The Competition Commission of India (CCI) has accepted Zomato’s proposal for a 9.3% stake in Grofers, and this would be the food delivery aggregator’s first foray into online grocery retail.
“CCI has approved a proposed succession involving the acquisition by Zomato Limited (Zomato) of approximately 9.3 per cent stake in each of Grofers India Private Limited (Grofers India) and Hands-on Trades Private Limited (HoT) along with certain rights in each of the targets,”
CCI said in a statement on Friday
Zomato To Invest In Grofers India
Grofers is a key player in the online grocery retailing market. Zomato just invested $100 million for a minority investment in Grofers. The company aims to expand its app to include a supermarket delivery feature.
“Commission approves proposed acquisition by Zomato of approximately 9.3% stake in Grofers India and Hands-on Trades,” said CCI in a tweet.
Commission approves proposed acquisition by Zomato of approximately 9.3% stake in Grofers India and Hands on Trades pic.twitter.com/ZfzE8qnG1X
— CCI (@CCI_India) August 13, 2021
Details Of The Transaction
Zomato and Grofers applied to the Competition Commission last month to purchase a minority stake in the Gurugram-based startup. They have mentioned in the filing that the proposed transaction will not affect the competitive environment in Indian Market.
The transaction’s terms are still being worked out, but media reports say Grofers has signed a deal with Zomato and Tiger Global to raise $120 million. As the deal is valued at over $1 billion, Grofers will be included in the exclusive club of unicorns if it goes through.
Can Zomato Ace The Online Grocery Game?
It’s worth mentioning that Zomato is looking to re-enter the e-grocery market through Grofers. Swiggy, too, has been expanding Instamart to deliver groceries and other necessities in real-time.
There will be tough competition in this e-grocery game as giants like Tata-owned BigBasket and Reliance’s JioMart have a majority market share. We adore other online grocery delivery app like Swiggy, Dunzo, Amazon, and Flipkart because of their quick service.