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"Discounting can not be the core of any business model": Mr. Ashutosh Pandey, CEO- Tata CLiQ

  • Aug 28th, 2017
E-Commerce Industry

According to digital market intelligence company SimilarWeb, India’s top 25 retail websites already account for some 62% of all web traffic nationwide. Today, India has over 137 million internet users representing about 11% of its population, and it ranks third in the world, behind China and USA. While great opportunities surely seem to be present; closing down of several ecommerce based startups in recent years, sends an alarm signal as well.

In this context, to understand the changing dynamics of the E-Commerce Industry better, Career2NextOrbit team interviewed Mr. Ashutosh Pandey, CEO- Tata CLiQ.

In this interview, Mr. Ashutosh Pandey- CEO, Tata CLiQ talks about the changing landscape and future of E- Commerce Industry in India, the viability of various business models adopted by various E-Commerce players and recommends some necessary skills for graduates to excel in this industry. He also throws light on the next two-years plans for Tata CLiQ.

 

Ashutosh Pandey- CEO Tata CLiQ

About Mr. Ashutosh Pandey: Mr. Ashutosh Pandey, serves as the Chief Executive Officer of Tata CLiQ, the ecommerce venture of the Tata group. Prior to this, he was the COO of Landmark E-Tail Limited, Trent's online retail business from 2013 to 2014.  Mr. Pandey was also the COO and Business Head of Landmark, one of India's leading Leisure and Entertainment retailers, from 2009 to 2013. During this time, he was responsible for managing Landmark's P&L, besides building the brand, customer connect, and store operations. Mr. Pandey is an MBA from FMS Delhi and holds a Civil Engineering Degree. 

 

Career2NextOrbit: What are your views on E-Commerce industry in India, both present and long-term opportunities and challenges?

Mr. Ashutosh Pandey:  The pace of growth hasn’t always been constant, but the e-commerce industry in India is growing nevertheless. Rising disposable incomes, combined with an increase in the use of smartphones and mobile internet, are the major drivers of this growth. A joint research by ASSOCHAM and Forrester suggests that India's e-commerce will grow from $30 billion in 2016 to $120 billion in 2020, at an annual rate of 51 percent – the highest in the world.

E-commerce players, especially the big ones, have gained the trust of customers in Tier-I urban markets, and are now working towards building loyalty. However, they will have to start with the ‘trust’ stage in Tier-II and Tier-III markets, where smartphone sales and internet penetration are still in the process of growing.

The common challenges that all e-commerce players face, regardless of their size or reach, pertain to supply chain, logistics, and transportation infrastructure, which are either inadequate or inefficient. In addition to this, many of them still appear to be struggling to find an alternative to the ‘discount-only’ model.

I believe that we, at Tata CLiQ, have found a viable, long-term solution in our ‘phygital’ model, which combines the best of the online and offline shopping experience for customers. Equally, I believe that the current scenario will spur the industry on to greater levels of innovation and that we can expect to see some new business models emerge in due course.

Career2NextOrbit: With the present pulls and pushes of Indian entrepreneurs and their investors, do you think the golden days of Indian E-Commerce industry is over?

Mr. Ashutosh Pandey: E-commerce has been very dynamic. Though the market is still evolving, the investors have started looking for returns. It is time for the businesses to work towards creating sustainable business models that can be profitable in the long run.

Career2NextOrbit: Going ahead, do you think the market will further concentrate with even lesser players?

Mr. Ashutosh Pandey: India’s e-commerce market is still in its early stages of development, and is evolving as we speak. We have seen several business models solidify in recent years, and we will see a good deal of consolidation happen, in the years to come. The sector will continue to be competitive, but it is only the sustainable business models that will survive.

Career2NextOrbit: Skeptics have raised questions about the viability of business models adopted by Indian E-Commerce players. Do you think, they are justified or this is what brought this industry into reckoning in the first place?

Mr. Ashutosh Pandey:  Discounting is a model adopted by most e-commerce players but it will only get you customers at the outset and cannot be at the core of any business model that hopes to be viable in the long run. Once you have gained a foothold in the market, you should grow the business through differentiated customer experiences. Take our ‘phygital’ model, for instance. It is unique, it is sustainable, and it creates a carefully curated, quality-assured online market for customers.

