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business2businessposts-blog · 6 years

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Startups fight big global e-commerce firms to win online grocery battle

Online grocery activity is flourishing in India, attracting the attention of international retail and e-commerce companies such as Amazon and Walmart; the latter is trying to find its feet in India trending startup news daily with its new holdings, Fleckart. Although these foreign players with deep pockets are invading millions of people in grocery divisions, BigBasket and Grofers, the major grocery companies in India, they may seek to merge to fight strong competition.

Media reports have emerged that BigBasket and Grofers have revived merger talks with investors, Alibaba Group Holdings Limited and Softbank, looking forward to joining.

If the deal is executed outside, the integrated entity can raise $ 250 million from Alibaba Group Holdings of China, while Japan's Softbank Group and other investors can bring more capital into the new entity.

One report said BigBasket declined to comment, while a spokesman for Alibaba said: "As a policy, we do not comment on market speculation." Softbank spokesman declined to comment, according to the report.

Albinder Dhindsa, co-founder and CEO of Grofers Inc42 said: "Our business continues to exceed our expectations, and we are happy year after year growth we are on independent business and we do not comment on speculation."

The report says talks between the two are in a primitive phase and that Grofers continues to seek new investors. It is not clear who will implement the merged entity if the agreement is finalized. However, the report also stated that Grofers has a term paper for a strategic investor, which carries out due diligence in this regard.

Founded in 2011 by the founders of Fabmall Vibol Parekh, Abhinai Choudhari, VS Sudakar, Harry Menon and VS Ramesh, BigBasket based in Bengaluru offers nearly 20,000 products from more than 1000 brands and is located in 26 cities in India, including Bangalore, Hyderabad, Mumbai, Pune. Chennai and Delhi. Express delivery service is available within 60 to 120 minutes.

The report indicates that Kalagato from March 2017 was a bigBasket market share of about 35% in the online grocery sector, followed by Grofers with 31.5% and 31.2% with Amazon.

Founded in 2013 by Grovers IIT Albinder Dhindsa graduates and Surab Kumar is a low-priced online supermarket that allows consumers to order products from categories such as grocery stores, fruits and vegetables, beauty and wellness, home care and childcare, pet care, meat and food Navy, trending startup news daily delivered to your door in 13 cities.

BigBasket-Grofers: Merger Plans In The Works

The merger talks between the two new grocery companies began in India in October 2017 when reports appeared that Big Packet was in talks to buy Grover's, startup news daily where the latter was struggling to raise funds. However, Grofers was able to change its business earlier this year by implementing cost reductions, reducing operations in some markets and removing unprofitable products.

In 2018, Grofers invested within $ 62 million of SoftBank and closed the fiscal year 2018 with 950 INR in sales. It is now seeking an income target of Rs 2500 and plans to deploy more than 500 units for the maintenance of the stock (SKUs) for fiscal year 2019. This is what Grofers is doing to achieve this goal:

• Starting a supermarket is betting on an effective delivery mechanism.

• Focus its energy on private brands: Budget and G-Brands.

• Fresh products were removed from the list last month.

• Expanded its own brands to provide 250 food and non-food products to consumers.

Online Grocery Market In India

According to the Goldman Sachs report, India's online food market is estimated to reach $ 40 million (SEK 270) for fiscal year 19, with a CAGR of 62% from 2016 to 2022.

Here are some quick updates on what is cooking in the grocery industry online:

• Fleckart Super Mart, Wal-Mart Fleckart's grocery store, is currently working on all major IDs in Bangalore with plans to expand from five to six major cities by the end of 2018

• Amazon Pantry, Amazon Prime Now, and Google-powered Dunzo, are some of the other great players who make their way in the online grocery market in India.

• Small Connecters, such as Milkbasket, Daily Ninja, ZopNow, Satvacart and Godrej Nature's Basket, collect a large portion of online shoppers

• With plans to reach a total sales rate of $ 1 billion at the end of fiscal year 19, BigBasket aims to reduce its burn rate

• Grofers seeks to achieve significant goals and plans to launch more than 500 SKUs for fiscal year 2019.

According to the Morgan Stanley report, the food and grocery sector will become the fastest growing segment in India, expanding to a CAGR of 141% by 2020 and contributing $ 15 billion or 12.5% of online retail sales. The sector is expected to quadruple over the next three years to $ 1.38 billion (Rs. 100 billion) in revenue.

Given the enormous potential of the sector, startup news daily it is not surprising that foreign players in e-commerce repeat this. In such a scenario, an agreement between giant grocery giants BigBasket and Grofers will certainly send Amazon and Walmart-Flipkart to their boards of strategies to counteract the synergy between the duo.

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