocery sales were at an all-time high.

In a situation like this, a company like TATA is bound to find deals that give the company an upper hand in the market. The BigBasket deal came just in time and gave a solid financial boom initially.

Super App

TATA is a company known for showing interest in expanding over the widest possible industries. A newspaper headline went on to say- “TATA’s love for everything from salt to cars and luxury.”

The reason behind the same is its quest to launch a super app featuring every possible item that customers from different social statuses need. BigBasket was its step towards bringing groceries under its umbrella.

E-Commerce Power

TATA Sons was launched to turn TATA into a leading E-Commerce portal. The quest to compete with e-commerce giants like Amazon and Flipkart made TATA purchase majority shares in BigBasket.

Looking to gain a solid foot in the e-commerce market, TATA is on the verge of purchasing rather big e-pharmacy companies as well.

With the deal coming through, TATA Sons is set to work towards excelling its farm-to-fork dreams as BigBasket had chains with over 10,000 Indian farmers and major local food and grocery markets.

Final Thoughts

TATA Son’s official statement went on to showcase its interest in the food, beverages, and grocery market, especially at a time when it has become one of the leading markets on the globe.

Recently, they have expanded their shareholdings in the BigBasket market, reaching 68% shares. Sources suggest that the share increase was done through a deal worth ₹9,500 crore. With huge funding coming in for TATA Sons, they are all set to expand BigBasket and their salt-to-software dreams.

It would be interesting to see TATA grow its super app even as a consumer.

Frequently Asked Questions

Who Owns Big Basket?

BigBasket was taken over by TATA Sons in 2021 as the latter bought 63% of company shares. The deal came through in May 2021 and was worth 99 billion dollars.

Why Did Big Basket Sell Its Majority Shares to Tata Sons?

TATA Sons bought BigBasket in 2021 by investing a rather large sum of money, which was a saving grace for the latter. Sources suggest that the deal was mutually beneficial, and all is good between both companies as they plan to cross-sell products and become a giant in e-commerce.

Is Tata Successfully Running Big Basket?

TATA Groups is said to have a Midas touch, and it has done magic with BigBasket as well. They received a $200 million injection from investors to expand the company into an even bigger giant.

What is the Difference Between Big Basket and BB Daily?

BB Daily was a wing of BigBasket introduced to provide subscriptions to its users for daily grocery needs such as milk and vegetables. Orders through BB daily are delivered in the morning, while through BigBaskets, users can select slots for the next day.