TATA groups new super app ‘ Tata Neu‘ plans to use Government’s Open Network for Digital Commerce (ONDC) to start its food delivery service and cross-sell its other products including apparel, jewelry, grocery, electronic, flights and many more.
This app will integrate with ONDC and work with Magicpin as a technology service provider.
Food Delivery Service
In accordance with Moneycontrol report citing, only four people are aware of the developments.
An individual stated that Tata Neu’s food delivery service is anticipated to undergo “closed-user group trials in the coming days. However, it may take another month or more before it becomes available to the general public.”
Additionally, another source mentioned that Tata aims to introduce food ordering as a means to create a ‘high-frequency use case,’ encouraging regular engagement with the app by consumers.
Moreover, another individual mentioned that depending on the reception from consumers, the app could potentially be integrated with ONDC for additional categories.
The report also highlights that the ONDC project at Tata Neu is spearheaded by Gaurav Porwal, who holds the position of Senior Vice President at Tata Digital.
This division of the conglomerate also encompasses its acquired consumer internet businesses, such as the online grocer BigBasket and the online pharmacy 1mg.
Tata Neu is positioned to serve as the buyer-side app in ONDC’s business-to-consumer role, according to the report. This approach is anticipated to make its foray into food ordering cost-effective since it won’t require deploying a fleet of delivery riders or persuading restaurants to join the platform.
In the government-backed network, a single player isn’t obliged to handle the entire e-commerce transaction independently.
Various participants within the network can undertake tasks such as taking customer orders, managing logistics, and onboarding merchants.
The Gurgaon-based startup is assisting the company as a technology service provider for the front end. Magicpin has previously aided other companies, including fintech giant Paytm and ride-hailing service Ola, with their ONDC integration efforts.
Furthermore, Magicpin holds the distinction of being the largest seller-side platform on ONDC in regards to restaurant onboarding. The startup has successfully onboarded over 50,000 eateries onto the network. Magicpin is leveraging ONDC in three capacities: as a technology services provider, a seller-side app, and a buyer-side app.
What is ONDC?
ONDC stands for the Open Network for Digital Commerce. It’s an initiative by the Government of India aimed at creating a digital ecosystem that facilitates seamless electronic commerce transactions. The ONDC platform aims to provide a level playing field for all participants in the e-commerce sector by enabling interoperability and reducing entry barriers. It seeks to empower small and medium-sized enterprises (SMEs) and promote fair competition in the digital commerce space.
Tata Neu’s Look 
Currently, the Tata Neu app features a food category tab, but upon selection, it exclusively displays menus from restaurants affiliated with the Tata Group’s hotel company operating under the Taj brand. However, with the integration of ONDC, the app will gain access to tens of thousands of eateries already enlisted across various cities on the network.
As of now, Swiggy and Zomato collectively dominate over 95 percent of the food delivery market, facilitating a combined gross order value of nearly $6 billion in FY23.
Impact on Swiggy and Zomato
With Tata Neu poised to enter the food delivery market, competitive pressures are mounting for industry giants Swiggy and Zomato. Swiggy recently reported a substantial 45% increase in revenue for FY23, reaching Rs 8,265 crore, as it prepares for its IPO. However, amidst this growth, the food and grocery delivery sector is anticipating fresh competition. Despite impressive revenue gains, Swiggy also experienced a 15% expansion in net loss, amounting to Rs 4,179 crore. This underscores the difficulties associated with scaling operations, particularly within its quick-commerce segment.
As Tata Neu gears up to venture into the food delivery sector, it positions itself as a significant competitor against Swiggy and Zomato. The Tata Group’s super app strategy incorporates food ordering as a pivotal feature, with the goal of enhancing platform engagement through frequent usage scenarios. This strategic move is anticipated to escalate competition, posing a challenge to Swiggy and Zomato, which currently command an impressive combined market share of 80%. With both Swiggy and Zomato continuously evolving and Tata Neu joining the competition, the food delivery industry is poised for a substantial transformation.
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