Tata Digital To Launch Online Beauty Store To Take On Nykaa, Purplle: Report

The Tata Group continues to build its online arsenal as it looks to launch its much-awaited super-app.

Tata Digital is reportedly finalizing plans to launch a new e-commerce platform which will exclusively sell beauty and cosmetics products. This will pit the platform against startups including Nykaa, Purplle and MyGlamm. “Tata Digital is diversifying rapidly to capture fast-moving consumer-facing segments within the digital ecosystem. The group sees the upcoming venture as a strategic high-growth platform,” an executive told ET.

The Tata Group already runs Tata Cliq, which has a women’s fashion category, and offline, it runs Westside, which sells cosmetics and beauty products. But the Tata Group seems to believe that it needs a dedicated platform for beauty and cosmetics products as it looks to launch its e-commerce play.

The Tata Group has already acquired a host of companies which will power its superapp. It has acquired a majority stake in grocery provider Big Basket for $1.3 billion, and it has also acquired a majority stake in online pharmacy 1mg. The Tata Group has also invested a sizable sum in fitness chain Cure.Fit, and Cure.Fit’s CEO, Mukesh Bansal, who’d previously founded Myntra, is now the CEO of Tata Digital.

Beauty and cosmetics could be an interesting niche for the Tata Group to tap into. It has high margins, the vertical-specific route has already been taken and other e-commerce giants — in fashion, Flipkart runs Myntra and has also merged Jabong into it, and Reliance runs Ajio. Also, it appears that it’s possible to make profits in the space, which is something that can’t be said for e-commerce as a whole — Nykaa, for instance, had managed to earn profits of Rs. 64 crore last year.

And the space is growing. An Avendus report says that the personal care and beauty products market in India expected to touch $4.4 billion by 2025, and online beauty and personal care shoppers are likely to increase four times, from 25 million in FY20 to 110 million in FY25. Interestingly, in the early days of founding of Nykaa, founder Falguni Nayar had said she’d chosen the beauty and cosmetics space because the sector wasn’t large enough to attract the attention of the Ambanis and Tatas. Times have changed since then, and it turns out that the Tatas are finally interested after all.