Written By Writankar Mukherjee, ET Bureau
Analysts said Flipkart and Amazon together control over 90% of the Indian ecommerce market.
“A significant portion of Amazon and Flipkart’s capital infusion has gone into market acquisition. If that’s stripped out, then it’s possible to build an ecommerce business with lower investment. But the way it is now, anybody who wants a significant chunk of ecommerce needs to consider bring deep pockets to the business,” said Devangshu Dutta, chief executive at consultancy firm Third Eyesight.
The capital infusion into Tata UniStore was made by its two shareholders — Tata Industries, which owns 90%, and the group’s retail arm, Trent, which owns the balance 10% — through allotment of equity shares. The investment was made in various tranches while the last one was done on February 25, 2019, for Rs 38.6 crore, as per RoC documents.
In response to an email, Tata Industries executive director KRS Jamwal said Tata CLiQ’s strategic goal is sustainable profitable growth and the investments are in line with the demands of this industry. He said the company has taken a long-term perspective and wants to build a differentiated brand in the consumer’s mind with robust investments.
“Our enhanced product offering has received positive customer feedback. Along with our ‘phygital’ model, this has led to healthy growth last year.
We continue to focus on delivering unique brand experience backed by authenticity and quality,” said Jamwal.
A senior executive with a leading online focussed appliance maker said Tata CLiQ is creating conflict in the consumer’s mind with Tataowned Croma online storefront for smartphones and electronics.
“In fact, both the Tata online ventures are competing against each other,” he said. As per RoC filings, Tata UniStore’s total income in FY18 trebled to Rs 41.7 crore from Rs 13.5 crore, while loss increased more than 28% to Rs 208.4 crore from Rs 162.1 crore.