INDIA – The ongoing Covid-19 pandemic induced lock down has let Indians discover the convenience of shopping for food and groceries online leading to a surge in demand.
BigBasket, one of the leading online grocer in the country says that the company is getting a lot of traffic without splurging anything on marketing and promotions as a lot of people who would have never used an online service are now ordering online.
To support the Bengaluru-based firm with the much-needed capital, BigBasket has raised US$50-60 million in a bridge round led by Alibaba and other existing investors, according to four people familiar with the matter cited by EnTracker.
Other investors that participated in the funding round include South Korean investment firm Mirae Asset and UK’s development finance institution CDC Group.
The online grocer, which has recently entered into multiple partnerships with retailers in the country, said the investment was “a much-needed capital for BigBasket that has been witnessing a surge in demand due to Covid-19.”
A recent report by Economic Times reveal that BigBaket has seen demand for groceries rise three to five times from a normal business day following the ongoing 21-day nationwide lockdown due to the COVID-19 virus outbreak.
Its milk subscription vertical BBDaily has also grown at a quick pace which clocks close to 1.8 lakh daily orders. BigBasket had acquired three firms in the space including DailyNinja and RainCan to bolster BB Daily.
Online food major, Swiggy has also raised US$43 million as part of its ongoing Series I round led by Chinese tech giant Tencent in addition to new investors; Ark Impact, Korea Investment Partners, Samsung Ventures and Mirae Asset Capital Markets who also participated in the round.
The Series I round, which was initiated in February this year, had earlier raised US$113 million, led by existing investor Prosus along with participation from Meituan Dianping and Wellington Management Company.
Swiggy said that it intends use the funds to further develop and expand its business beyond food delivery.
Swiggy’s closest competitor, Zomato has also raised US$5 million as part of its ongoing Series J financing round from an affiliate of British investment manager Baillie Gifford.
However, online food delivery platforms in India are battling tough economic times due to the Coronavirus induced crisis – contrary to online groceries delivery companies.
Media reports reveal that online food delivery orders for Zomato and Swiggy have seen their orders plunge to as much as 70% to under 1 million a day in the recent past as most hotels and restaurants have temporarily shut operations.
To cushion the business from the economic downturn, Zomato has started delivering groceries online under its new initiative ‘Zomato Market’. The new initiative is expected to benefit Zomato from the surging demand of online grocery orders.
Zomato, Meesho, Shopclues and NoBroker are among a slew of internet businesses that have diversified into online grocery space for survival.
Industry experts believe that the rising demand of online grocery orders will lead to behavioral changes which will in turn boost the sector in the long run.