Starquik, which will be the online channel for Trent Hypermarket, will roll out a pilot venture in the next two months.

Tata Group takes on BigBasket and Amazon to foray into online grocery with Starquik Image for representation
Atom Online Grocery Tuesday, September 19, 2017 - 10:48

The online grocery space is set to see some tough competition as Tata Group is set to venture into online grocery with its new brand Starquik. This brand is expected to directly take on Amazon and BigBasket.

According to a report in Economic Times, Starquik, which will be the online channel for Trent Hypermarket, will roll out a pilot venture in the next two months. Trent Hypermarket, Tata’s retail arm is a joint venture between Tata and Tesco.

Trent, which runs three formats of retail stores will shut its smaller format, Star Daily, to cust rental costs and will serve those catchment areas through online.

As per the report, this initiative will be through Fiora Hypermarket, a subsidiary of Trent. This is because foreign direct investment is not allowed in retailing of multibrand non-food products offline or online.

As a start to its omnichannel strategy, Tata Group bought Gurgaon-based GrocerMax in June.

Tesco already an online business, which is profitable and earns nearly £3 billion in sales. However, in India, this market is still in a very nascent stage with the penetration being below 1%.

According to the ET report, Morgan Stanley expects online food and grocery segment to grow at a compounded annual growth rate of 141% by 2020 and contributing $15 billion, or 12.5%, of overall online retail sales.

Larger offline players like Reliance Fresh and Godrej Nature’s Basket too have launched omnichannel initiatives and are also still in a nascent stage.

However, there has been quite a bit of traction in the online grocery space in India, currently dominated by BigBasket and Amazon Now. Betting on the growth of this market, Paytm’s ecommerce arm Paytm Mall is looking to pick up a major stake in BigBasket. Amazon Now too, is in talks to buy Grofers.

Tata’s foray into this market with Starquik will see it competing with these entities.

Experts tell ET that it should work well for Tata if they have the strong logistics and supply chain capabilities. But Tata may have an advantage over these pure play online players with its omnichannel strategy.

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