At times like these, when the whole world is relying on online shopping and businesses, the Tata group which is one of the largest industrial groups in India has decided to buy 68% stake of an online grocery platform called BigBasket. We all have been hearing about Tata willing to buy stakes of the ecommerce site- BigBasket, for quite some time and Now, the deal has been signed for ₹9,500 crore which has also put the enterprise value of BigBasket for more than ₹13,500 crore.
HISTORY OF TATA GROUP OF INDUSTRIES
The Tata group is an Indian multinational conglomerate whose headquarter is located in Mumbai, Maharashtra. The Tata group of industries was founded as a private trading firm in 1868 by Jamsetji Nusserwanji Tata who was entrepreneur and a philanthropist at that time.
After the death of Jamsetji Nusserwanji in 1904, his son Sir Dorab Tata became the chairperson of the Tata Group of Industries. Under Dorab’s leadership the Tata group quickly diversified itself into different industries which included steel in 1907, electricity in 1910, education in 1911, consumer goods in 1917 and aviation in 1932. , Sir Nowroji Saklatwala took over the position of the chairperson, after the death of Sir Dorab Tata. Six years hence, Jehangir Ratanji Dadabhoy Tata became the chair person of the group. Under his control, the company widened its horizons and expanded its reach into new sectors like, chemicals in 1939, technology in 1945, cosmetics in 1952, marketing, engineering, and manufacturing in 1954, tea in 1962, and software services in 1968. In 1945, the Tata Group launched the Tata Engineering and Locomotive Company (TELCO) in order to build locomotive products and hence later on the company was renamed as Tata Motors in 2003. In 1991, Ratan Tata-J.R.D.’s nephew took over and his main aim was to globalize the business as widely as possible. In 2000, the tata group acquired Tetley Tea, a beverage manufacturer based in London. In 2004, the group purchased South Korea’s truck-manufacturing operations of Daewoo Motors. In 2001 the insurance company Tata-AIG was created on partnership with the American International Group, Inc. (AIG). In the year 2007, the group acquired the giant Anglo-Dutch steel manufacturer Corus Group and entered the automotive industry. On January 10, 2008, Tata Motors officially launched the people’s most affordable car ‘Nano’. In January 2017, Natarajan Chandrasekaran was appointed as the chairperson of the group.
HISTORY OF BIGBASKET
Gone are the days when we used to spend hours searching for our desired grocery items in the shopping stores, waiting for so long in lines before the counter and then running back to the store if we had to return something back. Startups like BigBasket have proven to provide a level of comfort to all its consumers by providing a way of grocery shopping through online measures. Moreover, in times like these when people would not risk going out for anything, companies like BigBasket have been very useful and have seen a tremendous amount of growth. The company currently operates in 25 Indian cities and is one of the competitors of Amazon India and Walmart owned-Flipkart.
The company was founded by Mr Hari Menon, who is now the CEO of the company, Mr. V S Sudhakar, Mr. Vipul Parekh, Mr. Abhinay Choudhari and Mr. V S Ramesh. In 1999, these five founders started their own business by the name ‘Fabmart’. A division for online grocery shopping was created in 2001 and the company saw immense growth in its business. They started opening up new supermarkets in the southern India by the name “Fabmall”, which later on was acquired by the Aditya group. Founders, in the need to establish something greater and bigger, eventually launched BigBasket in the year 2011. The company was growing stupendously by the year 2014 when it was receiving over 5000 orders everyday in three major cities. By 2016, the company crossed targeted 10 million customers orders. Companies and investors like Paytm, Alibaba, Bessemer Ventures, Helion, Zodius, LionRock Capital and Meena Ganesh started investing in the company. In order to expand its business, the company sought of exploring other parts of India as well. It started building warehouses and cold rooms specifically for fresh products. It started investing in its technology area as well in order to increase the efficiency of the item deliveries and to make shopping for customer easy and comfortable both in browsers and mobile applications.
BigBasket spent a lot of time in researching what kind of products do their customers want and where do they come from, having figured that out the company started introducing large amount of products to that city where those products were in high demand.
According to sources, the company BigBasket’s 68% stake are supposed to be acquired by one of the leading multinational group of industries-the Tata group for Rupees 1.3 billion. The conglomerate has seen to be working on something called as a ‘superapp’ to mark its presence in the e-commerce markets which is currently dominated by Amazon and Flipkart. The deal is very important for Tata as it marks the the company’s way into the startup world and the digital world. Also, this deal is crucial as it eliminates China’s Alibaba’s more than 25% stake in the BigBasket group. The fact that Tata will get a customer base of BigBasket as well makes this very deal even more valuable and important.