Bengaluru-based grocery platform Town Essential has served an INR 231 Cr notice to fellow online grocery stores BigBasket and DailyNinja, accusing the latter of breach of a contract between the two parties.
In October 2017, Town Essential had signed a contract with DailyNinja to be its exclusive backend supplier and procurement partner. The contract is said to have remained valid after BigBasket’s acquisition of DailyNinja in March last year.
However, after being acquired, DailyNinja claimed that Town Essential would have to raise its billing volume to stay on as a partner. Post the acquisition, BigBasket had started directing DailyNinja customers to BBDaily, BigBasket’s subscription delivery service.
In its notice, Town Essentials has claimed losses, asking BigBasket and DailyNinja to pay INR 6 Cr for “lawful termination of the contract”, INR 200 Cr for “wrongful loss of growth opportunity”, and INR 25 Cr for “harassment” and “cheating”, according to the notice.
BigBasket declined to comment on the development.
“The ongoing contract with Daily Ninja stated that Town Essentials will be an exclusive partner to Daily Ninja until it delivers a certain volume of business to us. During the transition of the acquisition and the lockdown when the supply chain was disrupted, DailyNinja continued to leverage our logistics strength and has ever since been systematically cutting us off with no proactive intimation that BigBasket has been onboarded as new supply partners,” a Town Essentials spokesperson told Mint, which first reported the development.
The spokesperson added that due to the losses, Town Essential had to sell its infrastructure and customers Greens Towness Pvt. Ltd., a subsidiary of Greens Foodcraft India Pvt Ltd, a Bengaluru-based agriculture food company, in December.
Meanwhile, Tata Group has been reported to be in advanced talks for acquiring BigBasket, valuing the online grocer at $1.6 Bn. In the fiscal year 2019-20 (FY20), BigBasket’s revenue grew 36% year-on-year (YoY) to INR 3,818 Cr. However, expenses also grew 31% to INR 4,411 Cr, which meant that the company saw its loss grow 26% to INR 710 Cr.