Indian multinational conglomerate Tata Group is jumping on the eCommerce bandwagon with the launch of Tata CLiQ, an apparel and electronics shopping website.
Tata’s investment in the eCommerce website comes at a time when international investors are increasingly focussing on the Indian market as the Chinese economy subsides. The company is hoping to monetize the rapidly growing eCommerce market that is expected to be worth $220 billion by 2025, compared to $11 billion last year, according to a Bank of America Merrill Lynch estimate.
Local players, like Flipkart and Snapdeal, are some examples of eCommerce retailers that are fast capturing India’s appetite for online shopping.
Tata’s late entry into the space, however, might prove to be an uphill battle. Recently, some of India’s top commerce giants, like Aditya Birla Group, Reliance Industries and Mahindra and Mahindra Ltd., also launched their own online retail platforms.
International players, like Amazon, already seem have to built up a strong foothold in the country. Just in 2013, the company invested over $2 billion to accelerate its growth and compete with local eCommerce merchants, Reuters reported.
But with multiple players in the market, the competition is quickly ramping up and, with that, is the rush to improve sales through discounts. Tata, however, says it doesn’t plan on giving into the race to boost sales and collect razor-thin margins.
“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, parent of the operator of Tata CLiQ.
The company said it plans on using its partner merchant network to build a sturdy supply chain, instead of investing big money in warehouses — a path which its top competitors have taken.