Following several years of development, Tata Group, the 150-year-old software-to-steel Indian conglomerate, rolled out Tata Neu yesterday. This super app brings together the capabilities of around a dozen group companies, including groceries, electronics, entertainment and travel, plus a new financial services arm covering payments, lending, investments and insurance. Tata Group already serves 120mn customers across 2,500 offline stores, including 80mn users of its existing digital apps.
We have previously written on the race for digital dominance in India, which likely represents the biggest emerging market opportunity for western investors given China’s less favourable regulatory environment. The potential scale of this market has resulted in India attracting more than its fair share of VC funding over the past year.
Key international players who will likely shape the course of the industry in India include Amazon, Facebook/ Whatsapp, Google and Walmart. Local operators include Paytm, the country's leading processor of mobile payments, and Reliance Jio.
Tata had planned to launch its super app last year, but has been struggling with both reliability and the user experience. Combining the offerings of the various Tata Group stablemates into a seamless digital platform has proved challenging. Reports today suggest users have encountered problems during the registration and login process. However, interest has been high, with over 0.5mn android downloads on the first day.
To incentivise customers to use its platform, Tata Neu has created a rewards programme that offers Tata NeuCoins (that are each equivalent to INR1). The intention is that this will, over time, replace the different programmes currently offered by different Tata Group brands such as bigbasket and 1mg. A single loyalty programme, NeuPass, will help to keep users within the confines of the super app; as well as the NeuCoins, users can expect cash backs and discounts, free delivery, credit lines and preferential access to new product launches.
While we regard the addition of financial services functionality (in particular, payments) as crucial to the success of Tata Neu, we also feel that a messaging platform would substantially enhance its super app credentials. Tie-ups with non-Tata franchises should be considered to fill this and other gaps in Tata Neu's portfolio of services.