You could soon order ‘everything’ from Tata’s SuperApp; This mean Tata Group poised to take on Amazon and Reliance’s Jio retail ops.
- India’s Tata Group, the whopping $111 billion luxury cars to tea empire, is building an all-in-one e-commerce ‘Super App’ for its swathe of consumer products & services. A launch is expected soon.
- Tata Digital is all set to acquire up to 64.3 per cent of BigBasket and its sole control over Innovative Retail Concepts that runs the online grocery company.
- Tata Digital To acquire Just Dial; already, a first-round Of discussion is in progress.
- Tata Group’s watch company to add 100 sales outlets across GCC in 2021, including five exclusive outlets in the UAE.
Just as the Chinese billionaire duo of Pony Ma and Jack Ma has carved up a significant chunk of their country’s entire internet businesses, could a battle for control of 1.3 billion Indians’ data become a three or four-horse race? Also, if Walmart comes on board, Tata may get access to both the U.S. retailer’s India e-commerce website Flipkart, which it bought for $16 billion, and PhonePe, a payment service. With a ‘SuperApp’ expected to launch soon, does it mean Tata Group is assured to take on Reliance Industries and Amazon?
Tata Digital has been in discussions with multiple partners and is finalizing the Super App. This app is all set to offer consumers many services and products ranging from education, digital content, fashion and beauty, insurance and financial services, and so much more under a single platform.
Now, Tata Group’s ambitions for its Super App plan have received a shot in the arm. With the competition regulator giving the go-ahead for Tata Digital’s acquisition of BigBasket, one of the country’s leading online grocery platforms. This is giving BigBasket a post-money valuation of $1.8 billion as the deal is pegged at $1.2 billion. Interestingly, a report claims Tata Digital is also in talks and quite close to buying a majority stake in the e-pharmacy player 1mg.
The app was expected to launch on March 3, the Tata Group’s Founders Day, but has been delayed because it was waiting to acquire BigBasket. Initially, the salt-to-steel conglomerate had planned to launch the app in late 2020.
Watch: Can the Tata-Bigbasket deal change the contours of India’s e-grocery segment?
Tata’s latest acquisition BigBasket competes with influential players like Amazon, Grofers, JioMart, Swiggy’s Instamart, and Flipkart. According to a January 2021 report by RedSeer, the Indian grocery sector is an $850 billion market, with groceries accounting for 66 percent of India’s total retail spend. Ninety-five percent of the Indian grocery market is led by local Kirana stores or mom-and-pop shops.
Now, online grocery platforms seem to be disrupting the grocery space and creating a wide range of products, brands, and SKUs (stock-keeping units) on the back of a simplified supply chain tech-enabled retail layer. E-grocery, an essential focussed e-commerce category, benefited a big way after the Covid-19 pandemic, as most people prefer to shop online, staying at home. The online grocery market is expected to penetrate 3 percent of the total opportunity in 2025.
Tata Group’s Super-App Strategy
The Tata Group has vast ambitions for the e-commerce space, currently dominated by Amazon, with Reliance Industries also expanding aggressively through JioMart, and Walmart-owned Flipkart. It is building the super app under Tata Digital. It also plans to gain leverage from its group companies such as Titan, Trent, Voltas, Tata Consumer Products, Vistara, Tata Motors, Tata AIG, Taj Hotels, and Tata Capital, an array of services in one app.
Despite being the most significant contributor to the retail basket of Indian consumers, grocery’s online penetration so far has been limited in comparison with other categories such as fashion and gadgets.
Meanwhile, the pandemic appears to have given a significant push to the category. It recorded a gross merchandise value (GMV) of $3.3 billion in 2020 compared to a GMV of $1.9 billion in 2019. Also, the overall segment is set to grow further mainly because these influential players compete to onboard more and more consumers online.
In addition, the giant is gearing up to further leverage the 100,000 paid B2B subscribers to sell J.D. mart, as revealed by a report by financial services firm UBS and Tata Group’s 140 million quarterly unique users.
Reportedly, Tata Group has also been mentioned to be in talks with IndiaMart as well in the recent past though the company has declined these reports. Tata Digital is working towards creating verticals for several services that include grocery, dairy, pharmacy, medical consultation, education, logistics, lifestyle, beauty, consumer finance, insurance, and payment options. Additionally, some other consumer-facing online units will also be incorporated into Tata Digital, such as Tata Health App, Tata Cliq, ready-to-eat business Tata Q, and Tata Class Edge, which is about educational services.
The Four-Horse Race to top India’s Retail Space
In the epic battle between the Ambani and Bezos to be on top of the retail game in India, the country is also witnessing how Walmart-backed-Flipkart with its massive experience, territorial reach, technology, and capital is leaving an impression on the big players. Analysts now turn a keen eye and watch Tata Group, one of India’s oldest and most trusted business houses and its latest gain with BigBasket acquisition can ramp up the fight.
Does this mean Tata Group could be poised to be a bigger challenge to Amazon, RIL and Flipkart?