Tata’s Potential Entry Into Food Delivery: A New Competitor for Swiggy and Zomato?

Reports indicate that the Tata Group is gearing up to venture into the online food ordering space- Tata Neu, potentially posing competition for industry giants like Swiggy and Zomato. Here’s a breakdown of the key points:

Tata Neu’s Ambitious Move

According to sources cited in a report by MoneyControl, Tata’s ‘super app’, Tata Neu, is eyeing the food delivery sector. Leveraging the government’s Open Network for Digital Commerce (ONDC), Tata Neu aims to launch its food delivery service.

ONDC Integration:

The Tata Neu app already features a food category tab, displaying menus from Taj brand restaurants under the Tata Group.

Integration with ONDC could expand its reach to numerous eateries already on the network, potentially broadening its offerings.

Market Dominance of Swiggy and Zomato:

Currently, Swiggy and Zomato dominate over 95% of the food delivery market, with a combined gross order value of nearly $6 billion in FY23.

Expected Launch and Strategy:

Tata Neu’s food delivery service is reportedly set for closed-user group trials soon. With a broader public rollout anticipated in the coming month.

Tata aims to establish a ‘high-frequency use case’ to drive regular app engagement, with plans to cross-sell other products within the app across various categories.

ONDC Project Leadership:

Gaurav Porwal, a senior vice president at Tata Digital, is spearheading the ONDC project at Tata Neu. This division, housing acquisitions like BigBasket and 1mg, aims to position Tata Neu as a buyer-side app within ONDC, potentially reducing entry costs.

Collaboration with Magicpin:

Tata Neu is collaborating with Magicpin, a technology service provider, for its ONDC integration. Magicpin, known for its expertise in onboarding restaurants, has facilitated similar integrations for companies like Paytm and Ola.

Magicpin’s Role in ONDC:

Magicpin’s extensive experience in ONDC includes facilitating technology services, serving as a seller-side app, and bringing over 50,000 eateries onto the network, making it a crucial partner for Tata Neu’s entry into the food delivery space.

Tata Group’s potential foray into food delivery through Tata Neu marks a significant development in the online food ordering sector. With strategic leveraging of ONDC and collaborations with partners like Magicpin, Tata aims to carve a niche in a market dominated by established players like Swiggy and Zomato.