To Fuse or Not to Fuse? — The Bombay House Conundrum
Tata’s aggressive start-up Acquisition in recent days may just be the smaller piece of the larger puzzle that it aims to build. The strategic move to pick what seems the right sectors and an even more meticulous plan to pick the right players in a bid to save the distressed ( More on that, later) could be a master move by the team spearheaded by N Chandrasekaran.
Tata group’s vision via Tata Digital of creating a digital ecosystem that addresses consumer needs across categories in a unified manner is taking shape — One acquisition at a time. Interestingly the categories chosen could be meticulously planned or just a happy accident. In any case when we piece it all together, he strategy to foray in these categories makes sense mostly because –
- Interestingly Tata’s strategic focus on need based retailing in categories like health, e-pharmacy and food accounts for almost 70% of India’s Retail basket.
- These are inflation proof categories with a significant chunk of target market showing repeat purchase behavior.
- With 1mg, Tata is planning to capitalize on an established segment of e-consultations, e-pharmacy and e-diagnostics which is an overall market of $1bn and expected to grow at approximately 50% CAGR.
- Curefit helps Tata further its causes in healthcare by bringing its competencies in differentiated health offerings on a tech platform. Further, it beautifully fits into Tata Health’s plans of a focused effort to build a consumer facing platform. Afterall, healthcare does seem like a missing piece in Tata’s portfolio
Having said this, lets dissect Tata’s inorganic route to build their digital business.
Tata’s Super App plan is a tempting business strategy to ambush and consolidate a large share of the users’ spending via diversified offerings. Therefore, Super App is a great move from a business point of view. But what does it have to offer from a customers’ point of view? Well Read on…
The fact that WeChat hit milestones ( attracted 100 million users ) in a flash which giants like Facebook took years to even strategically aim for, makes the entire proposition of Super Apps enticing from a “business-first” standpoint. Furthermore, given the clout Chinese Investors wield in India’s huge internet businesses, the influence is but organic. Instances being PayTM’s foray into payments, wealth management, services, food delivery, etc. Ola’s foray into Food Tech, payments, etc.
That being said, some key questions still demand discussion.
1. Is India’s clan of early adopters comparable to that in an advanced economy like China in terms of market size? When WeChat began to emerge as a super app, it had a robust use case and a market, ready to adopt. The Market had already gone through the learning curve. Besides the competition for supremacy as a platform was hardly an issue. We already have Amazon doing everything and Reliance in a fierce battle with Tata.
2. With a unified platform, isn’t there a possibility of standalone apps ( Big Brands, mind you) being relegated to mere facilitators ( Of Services, Logistics, and Brand Offerings) while the aggregator enjoys being closer to the customers?
3. Having “too many cooks” on the UI/UX may cause more harm than good. As Hike’s Kavin Mittal stated in an article, “Often, the users want lesser things and more apps to do the work for them”. Besides the mind of the user often compares the apples to apples- Bigbasket / Grofers or Swiggy/Zomato or 1mg/Pharmeasy. We compare, debate, and choose the winner each time we make a purchase. If apps of similar value propositions are presented under the ambit of a super app, what would a user have to compare the prices and deals, thereby eliminating a very important step in the user journey?
Simply Put — Indian Consumers love to have a choice.
4. How would it cater to user needs on a unified platform that that aims to bring several consumer service verticals? If the earlier Rumors of Dunzo being TATA’s next acquisition were to be considered true, with a sizeable chunk of dominance in logistics already brought about by Big Basket and 1mg, how much of a Unique value proposition would Dunzo bring apart from just “faster delivery”?
The digital experience is still largely fragmented and technical barriers make India still an experimental ground. Why else do we see major tech firms going aggressive in launching the “Lite’ version of their applications?! (Read up all about it, here.)
