The $ 106 billion conglomerate, but the e-commerce minnow, was much louder in discussions than market leader Amazon.com Inc in a July 3 meeting with government officials on proposals such as a ban on sales of own-brand or affiliate products, attendees said.
The rules would vastly increase the compliance burden on a conglomerate’s numerous entities and interests, and harm them far more than smaller rivals, Tata Vice President Poornima Sampath said at the online meeting, according to two attendees.
Tata declined to comment for this article. Sampath did not respond to a request for comment.
Two weeks earlier, the government spooked the industry by proposing greater scrutiny of the relationships between online marketplace operators and their partners.
The plan was widely seen as an attempt to curb Flipkart’s dominance of Amazon and Walmart Inc and support high street stores.
The 153-year-old conglomerate Tata is ubiquitous on India’s main streets, so its voice in favor of e-commerce at the July 3 meeting indicates the degree to which it is changing course.
The firm is arguably best known internationally as the owner of the British luxury car brand Jaguar Land Rover, but it also makes cars at home under its own brand.
The group is also active in steelmaking, IT outsourcing, and hotel and airline operations.
In the retail sector, Tata has a broad offline portfolio that includes a joint venture with coffee operator Starbucks Corp and the stores it operates for the Inditex Zara fashion brand. However, he is a minor gamer online, a situation he is determined to rectify, said five people with direct knowledge of his plans.
He bought most of the BigBasket online grocery store in May for over $ 1 billion and in June he took control of the 1mg online pharmacy. They are likely to join other major brands in an app Tata intends to test this year, three of the people said.
E-commerce is the next big thing for Tata, and with that in mind, it plans to buy many more brands, one of the people said.
Neither source was authorized to speak publicly, so she declined to be identified.
Tata’s latest digital push isn’t his first. It launched its Tata CliQ online marketplace in 2016, which posted sales of $ 36 million in 2019-20. However, that compares to roughly $ 10 billion at Amazon, which has invested billions of dollars in India.
Still, in an e-commerce market that is projected to be worth $ 200 billion by 2026, there is plenty of room for Tata to grow.
Through its app, Tata plans to unite its brands to offer services such as grocery shopping, food and drug delivery, electronics sales and online fitness packages, people familiar with its plans said.
Tata is still developing the app’s features and determining a go-to-market strategy, and the rollout will likely take place in phases, starting with a few large cities, one of the people said.
Another said the pilot could start in September in the southern city of Bengaluru, India’s IT hub.
Head application is Tata Digital CEO Pratik Pal, who gained extensive experience with retailers in 28 years in the IT outsourcing unit Tata Consultancy Services Ltd.
However, digitally integrating the multitude of businesses in a conglomerate the size of Tata Group is a daunting task, said Keyur Majmudar, managing partner at Bay Capital of India, adding that retaining customers in a super app will be difficult when there is a increase in several. niche ecommerce players.
“They need a radical change of thinking. That (digital integration) is something they have never done before. Therefore, the jury is still out,” he said.
Pal declined to comment.
Just as Tata’s new digital strategy accelerates with acquisitions and app development, the government has come up with a surprise that may mean a rethink before the app is put to the test.
A ban on markets offering affiliate products could prevent its electronics chain Croma and Starbucks from accessing Tata’s sites, Sampath said at the July 3 meeting, according to two attendees.
The ban on the sale of private label products has also raised questions about whether it will be able to retail its household names, such as Tata Tea or Tata Salt, on its e-commerce platform.
The Tata brand adds a level of safety for consumers, Sampath objected at the meeting, seeking clarity on the government’s policy plans, attendees said.