Jamsetji Tata founded the Tata Group, which is an Indian multinational conglomerate, in 1868. They are one of India’s largest and oldest industrial conglomerates, producing automobiles, airplanes, and a variety of other goods and services. Tata’s presence has grown in almost every sector as the country progressed, from consumer and retail to infrastructure, services, financial services, manufacturing, and communications and IT services.
Now with the rise and growing fast adoption of new technologies like AI, Data Analytics, Cloud Computing, India and With the rise and rapid adoption of new technologies such as artificial intelligence (AI), data analytics, cloud computing, and so on, India and the rest of the world are on the verge of a massive digital revolution in every sector.
Tata Group, with its 153-year business experience, has recognized this and, in order to evolve their company to the new changes occurring with regard to technologies globally, has made changes in the last few years in the group with a number of moves that signal aggressive expansion into the digital world. Let’s take a look and try to figure out what’s going on.
The Tata Group has a diverse range of businesses. Also, the group has been expanding and acquiring strategic businesses in various sectors around the world, such as Tetley Group in the United Kingdom, which was acquired by Tata Tea for $407 million, or Daewoo Group in South Korea, which was acquired by Tata Motors for $102 million and Jaguar Land Rover in the United Kingdom for $2.3 billion.
As the Tata Group grew, one particular division, Tata Consultancy Services (TCS), began to grow rapidly and quietly without many people noticing, as the world slowly expanded and adopted IT in various areas.
When the financial crisis of 2008 hit, as it did everywhere and every business, the TATA group was hard hit because many of their businesses had large assets and the financial crisis forced them to restructure their operations. The financial crisis at the time caused many western companies to outsource their work, and this is where TCS became important. As a result, N. Chandrasekaran was named CEO and MD of TCS, succeeding S. Ramadorai.
A series of events over the next few years led to them charting a new course for themselves. After a difficult few years during which there was a lot of tension within the TATA group due to the conflict between Ratan Tata and Cyrus Mistry over the company’s management. After years of court trials and board discussions, Cyrus Mistry was forced to resign in 2016.
This led to Ratan Tata taking over as Interim Chairman. During this time, he invested in a lot of new companies, Ratan Tata was appointed Interim Chairman as a result of this. During this time, he invested in a slew of new Indian and international startups, including Paytm, Snapdeal, Lenskart, CureFit, Ola, Abra, and a slew of others. Ratan Tata, with his many years of experience, recognized that technology was the way of the future, and that India was undergoing significant changes as a result of these technological revolutions. He also noticed that TCS accounted for 75% of the Tata group’s revenue at the time. As a result, he became convinced that N. Chandrasekaran, the CEO and MD of TCS, would take over as the Tata Group’s new Chairman.
N. Chandrasekaran had extensive experience with TCS, and his knowledge of the massive technological and computer revolution that occurred during his time would be a huge benefit to the Tata group going forward. He reorganized the Tata group after taking over, calling the reorganization strategy a 3S strategy, which stands for Simplifying, Synergizing, and Scaling, with Tata Digital being a key area in this.
Tata throughout the years had accumulated and acquired a lot of different businesses in various different sectors Tata had amassed and acquired a diverse range of businesses in a variety of industries, catering to a diverse range of customers, over the years. Tata’s digital strategy was to create a Super App that would compete with other major e-commerce players and include categories like electronics, groceries, fashion and lifestyle, beauty, travel, health, education, and entertainment, as well as bring together various Tata brands under one roof.
Tata has made a number of different moves on the way to creating the super app. They bought a majority (64%) stake in Bigbasket, an online grocery platform, in May 2021. Then they bought 1mg, a 6-year-old e-pharmacy Healthcare startup, for a 51 percent to 60 percent majority stake. Then they put $75 million into fitness startup CureFit, and as part of the deal, Mukesh Bansal, CureFit’s co-founder and CEO, joined Tata Digital as president while continuing to lead CureFit. Tata is also said to be acquiring a significant stake in the HyperLocal Delivery Startup Dunzo, according to latest reports. In addition, if certain rumors and reports are to be believed, Tata is looking to buy a stake in a Fintech company.
When we combine their recent acquisitions with their already established businesses in various different areas, such as watch and jewelry band Titan, Fashion retail chain Trent and Tata Cliq in the Electronics Retail sector, especially with recent reports of the group infusing around 3500 crores into Tata Cliq, we can see how serious Tata is about this.
Tata’s are rumoured to be in discussions with investors around the globe regarding stakes in its digital super app platform. And one of the investors, according to reports is supposed to be Walmart who are looking to invest upto $20-$25 Billion into the Tata’s super app.
Now, certainly executing this to perfection will not be easy even for Tata’s as building a super app has been tried before by many but not executed to perfection in India such as one of the startup which tried doing this with Hike Messenger but could not do it. However, the Tata group has a long history of re-inventing and re-innovating, which is why they have been able to survive and succeed for so long for over 150 years.
Whatever happens, especially with tough competition for Tata in this area from Amazon, Mukesh Ambani’s Reliance Retail & Jio; one thing is certain: the future of business, particularly in India, with Tata’s pivot into the digital world, will be an exciting journey to follow and cover, with huge growth potential for a variety of sectors in the country.
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