Tata CliQ Testing Grounds Before Opening More Beauty Stores, Says CEO — BQ Exclusive

Tata Group's multi-brand beauty business, Tata CLiQ Palette, is testing the grounds by opening one store at a time in different locations as the retailer explores how to keep physical locations relevant in the age of e-commerce.

After opening its maiden store in Navi Mumbai earlier this month, the company is looking to open its second store in Pune. "Our stores are very different from any other offline beauty formats, so it is very important for us to test the grounds... Based on the feedbacks, we will tweak our store expansion plans," said Gopal Asthana, chief executive officer, Tata CLiQ.

While the company has got "positive" feedback from customers in metros, the retailer intends to study and analyse customer behaviour beyond metros, through the store in Pune, said Asthana. "We will be rolling out more stores, but six months later, as we are yet to decide if we should set up more outlets in metros or non-metros or a combination of both."

Having the best product assortment, and then making it accessible to the masses are the top two priorities of the newly appointed head of Tata CLiQ, the first e-commerce venture of Tata Group. Last year, the company exited electronics and appliances categories such as television, laptops, mobiles and refrigerators, to focus on apparel and lifestyle segments. In lifestyle, the company is betting on categories like home and kids, Asthana said. "These are the two categories where we haven't penetrated at all. So, will be expanding... We are also focusing on sports in a big way."

Asthana has over two decades of experience in retail, having worked in multiple roles across categories ranging from fashion to beauty. Before joining Tata CLiQ in June this year, he served as chief business officer at Nykaa. He was also associated with Shoppers Stop for around 21 years; first, as a category head in 1998 and then as executive vice-president, before leaving in 2019. He also briefly led the Future Group's beauty business.

His appointment comes at a time when the company is struggling with loss, partly because it continues to invest in scaling up the business.

Tata Unistore Ltd., which owns Tata CLiQ, registered a 16% year-on-year increase in net loss to Rs 875 crore as of March 2023, according to its filing with the Registrar of Companies. Revenue halved to Rs 408 crore, as against Rs 845 crore, primarily because the firm exited the electronics categories.

Asthana didn't disclose how soon Tata CLiQ, which started operations in 2016, expects to achieve profitability or the revenue target that the company has set for the current fiscal, citing company policy. "We've been growing year-on-year [in luxury, lifestyle and apparel], and we are working towards building a scalable, sustainable and profitable business," he said.

Discretionary spending has also showed signs of slowdown so far this financial year. But Asthana said that the August-September period is going to be a barometer of the upcoming season. "The demand environment is currently subdued, but we expect sentiments to improve during the festive season that begins from Raksha Bandhan," he told BQ Prime.

Typically, the second half of fiscal, which coincides with festive season, contributes about 56% of the company's sales, Asthana said.

The beauty and personal care segment is Tata CLiQ's most recent bet, and the company intends to grow this category, by focusing on the niche space of personalised beauty. The beauty platform — Tata CLiQ Palatte — is pitted against the likes of Reliance Retail's Tira, Nykaa, LVMH's Sephora and SS Beauty by Shoppers Stop, for a share of the booming $16.8 billion beauty and personal care market in the world's most populous country.

Its stores are "very different" from any other beauty retail outlets present in India, Asthana said. The store features augmented reality-led makeup trials and skin analyser mirrors, enabling customers to virtually try on makeup and receive detailed skin analysis, elevating their shopping experience and ensuring they find their perfect beauty match.

Customers can interact with the Cliq squad and professionals at the “Beauty Playground," which offers guidance and education.

In addition, the studio features the Palette Beauty Console, which gathers pertinent customer information such as gender, age, and skin type. 

"We want to educate, animate and remain engaged, and that way we will be able to create our own niche," said Asthana. In the future, the company may also come out with private labels or its own brands, he said.

On competition, there's still enough space to grow, he said. "The per capita consumption of beauty in the U.S. is about $180, compared to just $6 in India. So now one can imagine the potential of the Indian market."