Walmart Inc is in talks with the Tata Group for a potential investment of up to $25 billion in the Indian salt-to-software conglomerate’s new ‘Super App’, according to media sources. The ‘Super App’, proposed to be hosted under a Tata Sons subsidiary, aims to create a digital services behemoth offering a wide range of products in the retail space.
Scheduled for its launch in India in December or January next year, the Super App, with its valuation estimated at around $50 -60 billion, will bring together Tata’s consumer business under one channel offering a wide range of products in the retail space. The potential joint venture between Tata and Walmart could leverage the synergies between Tata’s e-commerce business and Flipkart, Walmart’s e-commerce unit, according to reports.
Should this proposed deal go through, it would be India’s largest ever retail deal, eclipsing Walmart’s earlier acquisition of a 66% stake in Flipkart ($16 Bn) in May, 2018. According to ongoing talks, the new digital platform business is proposed to be run jointly by Tata-Walmart, with more foreign investors roped in over time. Goldman Sachs has been appointed as the investment banker by Walmart for the proposed transaction, reported the financial daily, the Mint, which also shared that e-mails sent to Tata Sons, Walmart and Goldman Sachs did not elicit any response.
The Super App will bring together Tata’s various consumer businesses under one channel, offering healthcare, food and grocery ordering, insurance and financial services, fashion, lifestyle, electronics, over-the-top services, education and bill payments, etc. “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 a source in the Mint.
Compared with Jio Platforms or Amazon, Tata group has the largest franchise of its own branded products that are sold to retail customers. Tata Cliq, StarQuik, Tata Sky, and Croma are Tata Group’s e-commerce platforms selling various retail products. The promoter entity of the Super App business will have all the retail businesses of Tata group merged into one channel including Tata Consumer Products (selling tea, coffee, water, salt, lentils, spices, ready to eat items, sweeteners, etc.);Titan Co. Ltd. (which manufactures and retails fashion accessories such as watches, jewellery and eyewear); Tata Apparels and Accessories arm Trent which operates Westside and Tata unit Landmark the bookstore chain; 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.
Founded in 1962, Walmart Inc. is a US-based, globally-leading multinational retail corporation operating a chain of hypermarkets, discount department stores and grocery stores worldwide, operating approximately 11,500 stores, under 56 banners in 27 countries and e-Commerce websites in 10 countries. It employs over 2.2 million associates globally.