🤔 Tata's Super App: A Super Failure?
Tata launched one of India's first super apps a few months back. But it hasn't proven to be worth the hype so far. Here's why.
Over 150 years ago, one man formed a trading company with just Rs. 21,000.
Today that multi-billion dollar company is selling everything from desh ka namak to dusre desh jati hui flights.
Yes, you guessed it right. We're talking about the Tata Group.
But the company was not satisfied with just existing in all these varied markets.
It wanted to bring all its offerings under one roof.
So, a super app called Tata Neu was born.
But has creating this app been a good idea for the company? Let's find out.
🤨 But First, What is a Super App?
It is an app that allows you to do almost everything in one place.
Want to book a flight? Go to Tata Neu. Want groceries? Tata Neu. Want financial products? Tata Neu.
It is basically like if your mom was an app.
The idea emerged in China first with apps like WeChat and now it has caught India's fancy as well.
Tata became the first company to launch a super app in India, bringing its food, shopping, grocery, medicine and financial services all under one roof.
But Tata is not the only player.
Reliance and Adani also want to launch super apps. However, they are biding their time.
And after what happened with Tata Neu, taking time seems like a sound decision.
Wait, what went wrong with the app?
While Tata has managed to gain 11 million users since it was launched this April, customers haven't been happy with the app.
You see, they had been expecting the app since early 2021 (when Tata first promised it).
But the app was finally launched during IPL this year.
And because of the fanfare around the launch, it saw over 1 million downloads in days and even became the second most downloaded app in India in 2 days.
However, fanfare and hype don't last for long if substance is lacking.
Even though Tata Digital had spent so much time and money developing the app, it was riddled with glitches.
What's more, it could not handle the massive amounts of traffic, which led to the app crashing for many users.
Result? Scathing reviews on the app stores.
Customers were really unhappy with their experience and even though Tata Neu has improved the user experience since then, the app has lost its momentum with many customers vowing not to go back.
And this was clearly visible when the app's first month results came out.
It missed the internal target of $200 million in sales, clocking only $120-$150 million.
And in terms of ranking, it is the 15th most used e-commerce app out there.
Where Amazon and Flipkart are witnessing 2-2.5 million orders a day, Tata Neu is recording only 10,000-15,000 orders despite offering more things.
Now, we know we sound like annoying parents comparing one kids' marks with others, but while marks may or may not matter, dhandhe me numbers definitely matter.
And we know that Tata Neu has just launched, but well, even the company expected more out of itself.
Glitchy experience is one thing. But even the customers now prefer to use other platforms, or even Tata's individual apps like BigBasket or 1mg instead of Tata Neu.
So, sales are low.
Plus, humans are creatures of habit.
Because we are so used to shopping from Amazon and booking flights from MakeMyTrip, when we think about shopping or booking tickets that's where we automatically go, thanks to muscle memory.
This is exactly why previous attempts at super app by the likes of Paytm have not worked out.
Even Amazon, which commands such a huge mindshare with Indian audiences now, has not been able to expand into other sectors.
And while Tata is getting users in the habit of going for its app, by giving them loyalty points and discounts, it will take a considerably long time for the company to occupy enough mindshare that people automatically get on its app.
What's worse, currently these loyalty points are also available if you use individual Tata apps like BigBasket. So, people are further not developing a habit of going to the Tata Neu app.
And things are going to further get complicated.
👀 Problems Facing Tata Neu
For starters, Ambani is also planning on launching a super app that offers over a 100 services very soon. If this does happen, especially before Tata Neu has gained significant mind share, then the app could turn out to be a flop.
Second, the draft e-commerce rules that Indian government has come up with state that e-commerce platforms cannot sell their own goods or that of their related parties. If this becomes law, the whole idea of super apps would be in jeopardy.
Third, these super apps have brought in a lot of concern about data privacy. Right now, Tata Neu has a lot of private customer data, some acquired from old apps like BigBasket and 1mg. And this was done without customers’ permission.
Several customers were shocked to find that their old data, which they had shared with some branch of Tata Group, was present on this new app. This breach of trust has not only upset customers, it could bring a lot of regulatory attention to the app in coming days.
Fourth, with ONDC launching soon (an open e-commerce network launched by the government), Tata Neu's sales could further take a hit.
Fifth, (yes, there's a fifth reason!) Tata is facing a tough competitor in WhatsApp.
Even though WhatsApp is not a super app and has no intentions of becoming one, other companies have different plans for it.
Several companies like Meesho, Upstox, JioMart are now launching their products on WhatsApp.
And unlike with super apps, with WhatsApp you don't even have to download one additional app. Everyone has WhatsApp.
And the worst part? While all this turmoil is going on, Tata Digital (the parent of Tata Neu) has lost its CTO. They are now looking to hire someone externally.
So, is Tata Neu over now?
You see, the Tata name still carries a lot of weight in the country.
And this might be enough to help it make a decent space for itself.
Especially in rural areas where people don't have phones that can support a lot of apps.
What's more, Tata is trying to launch several financial services on its app like buying digital gold and insurance.
This could help drive customers, and once they are there, what's stopping them from buying groceries and that very cute pair of shoes as well?
And Tata knows that only its brands and products are not enough for customers. So, it is also planning on putting products and offerings from other brands on its app soon.
But will this be enough to stage a comeback?
We'll have to wait and watch.
⚡ In a line: Tata launched its super app with a lot of fanfare, but right now the app is all doom and gloom because of glitches and human habits.
💡Quick question: What more do you think Tata can do to win customers?
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