With CLiQ, Tatas log on to e-commerce boom

Launch of e-tail venture is second out of three digital platforms planned

Cyrus Mistry, chairman of the $108-billion Tata group, bought an Ascort Shirt and an Oak & Keel T-Shirt on Friday.

This can be ignored as a photo-op gimmick for the launch of the group’s e-tail venture, Tata CLiQ. However, the interest of the chairman for the group of 100-plus companies goes beyond that.

“He spent a whole Sunday browsing TataCliQ.com when we first presented the site to him,” says K Rameshwar Singh Jamwal, executive director of Tata Industries, responsible for incubating this venture. “Then, he came up with various suggestions — description, interface and products.”  

Mistry is known as a hands-on chairman, ready to roll-up his sleeves to get into the business. He had, for instance, test-driven the Tata Motors sedan, Zest, before its launch. And, while TataCliQ seems rather small at present, it is in the eyes of Tata Sons, the group’s holding company, a critical part of the business strategy that can help enter the list of the 25 most valued companies of the world.  A vision expressed by Mistry in 2014, with an understanding that it cannot be done without going for e-commerce ventures.

Most firms in the coveted top-25 list are information technology product ones, such as Apple, Google, Microsoft and Oracle. Tata Group does not have any company dealing in technology products. The other type dominant in the top list is of younger e-commerce ventures like Amazon and Alibaba. This is where he sees the next wave of value creation.

"When the chairman came, he asked us to look at the digital space. We came up with these three e-commerce ventures," said Nirmalya Kumar, member of Tata Sons' group executive council, speaking to this news paper earlier. E-tail is the second venture out of the three. Last year, it launched a customer analytics venture for the group that can look for business from outside clients in future. The third venture is a health platform which will bring all sorts of service and product providers together.

This is because the group's assessment shows it will require a market cap of $350 billion to be able to match that of the world's 25th-most-valued company in 10 years. E-tail is a critical part of the strategy to achieve this.

"We are at the start of a digital revolution. Even today, it is at a very nascent stage in India, with less than one per cent of total sales being carried out digitally," says Kumar, a formerprofessor of marketing at London Business School.

He joined Mistry's Team-A two years earlier and is now spearheading the group's e-commerce plans, with three new ventures.

There also cannot be a better time for Tata Group to get into e-tail. There are 30-40 million regular online shoppers today. The pioneers of the business, both local and global, have already brought a shopping habit that TataCLiQ plans to ride on.

“There is immense potential to bring the next 100 million, with an offering that builds from their current path to the purchase, rather than expecting them to change behaviour,” said Ashutosh Pandey, chief executive officer, TataCLiq.com. “We aim to achieve this by plugging need gaps in store and online shopping with unique phygital (physical and digital) service.”

The omni-channel model of the e-tail venture has launched products from 12 partner brands across apparel, footwear and electronics, available across 500-plus stores.  

E-COMMERCE VENTURE
The Tata group launched on Friday, as it seeks to cash in on rising purchasing power

SEVERAL 100 MILLION DOLLARS
Cost the group said of the development of its Tata CLiQ website over a year and a half

MARKETPLACE
For in-house and partner companies to sell apparel and electronics

2ND PHASE IN E-COMMERCE
The move is in line with a second phase in e-commerce, with large corporations entering the sector