A white knight move in an uncertain year or a deliberate push to promote its recent acquisition of high-profile consumer-facing brands like 1mg, BigBasket, and Air India?
While the South African pace battery bowled out the Indian eleven with ease on day one of the Freedom Series’ final test match at Cape Town yesterday (11 Jan ‘22), it was Brijesh Patel, the IPL chairman, who bowled a jaffa back home in India when he announced the Tata Group as the new title sponsor for the upcoming edition of the Indian Premier League (IPL).
Chinese phone maker Vivo, the incumbent sponsor, walks home a year earlier than expected. It had come on board as the league’s title sponsor in 2015 after PepsiCo prematurely terminated its contract with the league. 2022 was Vivo’s last year as IPL title’s sponsor.
Vivo reportedly paid Rs 150-200 crore for the first two years of the title sponsorship. In 2017, it announced itself as the title sponsor of the IPL for the next five years (till 2022) with a bid worth Rs 2,199 crore.
The sponsorship saw its troubles in 2020 when due to the conflict between the armed forces of India and China and subsequent protests against Chinese-made goods and brands across India, the Board of Control for Cricket in India (BCCI) decided to call for new bids for that year’s title sponsor.
Dream11 won with a bid of Rs 222 crore. Vivo was back as the title sponsor for the 2021 edition.
Tata Group’s announcement as the title sponsor for the league’s 2022 edition was nothing but a surprise. We have heard or seen the conglomerate’s companies like Tata Steel or Tata Consultancy Services (TCS) or Tata Motors sponsor an event on an individual basis but to see the Group itself as the title sponsor was unexpected or unheard.
“If you look at the marathons in Mumbai, the branding was from TCS when Natarajan Chandrasekaran was its head (he is now the chairman of Tata Sons) but if you look at the way they used the branding, it has always been called the Tata Marathon,” remarks Paritosh Joshi, an independent media and communication consultant, in disagreement with our assertion.
On the other hand, Vivek Dutta, executive planning director of Hakuhodo, a Japanese advertising and public relations company feels unsure of what the Group hopes to gain from this title sponsorship move. “A company like Vivo is just Vivo – it is associated with a certain set of gadgets, that’s how the consideration set works; or DLF for that matter which is strongly associated with real estate. Whereas with Tata, since it’s such a huge conglomerate, I’m not sure what the consumers will relate to,” he remarks.
The increasingly consumer-facing conglomerate
The Tata Group has dipped its foot in diverse business verticals from steel and automotive to aerospace and telecom and media and more. If you were to jot down all the companies under the Group, most will not fall under the consumer-facing column. However, in the past 24 months, it has acquired some serious consumer-facing brands.
In October 2021, the Tata Group announced it was to acquire a 100 per cent stake in national carrier Air India with a winning bid of Rs 18,000 crore. Go back a few months in the same year and the conglomerate through Tata Digital acquired a majority stake in 1MG, an online pharmacy, in June 2021 following its 64 per cent stake pick up in e-grocer BigBasket in May.
And in 2020, Tata Global Beverages Limited (TGBL) and Tata Chemicals came together as TGBL that was renamed as Tata Consumer Products Limited (TCPL). It brought key consumer-facing brands such as "Tata Salt", "Tata Tea", "Tata Sampann" and "Tetley" under a single umbrella.
Could the intention to further expose these brands have played a part in the Group decision to become the title sponsor of the T20 league?
Tarun Singh Chauhan, a brand consultant from TSC Consulting, was quick to remind us that the above-mentioned brands are not the only consumer-facing ones from the house of Tata. “Whether it is Tanishq, Croma, Fastrack, Starbucks, Ginger Hotels, if you look at all these brands, they made the Tata brand look younger.”
He remarks that none of these brands have a Tata prefix and all of them are Tata enterprises because they were dealing with a completely new young audience for whom Tata was a very dated brand but they wanted the credibility of the Tata so it was always a Tata enterprise or a Tata initiative. The Group wants to be seen young because for the longest time Tata was "high on trust, low on youth."
Joshi too pointed out the same with Lakmé Cosmetics that is now part of Hindustan Unilever right now but was founded by Simone Tata and J.R.D. Tata as a part of Tata Oil Mills in 1952.
“It is a win-win situation” for the Tatas feels Lloyd Mathias, business strategist and angel investor. The IPL, for him, was one of the few bright spots in 2020 and 2021 and that the Group “can leverage it (title sponsorship) across a wide section of their companies be it Tata Consumer Products, use it for boosting Air India’s launch, and maybe use it to emphasise their web presence with all these big websites (1mg, BigBasket)…”
Hakuhodo’s Dutta feels companies like 1mg and BigBasket were doing well on their own and it made sound business sense to acquire them. “When it comes to exposing the brands, it would make more sense to give visibility to the brands themselves and not the Tata group. Unsure why Tata is taking this up.”
The one-year sponsorship
Tata Group’s announcement as the title sponsor of the IPL raised eyebrows but what made many people twirl their moustaches or locks in thought was the fact that this sponsorship was only for the upcoming season. 2022 was supposed to be Vivo’s last year as the title sponsor but it exited so why bring on this giant conglomerate only for a year?
A year-long IPL association, however, can also be seen as a tactical move – especially in a market situation where certain categories are doing well and there’s a lot of uncertainties opines Dutta. “Another hypothesis could be that Tata will block categories for advertisers and try to monopolise the IPL. Even if major categories are blocked Tata group would get some unprecedented mileage.”
Joshi feels it is the case of a “white knight move”. He explains the present economic scenario is not conducive for the BCCI to call for bids for the title sponsorship which usually runs into billions of rupees. “If you want broadcasters to participate and brands to participate and bid for rights, you want the markets to be buoyant and bullish rather than facing all kinds of threats.”
He feels BCCI would not want to dilute the value of the league by giving away long-term deals when situations are fraught with uncertainty. “It is possible that BCCI would have tested the waters to see what the appetite for big money was right now and may well have discovered it's not the right time.”
The Tatas could have appeared as the white knight and said count on us while things are hard, “we will see you through, and after that period is over, we will discuss what we should do now,” says Joshi and also says it could well be Chandrasekaran's idea and his viewpoint on how Tata Sons should go forward from the relatively low profile it has kept for all this time.
While the news did make everyone take notice, the 2022 mega player auction is the next big thing on people's radars and it is expected to take place in February and the league will take place in April, May, and June. All this is on paper unless the Omicron led third-wave decides to clean bowls us with a jaffa.
With additional inputs from Aishwarya Ramesh.
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