Though a late entrant to the ecommerce game, Tata CLiQ has come up with a unique value proposition that is powering its rise to the top of the online charts
When Tata CLiQ entered the Indian e-commerce market in May 2016, it was already a fairly crowded place: homegrown names like Flipkart and Snapdeal had captured the imagination (and a decent share of eyeballs) of the country’s online shoppers; global giant Amazon had firmly established itself; and domestic conglomerates Reliance and Aditya Birla Group had already joined the online brand wagon.
As a result, Tata CLiQ’s low-decibel launch was met with a certain degree of scepticism by industry watchers who were used to big-budget e-commerce launches. No front-page ads, no TV commercials, no outdoor advertising — the Tata group’s e-commerce venture walked in with a clutter-breaking digital campaign featuring a camel.
Fifteen months on, however, Tata CLiQ seems to have raced ahead, beating the odds and surpassing expectations. It already ranks among the top 10 e-commerce sites in terms of traffic (based on alexa.com data) and has big plans to change the way Indians shop online as it enters its second year of operations. Tata CLiQ’s intentions to take on the market in a bigger way are clear in its ‘New&Now’ campaign unveiled in May this year to mark its first anniversary.
“As we were approaching our launch, everyone around us, including our consultants, the media and wellwishers kept warning us of the risks associated with being late entrants to the e-commerce space,” says Ashutosh Pandey, CEO of Tata CLiQ. “But we were very clear that whatever we did had to be sustainable — all around us, we saw companies adopting unsustainable ways to get their brands noticed and we knew that the party would end sooner rather than later. As late entrants, we had the benefit of learning from others’ mistakes and we were determined not to repeat them.”
Thus, glitzy campaigns and deep discounts — the narrative of Indian e-commerce until then — found no place in Tata CLiQ’s scheme of things. Instead, the company went back to the basics to put together a value proposition that brought together the convenience of online shopping and the comfort of offline shopping to create an omnichannel or, as Tata CLiQ calls it, a ‘phygital’ shopping experience.
In a market where online retailers were selling products from various sellers at multiple price points, Tata CLiQ took a conscious decision not to try to please everyone. Instead, it would cater to what it had identified as its core audience — not the entry-level discount seekers who made up 30% of the online shopping market, but another segment that was coming online: shoppers in the 30-45 age group, with an affinity for certain brands and the willingness to pay a small premium for the convenience of buying these brands online.
“With this segment in mind, we also decided to focus on select brands that had the aspiration and the potential to reach more customers online, especially in places where they could not set up their own physical stores. With Tata CLiQ, they had the option to create their stores and brand experience online,” says Mr Pandey.
The way to break the online shopping clutter, thus, was to create a curated experience for a more discerning buyer. Rather than list a multitude of sellers, the Tata CLiQ approach is to work with the best brands focusing on authenticity, quality and convenience.
The relationship with brands has indeed enabled Tata CLiQ to offer a differentiated proposition. Today, it lists a range of more than 800 highstreet brands including Westside (a Tata CLiQ exclusive), Vero Moda, ONLY, New Look, Celio*, Jack and Jones, Levi’s and Globus, among others. This, along with the strong omnichannel, has been a win-win combination for all: the customer, the brands and Tata CLiQ.
According to Mr Pandey, Tata CLiQ already ranks among the top four preferred online destinations for shoppers in the two categories that the platform currently focuses on: fashion and electronics. That’s not all. The average ticket size for fashion and electronics is roughly 1.5 times of other sites. In electronics, where an online shopper’s typical behaviour is to start with small-ticket purchases, Tata CLiQ’s customers have surprised it by opting for big-ticket items such as air-conditioners, refrigerators and washing machines.
The brands, meanwhile, are raking in the rewards in terms of a larger customer base and higher sales, especially in areas that are underserved by the pure e-commerce players. Westside’s sales figures on Tata CLiQ, for example, have been growing, with more than 20% sales coming from places where Westside does not have stores. Similarly, electronics brands have gained access to a segment that didn’t exist earlier: believers in the ‘phygital’ proposition.
“LG has always been a market leader in the consumer durables space. Our expanded collaboration with Tata CLiQ has further helped us strengthen our leadership in the market. Tata CLiQ enables us with the right platform and attention from consumers,” says Rahul Tayal, director, strategic businesses, at LG. “The omnichannel experience further reinstates to consumers that despite making the purchase online, the brand is involved right till the end.”
Currently, fashion accounts for upto 60-70% of the units sold on Tata CLiQ, whereas electronics make up around 60% of sales. Clearly, the omnichannel, brand-focused model has clicked with a niche customer segment. To keep the momentum going, Tata CLiQ is growing its brand portfolio at the rate of at least one new brand per category every week.
Having tasted success with the ‘phygital’ model, and having created mindspace and confidence among customers, Tata CLiQ’s next big bet is on the luxury segment. The company launched Tata CLiQ Luxury last year to tap into India’s growing market for premium, aspirational products. A CII report released earlier this year pegged India’s luxury goods market at US$ 18.5 billion, up 25% from the previous year. With growing incomes and an unprecedented awareness and appetite for global luxury products, this trend is set to grow. According to a report by Bain & Company, more customers are moving to online platforms for the purchase of luxury products.
With this trend in mind, Tata CLiQ Luxury has built a portfolio that features the who’s who of premium brands: Brooks Brothers, Coach, Furla, Michael Kors, Armani, Hugo Boss and Tumi, among others.
Nearly half of the portal’s customer base is from tier 2 and tier 3 cities such as Kanpur, Indore, Surat, Guwahati, Ludhiana, Panchkula, Faridabad and Bhubaneswar.
The company believes that customers are now more aware that the Indian luxury market is riddled with counterfeit products, especially in smaller cities; hence, this customer segment is moving online to established platforms like Tata CLiQ.
Anand Nair, business head of Brooks Brothers India talks about the advantages of tying up with Tata CLiQ Luxury: “This partnership broadens the reach of our brand experience to consumers across the country and assures them that their purchases are both authentic and part of our latest collection.”
Over the next year, Tata CLiQ expects the luxury portfolio to become one of the game-changers for its business. “The higher the price point, the greater the certainty that the omnichannel is the best way to sell the product,” says Mr Pandey.
Even as luxury becomes a focus area, TataCLiQ is finalising plans to add new categories — jewellery, home furnishing, food products and kidswear are expected in store by the end of this year.
The year ahead will bring a new refurbished website delivering a more personalised experience than before, a new campaign and a sharper focus on personalised, digital communications. Mr Pandey sums up the vision: “At the end of our second year of operations, by May 2018, we want to be seen as one of the stronger players in the business. The first year was about creating a differentiated product. This year, our primary goal is to strengthen our differentiation and firmly establish ourselves as one of the preferred destinations of online shoppers in India.” With a smooth start and a clear vision, Tata CLiQ is firmly set on the e-commerce pathway.