A gathering in Mumbai in the last week of June set the ball rolling on the Tata Group’s ambitious digital plan to launch a Super App. Among those at the meeting held in the backdrop of the conglomerate’s annual general meeting were Tata Sons chairman N Chandrasekaran and Tata Digital chief executive Pratik Pal. Also present was Tata Digital’s newly designated president Mukesh Bansal, a startup entrepreneur who’s built companies such as fashion.
Having struck back-to-back deals to boost its consumer internet play through acquisitions such as BigBasket, 1mg, and Cultfit (which is currently a minority investment), the Tata Group is piecing together its first major foray into a new business area after its entry into the aviation sector in 2013.
Tata Digital, which will soon sell everything from groceries to electronics online through its soon-to-be-launched ‘super app’, is likely to offer financial services such as loans, insurance, and mutual funds.
The salt-to-steel conglomerate’s digital entity is touted as an ambitious omnichannel commerce platform that will go head-to-head with Amazon, Flipkart, and Reliance’s JioMart.
Tata Digital is scouting for strategic tie-ups with licensed banks and insurance companies to offer financial intermediation. These may include services such as credit card applications, insurance distribution, microloans, and even merchant management, fintech industry sources privy of the discussions told the business daily. A ‘super app’ is like a digital megastore where a user can buy anything from groceries to fashion apparel and medicines. The model was first perfected by China’s Ant Group and has since been emulated by Amazon, Walmart-owned Flipkart, and Paytm in India.
Some of the most popular names including online grocer BigBasket, online pharmacy startup 1mg have been acquired by the company for Tata’s super app.
With the super app in the making and expansion of digital business, Tata Sons is looking for investors to pump in money. The company reportedly approached global investors to raise an estimated $2-2.5 billion for its digital business as the company prepares for the pilot launch of its super app in Bengaluru in September.
Tata Sons chairman N Chandrasekaran met many investors during his recent US trip in May to showcase the group’s new venture, stated a report in The Economic Times. In the initial stage, PE funds are likely to be approached, following which strategic investors will be approached after the business sizes up.
Mukesh Bansal, the co-founder of fitness startup Curefit who joined Tata Digital as president is one of the key members of the fundraising team, stated the daily. Before Curefit, Bansal was associated with Myntra. After Myntra was acquired by Flipkart in 2014, he was the head of commerce in Flipkart.
Tata aims to expand the company’s digital footprint across businesses in order to compete with the likes of Amazon, Flipkart, and Reliance’s JioMart.
The conglomerate is working on a super app that will be a one-stop platform for e-commerce, financial services, fitness, lifestyle, fashion, etc. The app is likely to give loyalty points upon usage which can then be used to book a Vistara flight or stay at a Taj property, stated the daily.
Some of the most popular names including online grocer BigBasket, online pharmacy startup 1mg have been acquired by the company for Tata’s super app. Besides, the company will also integrate some of the existing digital businesses of the group including Tata Cliq.
The company seeks access to the digital financial services market
The next major acquisition by the Tata Group is likely to be in the fintech space as part of its strategy to build a super application.
The company is likely to acquire a stake in a payment gateway company or a payment wallet company, said two people in the know.
“Tata group is soon going to acquire a company which gives them access to the digital financial services market. They are exploring several companies and soon are likely to acquire one of them,” said one of the sources.
The Tata group plans to offer a host of products and services across e-commerce, financial services, fashion, lifestyle, among others, under the new super app platform. Tata Digital has been entrusted to build this platform and in the last few months the company has picked up majority stakes in a slew of online companies including BigBasket, Curefit, JustDial, Soulfull, 1mg, and now, reports suggest it is likely to acquire Dunzo as well.
A fintech expert, requesting anonymity, said acquiring a wallet or a payment gateway company has been on Tata’s cards for a very long time, and it is only inching closer to a deal with a player.
Reports have also suggested that the Tatas are likely to set up a neobank under the super app umbrella which will offer financial services including mutual funds.
A pilot version of Super App
The motive of this super app is to cross-sell and upsell the products and services and keep the customers hooked on the app. The app is expected to launch in September on a pilot basis. A team of 20 members is working on it.