Tata Sons is delaying the launch of its Super App as it wants clarity on the consumer protection rules. The company’s all-in-one e-commerce app combines several services and products offered (by its companies) under a single umbrella which includes consumer durables, food and grocery and financial services, among others.
Tata Digital was slated to roll out the Super App later this month in an earnest attempt to catch up with arch-rivals such as Amazon, Walmart-owned Flipkart and billionaire Mukesh Ambani-controlled Reliance Industries (RIL). It is important to note that the Super App has been test launched within a closed user group in Bengaluru.
The proposed Consumer Protection (e-commerce) Rules, 2020 is believed to have impacted Tata Digital’s super app strategies as it an e-commerce entity, and a super app will be considered an e-commerce marketplace. Tata’s Super App is based on acquiring bulk from the combined goods and services offered by multiple group companies. According to the proposed amendments, a related party or associated firm of an e-commerce marketplace which is directly or indirectly linked to the marketplace will not be allowed as a seller on the platform.
It has been reported that the ‘related-party’ clause in the rules is a big impediment because even a last-mile delivery partner of an online marketplace firm can be considered as a related party.
In July, the commerce ministry had sought feedback on the draft rules as it wants to shield local retailers from online retail marketplace behemoths such as Amazon and Flipkart. It may affect the plans of local firms which want to foray into e-commerce space.
RIL executives are of the view that the company functions as a retailer and not an e-commerce platform, and it is ready to rework the Jio platform’s marketplace plans if the proposed rules are implemented.
Tata Digital has acquired controlling stakes in e-commerce startups such as 1MG and BigBasket among others to create its super app services, and the proposed related party norms leave several ambiguities and complexities.