Tata Group and Walmart in Talks for an Investment up to $25 Bn in Tata’s ‘Super App’

  • Tata Group is soon going to launch its own e-commerce platform “super app”.
  • Tata group is in talks with Walmart for a deal entailing a strategic investment by Walmart between $20-25 billion for a large stake in the app
  • The app will have all the businesses of the Tata group merged into one channel to create a digital services behemoth.
  • The super app is scheduled to be launched in India in December 2020 or January 2021.

The salt-to-software conglomerate, Tata Group, is soon going to launch its own e-commerce platform “super app”. Walmart Inc. is in talks with Tata Group for an investment of up to $25 billion in the company’s new app, the Mint reported.

The super app will likely be hosted under a Tata Sons subsidiary. The app aims to create a digital services behemoth offering a wide range of products in the retail space.

According to the report, the super app could be launched as a joint venture between Tata and Walmart, with Walmart investing around $20-25 billion for a large stake.

The news comes at a time when Reliance Industries, controlled by Asia’s richest man Mukesh Ambani, raised over $20 billion from investors including Facebook, Alphabet’s Google, KKR & Co, and Silver Lake Partners by selling stakes in its telecommunications arm Jio Infocomm Ltd.

The app, which is scheduled to be launched in India in December 2020 or January 2021, will bring together Tata’s consumer businesses under one channel offering a wide range of products in the retail space.

“The super app may include Flipkart’s offerings from Walmart and the entire retail product franchise housed by the Tata group on one platform for retail customers. And on the other hand, Flipkart could get to be powered by Tata,” said one person on condition of anonymity.

If the Walmart deal fructifies, it will top its investment in Flipkart, for which the US-based company paid $16 billion for a 66% stake and also making it the country’s largest deal in the retail space ever.

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Walmart has roped in Goldman Sachs as an investment banker for the deal and the app valuation is estimated around $50-60 billion, another source said.

Goldman Sachs, Tata Sons and Walmart did not respond to queries, as per the report.

“Walmart is keen to get a strong brand backing its e-commerce business, while Tata group wants a global name and an established player in the online space to boost sales of products currently sold through Tata group’s retail subsidiaries and online platforms to be able to compete against Reliance Industries’ Jio Platforms and Amazon,” said another person.

Compared with Jio Platforms or Amazon, the Tata group has the largest franchise of its own branded products that are sold to retail customers.

Tata’s e-commerce platforms include Tata Cliq, StarQuik, Tata Sky, and Croma selling various retail products. Tata Consumer Products sells tea, coffee, water, salt, lentils, spices, ready to eat items, sweetener, etc.

Titan Co. Ltd. manufactures and retails fashion accessories such as watches, jewelry, and eyewear. While Tata’s apparel and accessories arm Trent operates Westside and Tata unit Landmark is a bookstore chain.

Conglomerate’s other consumer-facing businesses include Tata AutoComp systems, Cromā (a retail chain for consumer electronics and durables with almost 500 Croma branded products), Tata Swach, Magadi Soda Co., Advinus Therapeutics, Casa Décor and Tata Ceramics among others.

The proposed app will have all the businesses of the Tata group mentioned above merged into one channel.

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