Tata to launch its e-commerce venture next month

The e-commerce venture will be an omni-channel branded marketplace to connect online and offline assets of companies

The $108-billion Tata Group will join a growing list of so-called brick-and-mortar companies seeking to tap the boom in the e-commerce sector by starting its own venture.

“We will launch our e-commerce venture next month,” said Nirmalya Kumar, member of the group executive council at Tata Sons on the sidelines of Insights 2020 CMO Masters Circle event in Mumbai on Wednesday.

On 16 October, Aditya Birla Group launched an online fashion store, www.abof.com, which offers shoppers brands of Aditya Birla Group and other companies.

Tata Group’s e-commerce venture will be an omni-channel branded marketplace, which will connect the online and offline assets of companies. The experience for consumers will be different from that offered by pure-play e-commerce companies, such as Amazon India, Flipkart and Snapdeal.

“What we have experienced so far is e-retail 1.0 with two different sets of people doing retail by themselves,” said K.R.S. Jamwal, executive director, Tata Industries Ltd, which houses e-commerce initiatives of the conglomerate, in an interview in September.

According to Jamwal, one set is pure-play e-tailers operating as though brick-and-mortar is going to come crashing down; the other set is retailers trying to do e-tail, by treating online commerce as another channel different from their brick-and-mortar businesses.

“What we will offer is e-retail 2.0. It is merging these two different sides because the reality on the ground is that much more integrated,” he said.

Some of Tata Group’s retail companies are guilty of committing the same mistake.

For instance, when Infiniti Retail Ltd, which operates the group’s electronics and consumer durables retail store chain Croma, had launched cromaretail.com in 2012, the website and the retail chain were treated as two separate entities. They had individual strategies in terms of deals available and were competing with each other.

The company gave it one integrated look across the portal and stores in July.

To be sure, it’s still early days for India’s e-tail industry.

E-commerce accounts for just about 2% of the overall sales of the retail sector. However, it is growing fast and is expected to account for 11% of the overall retail sales by 2019, according to Think India. Think Retail, a February report published by property advisor Knight Frank India Pvt. Ltd and lobby group Retailers Association of India.

In this rapidly growing market, the cost of not doing anything is very high, according to Ashvin Vellody, partner, digital advisory practice, KPMG India. “Online presence offers the young audience a convenient channel as they are comfortable with Internet and mobile. They don’t particularly focus on the experience at the physical stores,” said Vellody, adding it is still early days and a clearer picture of what models emerge will only be seen in the next 18-24 months.