Tata Cliq struggles as losses rise after exit from key categories, ET Retail

The Tata Group is continuing to burn money on its first ecommerce platform, Tata Cliq.

Tata UniStore Ltd, which owns and runs Tata Cliq, posted a 16% increase in net loss at Rs 874.7 crore for fiscal 2022-23, even as its turnover dropped to less than half at Rs 407.7 crore compared with Rs 844.6 crore the year before, as per its latest regulatory disclosures.

In the filings to the Registrar of Companies (RoC) made on July 25, Tata UniStore attributed the drop in turnover to the platform’s exit from certain categories of electronics, and said the loss increased as it continued to invest in scaling up the business.

The company last year exited electronic categories like mobile phones, televisions, refrigerators and laptops to focus on apparel and lifestyle products, even as the Tata Group’s super app, Tata Neu, focused on electronics among other categories.

“During the year under review (2022-23), the company made a strategic choice and exited some major segments of the electronics category. The company took significant steps to further grow its ecommerce platforms, have stronger partnerships with brands, and a strong association with Tata Neu – the super app platform of the Tata Group,” Tata UniStore said in the filings.

Tata UniStore declined to comment when asked about the results.

Mohit Yadav, founder at business intelligence firm AltInfo, said as Tata UniStore strategically exited certain electronic categories, the 52% reduction in operating income highlighted the need for proportional expense adjustments. “A more comprehensive effort is essential to ensure sustainable and resilient operations moving forward,” he said.

Tata UniStore said for the lifestyle and luxury businesses, the company continues to grow rapidly on a year-on-year basis, delivering robust growth in revenue and improvement in gross margins.

Also read | Invested more than $2 billion in Neu; app revamp has paid off: Tata Digital CEO

“During the year under review, the company launched Tata CLiQ Palette for focused ecommerce of beauty and personal care products. The company plans to grow this ecommerce platform in future years by focusing on the niche space of personalised beauty,” it said in the filings.

The company has also rejigged its board. Pratik Pal, chief executive of Tata Digital – which owns and runs Tata Neu and is the holding company of Tata UniStore – has joined the board along with Ankur Verma from Tata Sons as additional non-executive non-independent directors. Aarthi Subramanian, Tata Group’s chief digital officer, continues to be a director at Tata UniStore.

Last fiscal year, group senior leaders like Philip Noel Auld, Harish Bhat, Kanwar Rameshwar Singh Jamwal, Venkataraman Krishnamurthy and Sriram Sethuraman resigned as directors of the company. Also, Vikas Purohit resigned as its chief executive.