Tata Group: Tata, Adani’s super app plans affected by draft rules for e-tail

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    (This story originally appeared in on August 21, 2021) Indian conglomerates will see their e-commerce game, especially their app development, severely impacted if draft consumer rules that prevent “related parties” from selling on their online marketplace-based platforms are passed.

    The suggestions thwart the Tata Group’s super app, an all-in-one mobile application that is being tested on key stakeholders, including employees.

    is also preparing to launch a super app. A super app can bring all the products and services of a conglomerate together on a single platform – so that users can order food and drug deliveries, book flights and hotel rooms, and access investment instruments – from one place.

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    The Companies Act defines a related party as any corporation that is a holding, subsidiary or associate of such corporation and has a common chain of shareholders and directors. According to the proposed rules, Tata Group entities such as Titan, Trent and Taj cannot be part of their super app. Ditto for companies in the Adani Group.

    Tatas has formally raised concerns to the Consumers Department while

    has expressed its support for the draft regulation. Last week, Consumer Minister Piyush Goyal criticized the Tatas for defending themselves against the draft regulation and for overlooking national interests in protecting stationary companies.

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    Read Now The draft rule also affects the relationships between app owners and related parties. The Tata Group companies cannot sell products like Tata Salt and Tata Sampann on their own e-commerce sites like Bigbasket. Likewise, Reliance will not be able to host Hamleys on JioMart.

    Legal experts suggested that conglomerates could change structures by creating two super-normal apps – they could sell their own inventory on one and list third-party products on the other.

    The draft rule also restricts super / normal apps from having sellers who share brand names. This means that Tata and Adani cannot start eponymous super apps. In the past, commercial properties have grown and built a large customer ecosystem by venturing into different sectors and using their flagship brand.

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