Alibaba may pump in up to $300 million in online grocery player BigBasket, according to industry sources.
The deal, which is expected to be announced in the next few weeks, will give BigBasket more muscle to compete against rivals such as Grofers and e-tailing giant Amazon, they said.
The sources did not wish to be identified as the discussions are private.
BigBasket and Alibaba did not respond to emails.
In November, the Chinese e-commerce major had sought approval of the Competition Commission of India (CCI) for acquiring a stake in BigBasket.
Investing in BigBasket will help Alibaba add more muscle to take on US-based rival Amazon.
Amazon India has received the government’s approval for its proposed $500-million investment in food retail. It is also ramping up its business in the segment with Amazon Pantry and Amazon Now.
BigBasket has operations in Bengaluru, Hyderabad, Pune, Mumbai, Chennai, Delhi-NCR, Ahmedabad, Patna, Kolkata, Jaipur, Vijayawada, Indore, Punjab and Lucknow.
The company has raised over $200 million from investors including The Abraaj Group, Bessemer Venture Partners, GrowthStory, Helion Venture Partners, IFC and Sands Capital.
With people becoming comfortable buying even milk and bread online, the online grocery segment is projected to witness a strong growth over the next few years.
According to a report by Franchise India, online grocery is expected to be a ₹2.7-billion market by 2018-19.