In a pioneering move, Tata Group’s super app, Tata Neu, is poised to enter the competitive realm of online food ordering, marking the conglomerate’s foray into this dynamic sector. Leveraging the Open Network for Digital Commerce (ONDC), Tata Neu aims to revolutionize its offerings, presenting a potential game-changer in the digital commerce landscape.
Strategy
Insiders reveal that Tata Neu’s food delivery feature is gearing up for closed-user group trials in the coming days, with a broader public launch expected within a month. The strategic entry into the food ordering domain serves a dual purpose – creating a ‘high-frequency use case’ to drive app engagement and providing a platform to cross-sell various products across categories.
ONDC Integration
While Tata Neu already features a food category tab, the ONDC integration is set to broaden its horizons. Currently limited to Tata Group’s hotel brand, Taj, the ONDC collaboration opens doors to tens of thousands of eateries across cities, challenging the dominance of Swiggy and Zomato in the food delivery market.
Growth Ambitions
The ONDC initiative at Tata Neu is under the leadership of Gaurav Porwal, a senior vice president at Tata Digital. This move aligns with Tata Neu’s broader strategy to diversify its offerings, tapping into various consumer needs and preferences.
Financial Landscape
Despite reports of a potential billion-dollar fund infusion, Tata Digital faced a widened net loss of Rs 5,553 crore in FY23, accompanied by a substantial revenue rise to Rs 26,984 crore. The company’s financial dynamics and strategic shifts are closely watched as it navigates the evolving digital commerce terrain.
Course Correction
Since its launch in April 2022, Tata Neu has faced challenges in meeting expectations. Industry sentiments suggest a need for agility and a more adaptive approach in the rapidly evolving digital landscape. Top-level exits within Tata Digital have also sparked discussions about the company’s internal dynamics.
Cost-Effective Catalyst
Tata Neu’s role in ONDC as a buyer-side app presents a cost-effective entry into the food ordering market. Unlike competitors, Tata Neu won’t need an extensive fleet of delivery riders or the effort to onboard restaurants. This strategic positioning aligns with ONDC’s collaborative model, where various participants handle different aspects of the e-commerce transaction.
Collaboration with Magicpin
Tata Neu is working closely with Magicpin for its ONDC integration, leveraging the expertise of the Gurgaon-based startup. Magicpin’s role as a technology service provider for Tata Neu’s frontend aligns with its previous collaborations with industry giants like Paytm and Ola.
ONDC Landscape
ONDC’s impact on retail purchases has diversified, with food orders now constituting about 35% of the transactions. The network’s foray into categories like fashion, electronics, beauty, and homecare has contributed to this shift, offering users incentives and discounts for purchases in these expanding categories.
Conclusion
Tata Neu’s entry into food delivery via ONDC marks a significant chapter in the evolution of India’s digital commerce landscape. As the conglomerate strategically positions itself to offer a spectrum of services, the success of this venture could redefine consumer engagement and set new standards for collaboration in the digital age.
