Bigbasket and Amazon to soon face new tough rival, Tata Group, in online grocery retail
Some days back, there was constant news running on online media about the expansion strategies of some huge e-commerce giants. Ali Baba showed interest in online grocery retail player in India, Bigbasket, while Amazon considered Grofers, which is one of the leading players in the online grocery space.
Excluding these names, there is a mammoth, well-established, and the one who has its business deep-rooted in the market, Tata Group. The company now plans to enter the online grocery market through a new brand, to show its existence in emerging yet swiftly developing market.
Tata Group will introduce a pilot venture in the coming two months as an online channel for Trent Hypermarket, which is a joint venture amid British retailer Tesco and Tata, as per the details provided by the person associated with the development.
Tata Group operates its retail business in three formats under its Star banner; Daily, Market, and Hyper, and has total 42 stores under the brand. One of the officials stated that Trent intends to discontinue its small segment Star Daily, which reduces the rental cost and simultaneously conquer those spaces online.
As the FDI policy doesn’t permits to retail multi-brand non-food products online and offline, the new initiative will be introduced through a subsidiary of Trent Fiora Hypermarket (FHL). This subsidiary operates as service providing entity in terms of distribution, warehousing, and sourcing activities.
Previously in June, Tata had acquired Gurgaon-based online grocery firm GrocerMax, along with its technology infrastructure and the management team. This acquisition is helping Tata to develop an omnichannel platform for Trent Hypermarkets.
In the case of Tesco, the third largest retailer globally with a chain of more than 6,800 stores does the business of £3 Billion through online. Though, the Indian business is miniature in size, in the last fiscal year, the sales performance of Indian retailer has witnessed a drop in the sales performance.
The penetration for online food and grocery is low than a percent, indicating the immaturity of the category and its impending prospects. However, it is expected that the online food and grocery segment will turn out to be the fastest evolving segment in the online retail sales. Other offline players such as Godrej Nature’s Basket and Reliance Fresh also have their omnichannel initiatives, despite the fact that scale of sale is not the big at present.
However, there is no doubt that $500 Billion retail market will open knocking opportunities for any player, be it local or foreign.