Mumbai: The 148-year-old Tata group on Friday became the youngest entrant into India’s $20 billion e-commerce market, launching TataCLiQ.com, which will sell apparel, electronics and footwear among others.
Customers can order online on TataCLiQ and get the items home-delivered, or pick them up at designated stores, a model the company calls “phygital”, a combination of physical and digital.
Tata group chairman Cyrus P. Mistry, 47, inaugurated the portal by making an online order and picking up his item from Tata-owned Westside store at Mumbai’s Kala Ghoda.
TataCLiQ.com offers a curated range of top brands, including several exclusive ones. It also offers a host of international fashion and luxury labels which are not easily accessible online.
The e-commerce market will account for 2.5% of India’s gross domestic product by 2030, growing 15 times and reaching $300 billion, a Goldman Sachs report said in May.
TataCLiQ.com is a step in a new direction for Tata as the salt-to-steel conglomerate has typically focused on physical stores.
In 2015, Mistry, while addressing Tata group executives, had said that the $108 billion Tata group would need to maintain its success in a changing world marked by global volatility and a steady shift towards a digital future.
To be sure, Mistry has started two digital platforms for healthcare services and Big Data analytics. But TataCLiQ.com is its most ambitious plan yet.
E-tail in India is growing at a faster clip than brick-and-mortar retail. The share of modern trade will slip from 17% in 2013 to 13% in 2019, while that of e-commerce companies will jump from 2% to 11% in the same period, according to a February report published by property consultant and advisor Knight Frank India Pvt. Ltd and lobby group Retailers Association of India.
Ashutosh Pandey, chief executive officer, TataCLiQ.com, said the portal would be the first-of-its-kind multi-brand phygital (physical cum digital) e-commerce marketplace that will blend online and in-store shopping experience for customers.
Under the so-called phygital model, the e-commerce portal will offer services such as clicking online and picking up at the store, returning to store and shipping from a store network of partner brands.
In other words, the customer can order from anywhere and choose to get it delivered to their doorstep or pick it up from a partner store. If they wish to return their order, they do not have to wait for a return pick-up and can just walk into the nearest partner store for an instant return or exchange. Such services will be available across 500 plus stores of 12 partner brands at launch.
TataCLiQ.com services will be available in the launch phase in 6,856 pincodes across 689 cities and towns and 23 states and two Union Territories.
This reach would be significantly enhanced in the coming weeks and months, Pandey said.
“Currently, there are only 30 million regular online shoppers in India and there is immense potential to bring the next 100 million with an offering that builds from their current path to purchase rather than expecting them to change behaviour. TataCLiQ.com aims to achieve this by plugging need gaps across instore and online shopping with its unique phygital services and certified authentic merchandise that invokes consumer trust and builds loyalty,” said Pandey.
Pandey said the firm is not in an illusion that all consumers will migrate to TataCLiQ.com on day one. While work on the portal had started around 18 months ago, the mandate from Tata group was clear—this is the business for keeps.
“Hence, the foundation has to be deep. We have two metrics—Ebidta (earnings before interest, depreciation, tax and amortization) and margins after variable cost—to focus on. There is a role of discounts so that customers can come again and not just shop once,” Pandey said.
Tata Unistore Ltd, a Tata Industries Ltd-incubated business venture, created the portal.
Over 200,000 products have been curated for launch across 400 brands, with prices starting from Rs.99.
“At the Tata group, we have a rich heritage of pioneering initiatives. TataCLiQ.com, a first-of-its-kind phygital e-commerce marketplace brings to India a smart combination of the reassurance and in-store experience of a large on-ground network with the convenience of online shopping, bringing the best of both worlds together,” Mistry said.
At present, the Phygital experience will be available with Westside, Croma, Killer, Jack & Jones, Vero Moda, Only, Metro and Mochi, totalling over 500 stores.
K.R.S. Jamwal, executive director, Tata Industries, said phygital play can be a massive game changer in the e-commerce sector, significantly enhancing the customer experience while reducing logistics and delivery costs for viable unit economics and a long term sustainable profitable business.
“With rapidly changing technology and consumer preferences, this is just the beginning and we intend to continue to innovate on technology, personalization and logistics. Our focus would be to delight the consumer by creating a shopping experience that is seamless, brand-centric and delivered faster to the customer,” Jamwal said.
It plans to scale up phygital operations to more than 2,000 stores bringing many more categories, brands and features in the coming months.
Jamwal said Tatas don’t get into a business for immediate valuation game and are not looking for investors.
“We want to focus on multiple levers that help profitable unit economics in terms of per order and per consumer,” he added.
Tata group is not alone.
Conglomerates have been firming up plans for a slice of the fast expanding e-tailing sector. In September 2015, the Mahindra Group announced plans to launch its e-commerce venture M2ALL.com, which will offer the entire range of Mahindra products and services. It will be operated through a separate wholly-owned subsidiary called e-Marketplace Pvt. Ltd.
In October 2015, the Aditya Birla Group launched an online fashion store, joining the growing trend of brick-and-mortar companies moving online. The portal www.abof.com offers shoppers brands from both the Aditya Birla Group and other companies. Reliance Industries Ltd is planning its own e-commerce business.
“Anything can go wrong in this,” Pandey cautioned referring to TataCLiQ.com. “It is a new model hugely dependent on partner brands,” Pandey added.