Can Tata Super App, With the Backing of Walmart, Take On JioMart?

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In August, Tata Group, in a move to likely counter the offerings of the Jio umbrella, declared that they are in the process of creating a ‘super app’ of their own.

Now, following up the same, it has come to light that the American retail giant Walmart is currently in talks with Tata Group to get themselves a big chunk of the latter’s proposed grandiose super app.

Though the development is unconfirmed as of now, a media report citing the source that remains unknown has claimed that the total strategic investment that Walmart is willing to pour into this super app could be to the tune of $25 billion.

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The Tata Group wants to use this super app as an omnichannel digital platform that could leverage and bring all of their numerous consumer businesses under that.

Retail channels that Tata has built over time including Tata Cliq, StarQuik, Tata Sky and Croma are going to be merged under this super app, which is likely to be operated under Tata Sons subsidiary.

Besides this, the source in the know has also disclosed that if the Walmart-Tata Group deal goes through, the app could include all of Flipkart’s offerings as well with the e-commerce giant being powered by Tata as a whole.

From what is currently known, the app is supposed to go live in 3-4 months with a possible joint venture between Tata and Walmart in the cards along with the option of onboarding other foreign investors.

Another source who is also familiar with the development has added that Walmart has already hired Goldman Sachs as their investment banker for the deal and currently estimates the super app to be somewhere $50-60 billion.

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What Is A Super App?

The concept of super-app was first introduced to the world by China, where companies figured out that they can mint higher revenues if they club various essential services under one single app.

It is a digital ‘one-stop’ shop and caters to users’ 80% of the needs which he or she might use 3-5 different apps to fulfil. Most include services such as shopping, payments, cab booking, food services, and more. Some good examples of already successful super-apps are GoJek, WeChat, Grab, among others.

The key to the success of this type of a business model is smartphone penetration which India, being the second-biggest internet market, is observing to be on the rise at a rapid pace.

According to TechArch, a market research firm, as of December 2019, India has 502.2 million smartphone users. Thus, now the question that remains is if Tata Group can take on Jio’s offerings or JioMart in particular with Walmart’s backing them?

Tata Group Vs Reliance Jio: Who Will Win The Battle Of Super-Apps?

The answer to that is not an easy one as it is too early to make a concrete prediction. However, one can safely say Jio’s chances of grabbing a more significant share backed by Facebook and Google of this ‘market space in the making’ is highly likely.

Mukesh Ambani, Asia’s richest person, was first to the market with Reliance Jio’s offerings and is already a long way ahead into unfurling his master plan of setting up Jio as a name synonymous to a host of widely ranging digital services.

Their bouquet of services such as telecom, content streaming, shopping, payments, messaging, and more, is currently unmatched and remain unchallenged.

The acquisition of Future Group and billions of dollars of investment that Ambani has bought in recently have made Reliance Retail emerge as the strongest player in the retail sector of India.

Besides, the possible investment of $20 billion by Amazon in Reliance Retail will allow Reliance Retail – both in retail and e-tailing market – to cement its dominant position.

Reliance Retail’s JioMart, in particular, has been doing good as of late as well and has been busy ramping up its speed. In the previous month, we reported how this new O2O eCommerce venture from RIL observed 4x times more orders than it was receiving in the pre-lockdown period, thus making it clear that Ambani is way ahead in this race.

Now what new services will the super-app by Tata-Group bring forth or if the Walmart talk will solidify shortly is anybody’s guess right now.

Currently, neither Goldman Sachs nor Walmart has replied to enquires about the same. We will keep you updated about all future developments. Until then, stay tuned.

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