India’s oldest business house the Tata Group, is planning a big splash into India’s booming eCommerce market through the ‘Big App’ route. The $250 billion market already has Amazon and Reliance, India’s largest business house, battling it out, with the latter already launching the multi-purpose Jio Platform for online retail.
The multi-utility app, which is scheduled to launch in December or early in 2021, would bring together multiple consumer services owned by the group including the brick-and-mortar Croma Retail stores, a multi-brand option for all consumer electronics products in India.
The super apps business is new to India though companies such as WeChat had popularised it by offering multiple services including mobile payments, shopping, bill payments, cab bookings etc. through a single application. Apps like Grab and Meituan are already hugely popular in southeast Asia and China.
Croma Retail stores, which has an online store front, was launched in September of 2008 and preceded the likes of Reliance Digital. The brand currently boasts annual revenues in excess of $500 million with stores located in most of the tier-1 and tier-2 cities of India.
Other retail businesses that would get integrated with the new app includes the grocery store StarQuik and Tata CLIQ, which was founded by the group in 2016 as a store front for top-end electronics, fashion, footwear and accessories.
What prompted the move?
A report in the Financial Express quoted N Chandrasekharan, the chairman of Tata Sons, the holding company of the group, to state that the super app would have a plethora of apps functioning independently. “This is a big opportunity for us as the Tata Group, depending on how you count, touches several hundred million consumers across India, if you were to take only the consumers walking into a Tata facility.”
The on-ground situation
The Tata group runs a conglomerate that includes businesses such as steel plants, telecom services, and automobiles. The company had acquired Britain’s Jaguar Land Rover from Ford through a $2.3 billion payout in March 2008 after which the carmaker saw a marked improvement in production and revenues.
India’s eCommerce segment is currently witnessing a major battle between Amazon and the Mukesh Ambani-led Reliance Jio Platforms. The Indian group raised more than $15 billion in recent months, towards expanding the operations and reach of the company’s digital business.
Meanwhile, Jeff Bezos set aside $1 billion dollars in fresh investments for its India operations while promising to export more than $10 billion worth of Indian goods via the Amazon platform by 2025.
The one big challenge
While the Tata Sons Chairman N Chandrasekaran is optimistic about getting more than the requisite numbers to make digital purchases, he probably hasn’t reckoned the sort of head start that Amazon and its one-time arch-rival Walmart-owned Flipkart had in terms of stickiness and customer loyalty and social acceptance.
When Reliance entered the game, it did so with a slew of big deals that brought in not just the dollars but also a customer base that it could then cross-sell to. Take the case of Facebook, which not only paid the most for a stake in Jio Platforms, but will provide the group with considerable muscle in terms of its 400 million Indian users.
Amazon recently announced that this year’s Prime Day sales saw the highest ever SMBs (Small and Medium business) participation, with over 91,000 SMBs, artisans, weavers and women entrepreneurs from over 5,900 pin codes pushing their wares. Of these, more than 62,000 sellers were from non-metro and tier-2 and tier-3 cities.
It is into this well-established milieu, straddled by the world’s richest man and India’s richest man, that the country’s oldest business house is venturing. Watch this space as we track India’s big battle for online retail hegemony.