Companies

Tata Steel eyes 25 per cent sales from its digital platform

Suresh P Iyengar Mumbai | Updated on July 01, 2021

The steel major had launched its online platform for B2C segment, primarily targeted at individual home builders

Tata Steel is targeting 25 per cent of its sales under the Tiscon brand to come from the company’s online store over the next one year.

“Tata Tiscon is ₹8,000 crore brand annual. Already 12-13 per cent of sales are happening online. We have moved from ₹100 crore to ₹1,200 crore very quickly. I think about 20-25 per cent of our sales can come from online within one year,” Peeyush Gupta – Vice President, Steel (Marketing & Sales), Tata Steel, told BusinessLine.

Tata Steel had launched its online platform for B2C segment, Ashiyana, in 2018 primarily targeted at individual home builders. The move has enabled the company to not only reduce delivery time but also the average ticket size of purchase by consumers. “Earlier buying steel would take 4-6 weeks. We have changed that by our promise to deliver within 72 hours of order placement,” Gupta said.

To do this, Tata Steel had to ramp up its dealer network. “Our total dealership stands at 5,000 of which 1,500 are big ones through which 80 per cent of our sales happen. They have full stock-keeping units, product portfolio. This was just 700 about 2-4 years back,” Gupta said. The dealers keep track of online orders through another platform called Sampoorna.

Cross-selling products

Gupta said that the shift to online has helped the company retain customers through the cycle of constructing a house. “Earlier, a customer would buy the initial steel required from us and we were not able to retain customers. Now with this platform, we are able to attract consumers to keep buying from us and also have things like pipes, doors, and windows that are required for the later part of the house construction,” Gupta said.

In addition to the steel products, the Ashiyana platform also cross-sells other Tata products including Voltas, Croma, Tata Sky, Tata Capital for products like air conditioners, insurance, and loans. “The average purchase offline is about 1.6 tonnes per consumer. Now it is 2.7 tonnes per consumer on our online platform. We are getting happier customers who keep coming back for more products. The online platform has also allowed customers to purchase any time of the day as we accept orders 24 by 7,” Gupta said.

For the enterprise customers, Tata Steel has created two other platforms - DigEca for small businesses, and Compass for large enterprises. “ We have 1,300 customers logged into DigEca out of 9,000 customers. This was hardly 100 earlier. I am looking at bringing adoption to 40-45 per cent,” Gupta said.

Tata Steel is targeting to increase sales through DigEca by providing better technical support and credit facility for SMEs through Tata Capital.

To make Compass more attractive to large customers, Tata Steel is planning to give preference to orders placed via this platform. At present, the platform is more of a supply chain tool that is used to check product availability. “ The shift to actual purchase will happen gradually, But Compass is not for creating more customers but giving a better experience to existing large users,” Gupta added.

At present, Gupta said sales to large consumers account for 60 per cent of total sales while direct consumers and SMEs account for 20 per cent. The company expects sales to grow 30 per cent with the online push.

On the overall demand for steel, Gupta said the demand from government projects are robust, while demand from people building homes have rebounded. The construction activities by large private corporates has slowed down and yet to recover pre-Covid levels, he said.

Published on July 01, 2021

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