The super app launched by Tata Group, Tata Neu, turned a year old this month but consumer response has been underwhelming thus far. The app was launched on April 7 last year with an aggressive marketing campaign that rolled out during the IPL. After a good response initially, with around 11 million downloads by July 2022 (as per App Annie), Tata Neu has been unable to build on the early momentum.
As per media reports, the brand has recorded sales worth an estimated $4 billion in FY23, falling 50% short of its original target of $8 billion. Reports also indicate that Tata Neu has contributed less than 10% of gross sales to two of Tata’s biggest digital brands – BigBasket and 1mg.
Recently in an effort to boost consumer confidence, Tata Neu introduced an enhanced version of the app, making it more user friendly with features like personalised navigation and a simplified payment system. According to a Bloomberg report, the group is considering injecting $2 billion of fresh capital into the venture to fix the issues that have hobbled its digital offerings since inception
Tackling consumer hesitation
Experts advise not to write off Tata Neu already.
Analysing what went wrong for the app, Shashank Rawat, AVP, strategy, Digitas India, says it takes time for consumers to warm up to a new e-commerce proposition. “Even though the intention was good to bring all services under a single shop and allow for cross purchase, the consumer’s hesitation to purchase everything from a single outlet wasn’t taken into consideration. For example, consumers may purchase food or groceries from BigBasket but will go to MakeMyTrip to book airline tickets. While it takes consumers time to warm up to a new e-commerce app, once they do, it becomes an almost the default choice for them,” says Rawat.
Experts also note that the app’s relatively slow performance and cluttered interface made it less user friendly. According to Anshuman Misra, senior vice-president, eMarket at LS Digital, consumers are choosing to make transactions on the BigBasket or 1mg app instead of navigating the Tata Neu app. What is heartening, according to Misra, is the enhancements the app recently made to make it more appealing to users. “The app’s new version focuses on providing relevant and personalised recommendations to users, making it easier for them to discover new products and services. These improvements demonstrate Tata Neu’s commitment to improving the user experience and should be a continuous process,” says Misra.
Need for sharp positioning
Launched as a ‘super app’ much like China’s WeChat offering, Tata Neu didn’t have a clear positioning nor did it identify its target consumers, points out Satish Meena, retail and consumer business analyst, and a former senior analyst at Forrester. This is in contrast with other apps that have a clear TG, such as Reliance Retail’s Ajio, which is targeted at premium fashion shoppers.
The other misstep for Tata Neu was its strategy to offer a plethora of products and services all at once. “Most successful apps in India such as Flipkart or Nykaa started out as single category offerings. Flipkart started only with books, while Nykaa started only with beauty. After seeing success in one category and building consumer confidence, they added new categories gradually,” remarks Meena, noting that the customers in India and their demands are too fragmented, which is why a super app offering may not necessarily work here like it did in China. Consumers in India are still comfortable using multiple apps for various needs. “What Tata Neu can probably do is take a more category-specific approach, target
consumers in each segment and then scale up from there. They will need to create differentiation perhaps in terms of delivery time or reward point redemption and build clear communication around that,” he recommends.
One approach that Tata Neu should steer clear of is heavy discounting, says LS Digital’s Misra. “Offering discounts for all the services might not be feasible for a super app like Tata Neu in a price-sensitive market like India. Instead, to boost consumer confidence and encourage consumers to use the app, Tata Neu must overcome the users’ reliance on existing apps. To achieve this, it could consider offering a range of services that are not available on other apps, thereby making its proposition more attractive to consumers,” he explains.
Considering IPL season is underway, Digitas India’s Rawat notes that this is a good time for the app to find a way to underscore its multi-brand identity in a cluttered e-commerce market. On its part, Tata Neu has already rolled out an initiative this IPL season, encouraging consumers to shop on the app and win a host of prizes, including match tickets and vacation packages.
Towards a ‘neu’ strategy
Where Tata Neu misfired
- Unsatisfactory user experience
- Complicated app interface
- Indian market too fragmented for a ‘superapp’
- Most consumers prefer using multiple apps for various needs
- Unclear positioning and communication of app benefits
What Tata Neu should do in its second year
- Continue to enhance user experience
- Have a sharper positioning and clear target consumers
- Take a category-specific approach and scale up
from there - Create differentiation in terms of new services or better service/delivery time
- Stay away from heavy discounting and offers
(With inputs from industry experts)