Tata Group Plans Retail Push with All-in-One Digital Platform, Looks for Potential Investors

Tata Group, the Indian multinational conglomerate holding company is in talks with potential investors about taking stakes in a new digital platform, seeking to modernize its consumer businesses as retail giants like Amazon.com Inc. and billionaire Mukesh D. Ambani pile into the country’s fledgling e-commerce market. The group is planning to create new digital platform and a super app to bring its wide range of offerings under one space. Tata Group is currently in talks with potential investors to pick up stakes in the online platform and Walmart could pick a large piece of the pie.

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.

A Tata Sons representative declined to comment on the stake sale discussions. 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 Mukesh D. Ambani, Amazon.com and Walmart Inc.’s Indian venture Flipkart to tap the nascent market of more than one billion consumers. Mukesh D. Ambani, Chairman of Reliance Industries Ltd., is looking to forge a digital empire, raising more than $20 billion from big-name partners including Facebook Inc. and Google for his newly formed technology venture, Jio Platforms Ltd. Discussions with potential investors are at a very early stage and there’s no certainty they will result in a deal, the people said.

According to reports, Walmart is also in talks with Tata Group for a stake in its new platform. The proposed ‘large’ stake could see Walmart pumping in $20-25 billion, overtaking its 66 percent stake purchase of Flipkart for $16 billion in 2018. If this follows through then the super app could be a joint venture between Tata and Walmart.

Bringing in outside investors will not just lend credence to Tata’s digital ambitions, it will also help the group to deal with the debt after the coronavirus pandemic hammered its flagship businesses. Tata Steel Ltd.’s group net debt was at $14 billion as of June 30, while the net automotive debt of Tata Motors Ltd., which owns Jaguar Land Rover, was around 480 billion ($6.5 billion).

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. The group has the largest franchise of own-brands, as compared to Jio and Amazon.

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