Blog: Tata to take on online giants with e-commerce push
Katy Askew | 25 September 2014
Indian conglomerate Tata Group is reportedly planning a "big bang" entry into the Indian e-commerce space.
According to the Economic Times, Tata plans to develop its own version of Alibaba Group's marketplace model. The company will be pitting itself against the likes of Flipkart, Amazon India and Snapdeal in the market.
While details of the plans are scant, it is becoming increasingly clear that there is a significant opportunity to expand online retailing in emerging markets.
According to Chinese e-commerce giant Alibaba, infrastructure issues and an under-developed bricks-and-mortar retail sector will help to "leapfrog" consumers to online retailing, driving sector growth.
The company, which completed the largest IPO in history this week, said that consumers are increasingly looking online to meet needs that traditional retailers have been unable to respond to. E-tail also provides CPG firms with access to consumers outside the larger and more developed cities, circumventing some of the problems of distribution and opening up an area of strong consumption growth.
However, China and India are two very different markets in which to operate. China benefits from a rapidly expanding delivery sector, as well as good transport links and a strong infrastructure. In contrast, India's infrastructure, transport connections and roads are less well invested.
E-commerce models need to build consumer trust and reliable deliveries are a must: guaranteeing these in the Indian context could prove something of a challenge, even for the might of Tata.
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