KOLKATA: Tata CLiQ, the ecommerce venture owned by the Tata Group, has changed tack and started deep discounting on smartphones, televisions and white goods such as air-conditioners to compete with bigger rivals Flipkart and Amazon.
The move is a departure from its approach of minimal discounts and keeping prices of most products at par with brick-and-mortar stores, three senior industry executives said.
Tata CLiQ wants to become a significant player in these three categories — the largest segment in ecommerce accounting for 50-55% of total sales — this summer so that there is a rub-off effect during the crucial Diwali festive period, the executives said. The company has benchmarked its prices with those on Flipkart and Amazon and for some popular brands and models, they are even lower.
“Tata CLiQ is trying to take the space vacated by Snapdeal, a price warrior in key categories like consumer electronics, home appliances and smartphones,” said a senior executive with a leading home appliance maker. He confirmed that the price of its air-conditioners sold on Tata CLiQ was lower than what the company had billed the seller.
A senior executive of a consumer electronics company said the Tata Group wants Tata CLiQ to be among the top 3-4 ecommerce ventures before Reliance Retail makes its entry later this year. “It is even spending big on digital marketing,” he said.
A Tata CLiQ spokesperson declined to comment on the matter. Tata UniStore, the owner and operator of Tata CLiQ, which started in May 2016, reported sales of Rs 12 crore in 2016-17 and a loss of Rs 162 crore, according to latest data from Tata Sons financial filings with the Registrar of Companies. On Tuesday, Tata CLiQ offered some split ACs, smart television sets and smartphones at lower prices than similar models on Amazon or Flipkart.
Consumer electronics and white goods makers fear that if this strategy of Tata CLiQ continues, it may lead to another online price war that will peak by Diwali. Panasonic India chief executive Manish Sharma said Tata CLiQ and other marketplaces are saddled with unsold inventory because sales after Diwali last year had either plunged or remained flat for most categories, leading to this current discounting.
“Their strategy is now all about remaining competitive and providing value to consumers while there is pressure to liquidate old stock,” he said. Ashutosh Pandey, CEO at Tata UniStore, told ET last October that since Tata CLiQ is not in the gross merchandise value race, discounts will be moderated. “While there will be discounts since we have to compete, we are not going to burn our pockets. We will not be the cheapest place to shop but the most authentic place,” he had said.