Tata's love affair with Snapdeal

Summary:First, Tata Value Homes decided to sell its apartments using the site. Then, Ratan Tata invested in a personal capacity. We should all be so lucky.

It seems a little odd that someone like Ratan Tata, former CEO and chairman of the gargantuan $103 billion-in-revenues Tata Group of companies would, in his halcyon retirement years, plonk some of his personal money down for a stake in Snapdeal, India's second-largest online marketplace.

Tata hornet

In his retirement, I imagine Ratan Tata to be tooling around in his Ferrari or Bugatti or any of the other sports cars that he owns, sipping on Cognac, cranking the Brahms on his stereo, flying fighter jets (as he often does) and figuring out where his next exquisite meal will be. After all, this is a highly cultured 75-year-old man who has just finished the exhausting job of running one of the most sprawling empires in the world, and the last thing I would imagine him to be doing is taking the trouble to be investing in an e-commerce company. Still, that’s apparently what he has done, although the amount hasn't been disclosed.

"An investment by a legendary and respected figure like Mr Tata is an excellent validation of our focused strategy on building a long-term enterprise, and marks the start of a very important phase for the company," said Snapdeal's co-founder and chief executive Kunal Bahl to the Economic Times.

tata

Indian online retail has seen a deluge of deals, with Snapdeal raising $233 million in just two rounds this year from eBay, Temasek, and others, while Indian e-commerce leader Flipkart raised a staggering $1 billion from existing investors in July. And just a few hours after the announcement of the Flipkart investment, Amazon also announced a $2 billion investment into its India operations.

Snapdeal, which says it is hitting gross merchandise sales of $1 billion, seems to have struck a particularly cosy relationship with the Tata brand. Just a day before the Ratan Tata announcement, Snapdeal also announced that it would offer home buyers the opportunity to register and book homes made by Tata Value Homes projects by paying $500 (Rs 30,000) from August 28 onwards. The homes would range from one-bedroom apartments to three-bedroom ones, and prices would be anywhere between $50,000 to $108,000. Apparently, Tata Homes has already sold 600 homes through its own websites, so this would simply be an extension of this existing strategy.

Leveraging real estate sales via e-commerce is not something that has really taken off as yet in India — but considering how hot the sector is perennially, the immense reach that a popular e-commerce platform offers and the margins that can be saved or made using this channel, the effort is a no-brainer. Perhaps the only roadblock in online sales is trust, but with the burnished Tata name brand attached to a property, the commercial success of the venture is, in many eyes, a foregone conclusion.

Topics: E-Commerce, India

About

Rajiv is a journalist and filmmaker based out of New Delhi who is interested in how new technologies, innovation, and disruptive business forces are shaking things up in India. He was most recently a features editor at Business Standard newspaper, and started his career as a reporter with Fortune Magazine in New York in the '90s. He a... Full Bio

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