On August 13, 2021, CCI approved the acquisition of approximately 9.3% shareholding in each of Grofers India Private Limited (‘Grofers’) and Hands on Trades Private Limited (‘HoT’) by Zomato Limited (‘Zomato’). Additionally, under the proposed transaction Zomato would also have one board seat as well as affirmative voting rights (‘AVRs’) in Grofers International Pte. Ltd. (‘Grofers International’), Grofers India and HoT (collectively referred to as ‘Target’).^[1]

Zomato is primarily involved in the food services market and operates a platform that connects customers, restaurant partners and delivery partners. Zomato’s subsidiary, Zomato Internet Private Limited, also operates Hyperpure, which supplies fresh, high quality ingredients (such as vegetables, fruits, meats, etc.) primarily to Zomato’s restaurant partners. Grofers operates a platform between third-party sellers of products (such as grocery, fruits and vegetables, bakery items, personal care, health and hygiene, pet care, baby care, etc.) and consumers. HoT is engaged in the business of business to business (‘B2B’) wholesale trading with third-party merchants; contract manufacturing of grocery, food-related products and other goods for the purpose of onward sale on a wholesale basis; and providing warehousing services including storage of grocery goods and food-related products to third-party merchants.

CCI identified the following relevant markets for their competition assessment: (a) the market for supply of groceries, household items, general merchandise, personal hygiene products, fruits  and vegetables in India (‘Broad Relevant Market’); (b) narrower segment of B2B supply  of groceries, household items, general merchandise, personal hygiene products, fruits and  vegetables in India (‘Narrower Relevant Segment’); (c) further narrower categories, i.e., market for supply of groceries, fruits and vegetable in India (‘Narrowest Relevant Segment’); and (d) the market for services provided by online platforms for the sale of groceries, household items, general merchandise, personal hygiene products, fruits and vegetables in India (‘Online Marketplace Market’).

CCI found that the combined market shares of the parties in the Broad Relevant Market, Narrower Relevant Segment and Narrowest Relevant Segment were less than 1%. In the Online Marketplace Market, the combined market shares of the parties were in the range of 10-15 %; however, the incremental market share was less than 1%. Further, there were other established competitors in the Narrower Relevant Segment such as Metro, Walmart, and Indiamart, and in the Online Marketplace Market, such as BigBazaar, Bigbasket, Amazon, and Flipkart, who would continue to pose competitive constraints on the parties post the proposed transaction. Therefore, after considering the materials on record, CCI decided to approve the proposed transaction.

[1] Combination Registration No. C-2021/06/847.