The past year has witnessed dynamic changes in several aspects and internet and mobile penetration has been a major phenomenon. This growth in the online space has led to major growth of internet-based companies in India, in turn, making them attractive for bigger, deep-pocketed businesses.
Several mega acquisitions have taken place in the past one year, the latest being the announcement made by Reliance Retail of acquiring a controlling stake in the home-grown online search engine platform Just Dial for Rs 3,497 crore.
Recently, Tata Sons’ subsidiary Tata Digital acquired a majority stake in Supermarket Grocery Supplies Private Ltd, the company which is better known as BigBasket.
Further, Tata Digital and Reliance Retail have acquired majority stakes in digital health companies 1MG Technologies Private Ltd (1MG) and Vitalic Health Pvt Ltd and its subsidiaries, collectively known as Netmeds, respectively.
Both the business houses which are betting big on the e-commerce space are adding these online companies to strengthen their respective online offerings.
Technopark Advisors Arvind Singhal, Chairman of Technopak Advisors noted that it is like “putting together a string of pearls” and completing the products and services you offer.
This larger interest in internet-based companies can be attributed to the business growth these ventures have witnessed amid the pandemic.
India’s internet economy is booming aided by a surge in smartphone penetration and declining internet costs. Internet penetration reached 56 per cent in January 2021 and the country’s internet economy is expected to grow from $250 billion in 2020 to $335 billion in 2025.
While Covid-19 has had a major impact on small-scale businesses, big technology companies have benefited from the ensuing digitisation wave.
“We estimate that the pandemic has hastened the digitisation process by 3-5 years as the use of technology became imperative for clients to survive and to capture future demand. In India, the pandemic has particularly fuelled demand in areas such as online entertainment, EdTech, ecommerce, FinTech, FoodTech, gaming and HealthTech.” said a report by BOB Capital Markets.
Source: IANS
