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Ratan Tata’s and Mukesh Ambani’s residences in South Mumbai are just a few kilometres apart. Their digital ambitions, too, are increasingly drawing closer.

As faces of India’s largest business conglomerates — both valued at over $100 billion — they are gearing up for an exciting face-off that could define India of the 2020s.

Analysts reckon Tata Digital, which is a fully owned subsidiary of Tata Sons, and Reliance Industries’ digital ambitions could end up creating one of the biggest “duopolies of the decade”.

Over the years, the haloed Tata Group has earned multiple monikers in corporate circles: steel-to-salt conglomerate, cars-to-chemicals behemoth, and so on. It has earned its repute in primarily offline industries.

But lately, the 153-year-old behemoth’s stunning — and ever-expanding — digital appetite has made India Inc sit up and take note. Tata Digital, which houses the Group’s digital businesses, has inked three major deals in three weeks.

These include the $1.2 billion acquisition of India’s largest e-grocer Bigbasket; a $75 million investment in health and fitness startup Curefit; and the acquisition of leading online pharmacy 1mg (deal size undisclosed).

In one fell swoop, Tata Digital has gained a significant presence in India’s internet economy, going beyond its own lifestyle commerce offering, TataCliq.

Mukesh Bansal to shape Tata Digital’s vision

To realise its vision of building a consumer platform that takes on the likes of Reliance, Amazon, and Flipkart, Tata Digital has appointed Mukesh Bansal as President.

Bansal, the weather-beaten general in the Tata camp, comes with a keen understanding of India’s entrepreneurial ecosystem, having built and scaled two successful startups in Myntra and Curefit, and after playing a critical role in shaping India’s ecommerce narrative in the last decade.

It is believed that Bansal has now been tasked with shaping Tata Digital’s vision of building a super app, which Tata Sons Chairman N Chandrasekharan had first revealed to the media in 2019.

The “next-generation consumer platform” as described by Bansal will aggregate all of Tata Digital’s existing and upcoming online offerings, including grocery, electronics, fashion and lifestyle, payments and financial services, education, healthcare, travel. 

“Tata Digital has a highly inspiring vision to create next-generation consumer platform and I am very excited to be part of the Tata Digital team that is shaping this vision,” Bansal said in a statement.

This means two things:

a) Tata Digital isn’t done shopping yet, expect more deals. It is reportedly in talks to acquire a stake in Dunzo as well

b) Tata Digital may be following a playbook similar to that of Reliance.

Is Tata taking a leaf out of RIL’s playbook?

In 2020, the Ambani-owned conglomerate realigned its businesses and firmly shifted focus from legacy sectors like oil and chemicals to fast-growing consumer-facing segments like retail, digital commerce, telecom, entertainment, and gaming.

Sanchit Vir Gogia, Founder and CEO, Greyhound Research, told YS in a prior interaction, “Reliance had good foresight, and they knew that to be able to do more with their physical assets, they had to first expose customers online. They knew that Jio is not a digital opportunity alone. It is a hybrid or phygital opportunity, where RIL will marry its prowess in online and offline domains. All its services are now getting tied more closely under Jio.”

Tata Digital could well be the Tata Group’s ‘Jio Platforms’ — a potentially well-oiled engine that could take on the world, and even invite interest from strategic investors and PE funds.

As for individual sectoral plays, the Tata-BigBasket deal “is bigger and better than what it appears and is important for the industry from a balance of power perspective,” Greyhound Research’s Gogia wrote in a Twitter thread.

“It will add muscle to Tata’s broader ambitions around digital, help cross-sell and upsell across portfolio, and maximise wallet value from its existing customer base,” he added.

With India’s online grocery market estimated to reach $24 billion by 2025 (RedSeer report), Tata-Bigbasket will put up a third front to what was, so far, a two-way battle between Amazon and JioMart.

Riding on pandemic-induced growth in digital commerce, the total online retail market will be worth $359 billion by 2024, according to Forrester Research.

Pratik Pal, CEO of Tata Digital, said in a recent statement, “Grocery is one of the largest components of an individual’s consumption basket in India, and BigBasket is India’s largest e-grocery player, fits in perfectly with our vision of creating a large consumer digital ecosystem. 

Both Tata and Reliance know that putting all eggs in one basket is not going to cut it in a breathtakingly competitive internet economy.

Hence, scout, buy, and scale. Until you can build.