Tata Group to acquire GrocerMax

The Tata Group is buying out the management team and technology infrastructure of Gurgaon based GrocerMax to enter the online grocery business as consumers increasingly place orders for their supplies over the internet.

The new team will help set up the online platform for Trent Hypermarket, an equal joint venture between Tata and British retailer Tesco that will rival Amazon and Bigbasket in the nascent yet rapidly growing segment. GrocerMax will shut down its business in Gurgaon because the Tata group's grocery business is not present in North India. The Tata Group runs three formats under the Star Banner – Dailies, Market and Hyper and has around 42 stores.

For Tesco, the world’s third largest retailer has nearly 6,800 stores globally, its online business earns roughly 3 Billion in sales and is one of the rare such ventures that’s profitable. But the opportunity offered by the $500 Billion retail market is attractive for any player, foreign or local. Food and grocery account for almost 50% of the overall retail basket in India, although general merchandise, personal and home products fill up a bulk of the retailer’s profit pool.

Experts feel omnichannel retail offers consumers more ways to shop and interact with a retailer. GrocerMax is a hybrid platform for grocery that keeps only 10% inventory, sourcing the rest from supermarkets and provisional stores in real time. The online grocery space in India, which has seen a minor shakeout over the past year, has attracted more players as well. While LocalBanya and PepperTap suspended operations, Grofers shut in multiple cities.

BigBasket acquires Delyver

Founded in December 2011, BigBasket is an online grocery store. BigBasket has acquired logistics startup Delyver in a cash and stock transaction to bolster its capacity to deliver fast and compete with agile players in the segment like Grofers, PepperTap and LocalBanya. BigBasket will employ Delyver orders in 90 minutes.

BigBasket is likely to leverage Delyver expertise in hyper local delivery to roll out one hour delivery services in the six cities in which it is present i.e. Bengaluru, Hyderabad, Chennai, Delhi, Pune, and Mumbai. It was a cash and stock deal with 50% of the amount being paid in cash. Delyver will continue to operate as a separate business while Big Basket will deploy its fleet of two-wheelers to facilitate timely delivery.

Delyver will scale to the 50 cities as and when Big Basket enters a new market. Delyver specializes in delivering orders within one hour from stores across categories such as food, vegetables and flowers. It will continue with its existing categories instead of restricting itself to just groceries. The hyper local avenue is witnessing a surge of innovations as more and more players are entering the field.

With technology snowballing or advancing to higher levels, the scope for these players is rendered wide open; the potential of this segment is estimated to be so high that even the big fish in the market have registered themselves to compete. While Amazon India has already made an entry into the Indian market with its Kirana Now, Ola has started its pilot project to deliver groceries.