Thursday 6 August 2015

Tatas rope in top talent for its e-commerce foray

The Tata Group has roped in top talent to steer its maiden new-age businesses as the 147-year-old conglomerate broadens its portfolio with bets on digital ventures. The $109-billion Tata Group has brought in Muthu Krishnan from US-based Athenahealth and Deep Thomas from Citi as CEOs for its two businesses — digital health and data analytics, sources said. Its third business, a lifestyle and electronics e-commerce platform, is being led by Ashutosh Pandey, former COO of the group's bookstore chain, Landmark.

Each of the ventures incubated by Tata Industries, which is known for creating and promoting new businesses, has already recruited 35-40 people. While the digital health and data analytics are operating out of Bengaluru, the e-commerce is from Mumbai.

Changing times and consumer behaviour have prompted the Tata Group to transform itself and foray into next-gen businesses. "The consumer and the world are going digital. We don't have a choice, we have to go," said Nirmalya Kumar, member-group executive council, Tata Sons.

Though the group is making a late entry into the startup space, Kumar refuted this, saying, "Right now, we are at the start of the digital revolution as only a small percentage of the country's population using mobile phones is connected to the internet all the time."

When asked why the group chose to go organic instead of acquiring a well-established company, the professor-turned-strategist said that though the group receives numerous startup investment proposals, the industrial house prefers having controlling stake.

Moreover, the startup companies ask for astronomical valuations, something the group feels is not worth. "It is cheaper to build than to buy."

The digital health business — a cloud-based service for electronic health records which will connect doctors, labs, pharmacies to patients — will be rolled out in two months, starting with chronic cases in two cities, and will function on subscription basis. This, in a way, marks the conglomerate's major entry into the healthcare sector, where it so far had a limited presence.

Customer data analytics, which already has four Tata companies on its rolls, made a soft launch recently and may include external firms in future. The idea is to use a database to customize services and offer customers products based on their purchasing behaviour, income and choices.

The e-commerce venture, which will be rolled out in the next few months, will have a marketplace-like model with over 80 brands including in-house labels, and an omni-channel facility where customers can opt to get products delivered or can pick them up from nearby stores.

"The model is based on generating profits and not on luring customers with discounts," said Kumar. Currently, most e-commerce firms have turned into money guzzlers as they compete to grab customers' attention by offering throw-away deals.

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