After facing more than Rs 1,000 crore loss in both of its first two years since launch, Tata group’s ambitious super app Tata Neu is aiming for a turnaround. Nearly two years after its launch in April 2022, Tata Neu is eyeing entry into the sizzling food delivery sector, which is currently dominated by Zomato and Swiggy.
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Tata Group Eyeing Entry Into Food Delivery Segment
The food delivery industry’s demonstrated history of strong user engagement and retention is what is believed to have motivated Tata group to take the decision to enter the meal delivery business. In addition to captivating the Indian market, Zomato and Swiggy have raised the bar for delivery networks, user experiences, and service efficiency. As per Yourstory report, Tata Neu’s interest in this industry is indicative of its acute understanding that improving app engagement is essential to turning around its financial situation. But there are a lot of obstacles to overcome when entering a market where the players are so established.
Partnering With ONDC For A Competitive Edge
For Tata Neu, the Open Network for Digital Commerce (ONDC) makes a strong case. Tata group hopes to democratize the digital commerce ecosystem by utilizing ONDC’s network to create a level playing field where different service providers can communicate and conduct business with ease. Through this partnership, Tata Neu may reportedly be able to directly access a large, pre-existing pool of restaurants and service providers, avoiding the initial challenges of building a delivery network from scratch.
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The goal of the move is to revolutionize the way services are provided and consumed, making the process more inclusive and effective, rather than just breaking into the meal delivery business.
Challenges & Opportunities Ahead For Tata Neu
Whether by acquisition or collaboration with ONDC, Tata’s foray into the food delivery industry is a daring step that demonstrates flexibility and a willingness to try new things. But there are many obstacles in the way, such as fierce competition, the requirement for technology integration, and upholding service quality. TATA Neu’s ability to provide a unique value proposition to vendors and customers will be crucial to the success of this strategic pivot as it will increase app engagement and retention.
Additionally, the Tata Group needs to manage the regulatory landscape, particularly in light of recent moves by the government to encourage fair competition and avoid market monopolization. It will be critical for the business to be able to innovate within these constraints. Tata’s consideration of partnering with ONDC or acquiring one of these industry giants in an attempt to compete with Zomato and Swiggy in India represents a strategic realignment with the goal of taking control of the thriving food delivery market.
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In order to improve user engagement and retention, Tata Neu must not only overcome its operational and competitive obstacles but also reimagine the food delivery ecosystem.
