BigBasket plans to invest up to ₹90 crore to recruit hundreds more farmers to its network, beefing up its supply chain ahead of the potential entry of deep-pocketed global corporations such as Walmart and Amazon into India's online grocery market.
The investment, which follows a $150-million (about ₹1,000 crore) fundraise in March, will be directed at building networks of farmers who will primarily supply fruits and vegetables, which account for about 20% of BigBasket's revenue, and business seems to be growing at 10% every month.
Tying up directly with farmers will allow for bigger operating margins and better control over quality .
While 100% FDI has been allowed in the food sector, there is not much clarity on how it will apply to multibrand entities.
Also, under existing provisions, Walmart is a multinational retailer with physical stores and is not allowed to sell directly to consumers.
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