India’s Tata Group is in talks with potential investors about taking stakes in a new digital platform, people familiar with the matter said, seeking to modernize its consumer businesses as retail giants like Amazon.com Inc. and billionaire Mukesh Ambani pile into the country’s fledgling e-commerce market. This is as per a report by Bloomberg.
Tata Sons Pvt., the holding company of the $113 billion coffee-to-cars conglomerate, is working with advisers to explore bringing in financial or strategic investors, including global technology companies, the people said, asking not to be identified as they aren’t authorized to speak to the media. The group plans to bring together digital assets across various Tata businesses to create the new entity, according to the people.
Tata’s platform — an e-commerce gateway for its consumer products and services ranging from beverages to jewelry and resorts — may seek to compete with the ambitious plans of Ambani, Amazon and Walmart’s Indian venture Flipkart to tap the nascent market of more than 1 billion consumers.
Ambani, chairman of Reliance Industries, is looking to forge a digital empire, raising more than $20 billion from big-name partners including Facebook and Google for his newly formed technology venture, Jio Platforms.
Discussions with potential investors are at a very early stage and there’s no certainty they will result in a deal, the people said.
Adding Heft
While bringing in outside investors would lend credence to Tata’s digital ambitions, it may also help the group pare debt after the coronavirus pandemic hammered its flagship businesses.
Tata Group already has a bunch of entrenched consumer businesses, many of which also have an online presence. These include Tanishq’s jewelry stores, Titan watch showrooms, Star Bazaar supermarkets, chain of Taj hotels and a joint venture with Starbucks in India. The intention is to consolidate these currently fragmented web operations.
As part of that drive, the conglomerate is building an all-in-one e-commerce app for its swathe of consumer products and services, Bloomberg News reported last month. It is expected to be launched by end-2020 or early next year.
Natarajan Chandrasekaran, Tata Sons’ chairman and a long time chief executive officer of Tata Consultancy Services Ltd. before that, is championing the group’s digitization drive and Tata Digital’s head Pratik Pal is in charge of building this all-in-one app, a person said last month.
Pal has three decades of experience at TCS, where he was global head of retail, and helped with the digital transformation of some of the world’s largest retail chains including Walmart, Tesco, Aldi, Target, Best Buy and Marks & Spencer Group.