Company Trend Analysis - Alibaba Bets On India's Online Grocery Segment - 08 JAN 2018

BMI View: India's online grocery segment will see strong growth to 2021 as food and non-alcoholic drinks spending increases and consumer s further embrace e-Commerce their shopping habits. Alibaba is the latest company entering India's booming e-commerce grocery market through its investment in India's largest online grocer, Big Basket.

Chinese e-commerce giant, Alibaba, is further extending its sphere of influence in Asia by investing USD300mn in Big Basket, India's largest online grocer. The deal, which has been approved by the Competition Commission of India, will give Alibaba and Alibaba-backed Paytm Mall a 35-40% stake in Big Basket. Prior to the deal, Amazon was also in talks to invest in Big Basket.

Alibaba's investment in India's online grocery market comes on the back of BMI's strong forecast growth in consumer spending on food and non-alcoholic drinks which is projected to grow by an average 10.3% over the medium term (2017-2021), with the segment predicted by BMI to be worth INR44.2trn in 2021, up from INR30.3trn in 2017. Indian households spend over 30% of their disposable income on food and non-alcoholic drinks.

Strong Growth Outlook For Grocery
India Food and Non-Alcoholic Drinks Spending, INRbn
e/f= BMI estimate/ forecast. Source: BMI/National Statistics

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