Tata Group to acquire GrocerMax, enter online grocery business

Tata Group, the salt to aviation behemoth of India, is expected to buy out the management team and technology infrastructure of Gurgaon-based GrocerMax to enter the online grocery business owing to consumers increasingly placing orders online for their supplies. The buyout 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. However, the startup will shut down its business in Gurgaon since the Tata group’s grocery business is not present in North India.

Food and groceries account for almost 50% of the overall retail basket in India which is a $500 billion market. Though the Tata group runs three formats under the Star banner—Dailies, Market and Hyper—and has around 42 stores, Tesco, the world’s third-largest retailer that has nearly 6,800 stores globally, its online business earns roughly GBP3 billion in sales and is one of the rare such ventures that’s profitable.

Founded by Gaurav Juneja and K Radhakrishnan two years ago, GrocerMax is a hybrid platform for grocery that keeps only 10% inventory, sourcing the rest from supermarkets and provisional stores in real time. The acquisition is termed positive by the analysts, with one commenting that “Having their established physical retail formats and expanding their digital presence would certainly help them having best of both worlds. At the same time, what’s important is right execution of omnichannel strategy by creating a USP in a competitive environment”.