The Tatas and Walmart may jointly take on Reliance and Amazon for dominance over the Indian retail market and the right to mine data generated by 500-million-plus Indian Net users.
India may be the battleground for the mother of all retail wars in the free world. With India's largest business conglomerate, the Tata Group, planning to launch a super-app in December-January, the stage looks set for a mouth-watering battle for Indian consumer wallets between the $113-billion House of Tatas and Mukesh Ambani's Reliance Retail-Jio platforms combine.
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Throw US retail giants Amazon.com and Walmart into the mix and all the ingredients of an epic corporate battle will be in place.
The Tata Group is planning to launch a “super app” that will provide consumers access to all the consumer offerings from its 100-plus group companies spanning consumer goods, watches, jewellery, eyewear, fashion, tea, coffee, fashion, financial services and healthcare, among many other items.
“It will be a super app, a lot of apps in apps and so on. We have a very big opportunity,” N Chandrasekaran, Chairman of Tata Sons, the holding company of the group, told the media.
“The Tata Group, depending upon how you count, touches several hundred million consumers in India, if you take consumers who are walking in everyday into a Tata facility... How do we give a simple online experience connecting all of this, and at the same time a beautiful omnichannel experience That is the vision,” he told the London-based Financial Times.
This comes close on the heels of Ambani, Asia's richest man and the world's fourth richest, attracting $22 billion in investments from Facebook, Google and a host of PE and sovereign wealth funds in his technology and telecom company Jio Platforms and another $4.4 billion and counting in Reliance Retail, India's largest retailer.
Making this battle royale between India's largest business house and the country's largest single company is the news that Walmart, the world's largest retailer, is planning to invest $25 billion in the Tata super app for an up to 50 per cent stake in the venture. If the deal, that values the super app at $50-60 billion, takes place, it will be largest ever transaction in the Indian retail space, eclipsing Walmart's $16-billion acquisition of Flipkart, then India's largest homegrown online retailer, in 2016.
In some ways, this battle for supremacy in the Indian retail space promises to reprise a similar battle for dominance of the Chinese market between Jack Ma's Alibaba and Pony Ma's Tencent-WeChat. But the Chinese retail market, both physical and online is closed to foreign investors. India is, therefore, the only market in the world with a billion-plus consumers that remains largely untapped.
The potential is massive. According to a Goldman Sachs report, the Indian online retail market will grow 15 times over the next decade to $300 billion. But even that figure will barely be scratching the surface as the Indian GDP, currently at $3 trillion, could cross the $10-trillion mark by then.
That's what is drawing two of the world's biggest retailers and India's two largest business houses into what is shaping up to be a three-way fight between market leader Reliance Retail and challengers Amazon and the Tata-Walmart combine.
There is an important sub-text in this fight for consumers - dominance over the billions of points of data being generated everyday by Indian consumers.
This data can be accessed individually or in aggregate to create data banks that can become goldmines for profit by those that have access to this data. With more than half a billion Net users - and counting, experts say there is a need to ensure that this data is mined for Indian and not foreign interest.
With the Indian government clamping down on transfer of this data to servers located outside the country, this tie-up between the Tatas and Walmart will give the US mega-retailer access to Indian data without violating any laws or getting into an unseemly spat with the authorities.
As the world's largest democracy and a major generator of data, India remains a key global influencer of technology industry norms, a growing global player in this sector and a large market for international tech majors. So, despite the murmurs of protest at the end of their data monopoly, as a result of new Indian rules on data, Western tech majors are hedging their bets.