Marketplace Powerhouse Launches in India

India’s largest conglomerate, the 150-year-old Tata Group, finally entered e-commerce late last week, launching its online marketplace, Tata Cliq.

The US$108 billion multinational has operations spanning a range of industries including steel, healthcare, chemicals, automotive, hotels, telecommunications, real estate and defence.

Tata Group is also parent company for a range of retail operations in India including Tata Unistore, which will operate the new marketplace and retail chains Westside, Star Bazaar and Landmark.

Tata has entered the e-commerce market with a curated marketplace model focusing on apparel, footwear, electronics and jewellery. This means that unlike other prominent Indian marketplaces, such as Snapdeal and Flipkart, Tata Cliq will choose the products available through the marketplace, rather than opening the marketplace to any seller or product.

For a company with Tata’s vast resources, entering the e-commerce market using a curated marketplace model makes sense. The company will be able to leverage its significant bargaining power to deal directly with brands to create a more exclusive and trusted product range than most early-stage marketplaces.

According to Forbes India, the marketplace is set to become the sole authorised online seller of luxury goods brands including Giorgio Armani, Bottega Veneta, Burberry, Canali, Jimmy Choo, Hugo BOSS, Coach, Paul Smith and Tumi in India.

Tata’s deep pockets and extensive logistics network will also enable the marketplace to scale quickly, which is essential to getting an e-commerce marketplace off the ground. Its ability to quickly get brands on board will mean it should be able to quickly scale its customer base. Furthermore, Tata has a database of around 10 million customers, which it is hoping to tap into through its network of existing retailers.

Together with its bargaining power and customer database, Tata’s existing store network will enable the marketplace to pursue an omnichannel approach, allowing ship-from-store, click-and-collect and return-to-store options, as well as providing after-sales service. As well as helping customer service, this model will allow for significant cost savings. By leveraging its store network, Tata can avoid establishing a warehouse network, instead building inventory networks around existing stores.

While India’s major online marketplaces have been facing off with cut-price competition, incurring millions in losses, Tata said it will be focusing on profit margins and unit economic.

“We don’t want to get into the discount wars, we want to serve customers with great products and build a sustainable business,” said Chief Executive Ashutosh Pandey of Tata Unistore.

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