E-commerce players must look beyond discounts and explore new models, otherwise, they will continue to burn up funds and struggle to make profits.

Career2NextOrbit: Going ahead, do you foresee any changes in the business models of Indian e-Commerce companies? Where do you think Tata CLiQ has a lesson or two for other players?

Mr. Ashutosh Pandey:  I believe every player in the e-commerce space must try and arrive at a business model that best suits their individual strengths and capabilities – only then can they have an unbeatable differentiator. Either that or they must create a customer experience like no other. The market dynamics may, of course, necessitate revisions or modifications to the business model in due course.

I think we have started in the right direction with our phygital journey. As of today, our integrated retailing model makes us the pioneer and the leader of omni-channel retailing in India. We offer customers the latest products from the best brands through the unique ‘phygital’ model. This allows them to use our store-based services such as CLiQ & PiQ, Return to Store, and Order in Store. Unlike what other e-tailers do, the orders are shipped directly from the store instead of centralized warehouses, thereby reducing logistics cost and time.

Career2NextOrbit: With everyone in India talking about job cuts by E-commerce players in India, in your opinion-what went wrong? Were these companies initially bloated, or this is a phase of course correction every industry has to go through?

 Mr. Ashutosh Pandey:  Like I said, it is still early years for the Indian e-commerce space. And in this period, some e-commerce companies witnessed high-profile exits, drop in valuation, and large-scale layoffs. Despite this, e-commerce companies have shown that they have a lot of potential to attract talent and create job opportunities. A recent Employment Outlook Report by TeamLease indicates that jobs in e-commerce sector are likely to grow steadily in coming years. Companies have already started hiring and will continue to do so.

Career2NextOrbit: What are five top most skills a management graduate requires to excel and grow in Indian E-Commerce industry? How is it different from traditional Manufacturing or FMCG job?

Mr. Ashutosh Pandey:  Business challenges and factors that influence the e-commerce sector are entirely different as compared to a manufacturing or FMCG. The business here is very dynamic in nature, there is tough competition and very importantly the business can only survive if we surpass customer expectations. Some of the key behavioural elements that every team member should hold and demonstrate at work would include, customer centricity, agility and data driven.

Basis the dynamic nature of business, it is difficult to call out common functional skills/competencies for this industry. While there are certain common soft/leadership skills, the functional skills are unique to each function. Every function holds its own criticality in meeting the customer expectations/delight in this industry. Technology is the backbone of this business. Platform orientation, SEO, SEM and Google Analytics skills, Brand & Category Management and Process orientation are key skill sets for e-commerce industry. Customer obsession, Execution excellence, Drive for results, Dealing with ambiguity and Partnership management skills would constitute key leadership/soft skills.    

Career2NextOrbit: What are the next two-year plans for Tata Cliq? Can we expect a paradigm shift?

Mr. Ashutosh Pandey:  Our aim is sustainable, profitable growth. We are here for the long run and we have a clear path to profitability. The objective is to build a clearly differentiated customer brand, and we have planned robust investments in technology, customer service, and the ‘phygital’ model accordingly. We hope to grow 100 percent year-on-year over the next few years and become the finest destination for premium brands across a large number of categories.

Career2NextOrbit: Would you like to share any message to the B-School leaders about preparing the students for Corporate battle?

Mr. Ashutosh Pandey: In today’s global world what corporates are now looking for is not just the great grade but they are giving a lot of weightage to soft skills while they are onboarding talent. The game is not just about great academics but is also about soft skills.

Colleges not only need to train the students for the corporate war but also develop them for the jobs that do not yet exist. Which makes early exposure to work and career- planning, training in softer skills extremely important.

The corporates of the future will need to recruit talent with the attitude that they can then train, to develop the skills required for success through what will be a far more competitive scenario than what we have seen till now.

Though technology will change far faster than even before and this pace will only accelerate, the core of any corporate will always be this human resource, which will direct and guide the talent.


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