As India’s Tata Group seeks to cash in on rising purchasing power in a market dominated by deep-pocketed international retailers and startups backed by global tech investors, the biggest industrial conglomerate of India launched an e-commerce venture on Friday.

With the aim of making its website a marketplace for in-house and partner companies to sell apparel and electronics, the group announced that it had spent “several hundred million dollars” for development of the website and it took them over a year and a half to develop it, the group said.

With some of the country’s oldest and largest corporations entering an industry established in the last five years by startups Snapdeal and Flipkart Online Services Pvt Ltd, the move by the Tata Group is in time and in line with a second phase in Indian e-commerce development.

Amazon.com, Inc which has already invested over $2 billion for growth of its business in India opened its operations in the country in 2013 and was more than welcomed by the customers.

Local conglomerates only lately entered the fray. While the Aditya Birla Group and Mahindra and Mahindra Ltd recently launched online retail platforms, Reliance Industries Ltd, one of the largest business groups in India, started an online apparel shop last month.

E-commerce is an opportunity to capitalize the on middle class growth and disposable income and the rapid internet adoption for big business houses in India. An estimate by Bank of America Merrill Lynch states that from a meager $11 billion in revenues last year, the online merchandise sales will hit $220 billion mark in India by 2025.

But with the top three players incurring millions of dollars in losses due to heavy discounts, the market has fostered cut-price competition.

Distinct from the strategy of just growing sales via discounts, Tata has said that its focus was profit margins and unit economics.

“We don’t want to get into the discount wars, we want to serve customers with great products and build a sustainable business,” said Chief Executive Ashutosh Pandey of Tata Unistore, parent of the operator of Tata Cliq.

Tata would use its money to build inventory networks around existing store locations owned by group partners instead of spending the money in establishing a large number of warehouses like other ecommerce players have done to keep costs in check, Pandey said.

There have been mixed success for the group against its bet on new business that it has embarked upon in recent year. The Tata Group is traditionally into businesses that include steel production, tea packaging, information technology services and automobiles.

While there have been some setbacks in its mobile phone venture Tata Docomo, its retail businesses including sellers of gold ornaments, sunglasses, apparel and electronics have successfully expanded.

(Adapted from Reuters)