Let’s Get PHYGITAL: Tata Enters the E-Commerce Space With CLiQ

Tata enters the e-commerce space with it’s physical and digital platform – CLiQ.

I reached the Tata Group editors meet late. But the Tata Group believes latecomers have the opportunity to leverage technology developments better. That’s how it explains its late arrival to e-commerce. The meet was to describe Tata CLiQ… yup cute…but late.

The thing about covering product or service launches, especially digital ones, is that the article risks sounding either PR-ish or needlessly sceptical. I run that risk here. Simply because there’s no way to tell if Tata CLiQ will, well, click!

In an age when GMVs are out and NPS is in but not good enough, when reach and engagement get better valuations than good old profits, no one set of metrics can help assess a venture’s viability. So instead I’m just going to list some key features of this new ventures and leave it up to shoppers to judge.

What is Tata CLiQ?

It’s an omni-channel, e-commerce platform owned 90% by Tata Industries and 10% by Trent.

It reaches 101 cities and covers 7000 pin-codes.

It’s a branded portal – it will focus on retailing brands not just products.

400 brands have signed up, of which 25 are Tata Group brands

It’s a curated marketplace - any Tom, Dick and Harry brand or product can’t retail on CLiQ. It will police the entry of brands available on the platform.

CLiQ will focus on Electronics, Apparel and Footwear – categories that constitute 70% of the e-commerce market.

It’s strategy is PHYGITAL: a customer experience that combines digital and brick & mortar.

For instance, a customer can reserve a product online and walk into a store to buy it. I’m not sure why someone would rather not have it delivered home but what do I know because my colleague Nandagopal Nair was reading through this article and said he prefers to shop online and try offline.

Another illustration Tata officials offered – a customer walks into a store, likes a shirt but can’t get the colour she wants. She can then buy the preferred colour online. Again, I don’t get why the same person won’t prefer to shop online in the first place.

The bit I do get about the PHYGITAL strategy is that leveraging physical retail networks can offer better customer service in the case of a defective product or a return. And that each brand store becomes a distribution point and helps reduce warehousing costs and substantially improve delivery speeds.

15 brands are currently running the Phygital pilot. Only 2 of them are Tata brands – Chroma & Westside. The others include KKCL (Killer jeans), Metro, Mochi and the CLiQ team is in talks with Dell as well.

The Tata Advantage

20 million customers are members of loyalty programmes across the various Tata group brands. And the group boasts of 10 million ecommerce customers across its various brands. But there’s no guarantee that all or any of them will migrate to CLiQ. Most Tata brands will continue their individual e-commerce platforms so some cannibalisation is inevitable. Westside will retail exclusively to CLiQ.

TCS is the technology partner to CLiQ and Trent brands such as Westside helped in creating the retail experience

And that brings me to the last point, money, which is where I began as well.

Tata Industries offered no specific investment numbers. KRS Jamwal, Executive Director, Tata Industries says the Tata Group has the capacity to invest in hundreds of millions of dollars. Yeah, we knew that already. No details on sales targets or success metrics either. He said the metric to watch is the ‘margin after variable costs’. Sir, we’ll be watching all kinds of margins.

There was much debate at the meet on whether CLiQ will follow the deep discounting strategy that other marketplaces have in the past to acquire customers. Jamwal and Tata CLiQ CEO Ashutosh Pandey insisted discounts would be used tactically not strategically. Luckily for them, the new FDI regulations have taken some bite out of the year round sale seasons.

So there you have it. One of India’s oldest business houses is entering the hottest new business of digital commerce.

Will it succeed?

In the democracy that is digital you get to decide that.