Tata Group plans to enter online food delivery sector with Tata Neu app: Report

Tata Group will collaborate with government's ONDC network and Magicpin to start its food delivery service.

Tata Group, a global Indian conglomerate heading various businesses, is planning to venture into online food delivery sector with its super app, Tata Neu, as reported by Moneycontrol. As informed by four people aware of the development, the report highlights that Tata Neu is teaming up with Open Network for Digital Commerce (ONDC) to start the service.

For now, Tata Neu app has a food category tab that shows users the menus from restaurants of the Tata Group’s hotel that manages Taj brand. Integrating with ONDC will enable the app to gain access to numerous restaurants across various cities that are already part of the network.

The report quotes a person saying that “It is likely to be launched for closed-user group trials in the next few days. But the feature may still be a month or more away from going live for the broader public." A second person mentioned that the idea behind the entry into food ordering is to develop a ‘high-frequency use case’ to bring consumers back to the app regularly.

“This will give a chance to Tata Neu to cross-sell its other products on the app- across categories like apparel, jewellery, grocery, electronics, flights and more,” added the third person. Meanwhile, another source elaborated that the app might eventually be integrated with ONDC for other categories also, depending on how consumers receive it.

Currently, Swiggy and Zomato account for more than 95% of the food delivery market and serviced a cumulative gross order value of around $6 billion in FY23.

According to the report, Tata Neu will play the business-to-consumer role of a buyer-side app in ONDC. This is anticipated to enhance the cost-effectiveness of its food-ordering entry, as there will be no need to deploy a fleet of delivery riders or convince restaurants to list on the app.

Within the government-backed network, a single entity is not required to execute the entire e-commerce transaction independently. Various participants can manage customer orders, oversee logistics, and onboard merchants.

Gaurav Porwal, a senior vice president at Tata Digital, will lead the ONDC project at Tata Neu. The report additionally mentioned that Tata Neu is in close collaboration with Magicpin, a Gurgaon-based startup, supported by Zomato, for integrating with ONDC. It will assist the company as a technology service provider for the front end.