Tata Sons Asks BigBasket to Raise $1 Billion, Questions Slow Growth: ET
The Indian e-commerce landscape has witnessed a significant surge in the quick commerce segment, with players like Swiggy, Zomato, and others gaining immense popularity. However, it seems that one of the prominent players in this space, BigBasket, is struggling to keep pace with the growth. Tata Sons, the parent company of BigBasket, has apparently expressed discontent with the slow growth of the subsidiary and has asked it to raise around $1 billion from external investors to stage a comeback.
According to a report by the Economic Times, Tata Sons has questioned BigBasket’s slow growth in the quick commerce segment and has termed the lag as a strategic mishap. The report further states that BigBasket has been asked to onboard a large financial investor to raise the required funds.
BigBasket, which was valued at around $2.5 billion in 2020, has been struggling to maintain its growth momentum in recent times. The company has been facing stiff competition from other players in the quick commerce space, and its failure to innovate and expand its offerings has been cited as one of the primary reasons for its slow growth.
Tata Sons’ decision to ask BigBasket to raise funds from external investors is a significant development in the Indian startup ecosystem. While Tata Sons reportedly doesn’t plan to lead the funding round, it is evident that the parent company is looking for a significant stake sale in BigBasket to bring in fresh capital and inject new energy into the business.
The quick commerce segment has been one of the most attractive spaces in the Indian e-commerce industry in recent times. With the rise of hyper-local delivery and same-day delivery, consumers are increasingly looking for convenience and speed in their online shopping experiences. Players like Swiggy, Zomato, and others have capitalized on this trend by offering a range of products and services that cater to the changing consumer preferences.
BigBasket, which was founded in 2011, has been one of the pioneers in the Indian e-commerce space. The company has a strong presence in the grocery delivery segment and has been expanding its offerings to include fresh produce, meat, and other essentials. However, despite its strong foundation, BigBasket has been struggling to keep pace with the growth of other players in the quick commerce space.
The company’s slow growth can be attributed to a range of factors, including the intense competition in the market, increasing operational costs, and the need to expand its offerings to cater to changing consumer preferences. BigBasket has been trying to innovate and expand its offerings, but its efforts have been slow to bear fruit.
In recent times, BigBasket has been focusing on its hyper-local delivery model, which involves partnering with local stores and kiranas to deliver products to customers. The company has also been expanding its offerings to include fresh produce, meat, and other essentials. However, despite these efforts, BigBasket has been struggling to maintain its growth momentum.
Tata Sons’ decision to ask BigBasket to raise funds from external investors is a clear indication of the parent company’s dissatisfaction with the subsidiary’s slow growth. The decision is likely to have significant implications for the Indian startup ecosystem, as it could set a precedent for other parent companies to take a more active role in the funding and operations of their subsidiaries.
In conclusion, the news that Tata Sons has asked BigBasket to raise $1 billion from external investors is a significant development in the Indian startup ecosystem. The decision is a clear indication of the parent company’s dissatisfaction with the subsidiary’s slow growth and its desire to bring in fresh capital and new energy into the business. As the Indian e-commerce landscape continues to evolve, it will be interesting to see how BigBasket responds to this challenge and whether it can stage a comeback in the quick commerce segment.
